Digital Pound

Harriett Baldwin Excerpts

Tuesday 7th February 2023 Commons Chamber

[Andrew Griffith]

It is always a pleasure to hear from the hon. Lady, in what I think was a welcome from His Majesty’s Opposition for the joint consultation between the Treasury and the Bank of England. She rightly raised issues that I assure her are addressed in the consultation, about which we would like to hear. They include how to ensure privacy, which will be embedded in the design. It is important that we come forward with, potentially, a digital pound precisely to avoid this space being colonised solely by, for example, private large tech companies.

I can assure the hon. Lady that this issue will not in any way distract from our important work on financial inclusion. Cash will indeed continue, and no part of the consultation talks about in any way replacing it. Rather, this is about ensuring access to that currency, so that potentially it will no longer be gated behind existing financial institutions; it could be something that new participants make available to citizens without some of the constraints that are sometimes put on the financial services system. The consultation also addresses the risk, which the hon. Lady rightly raised, should everybody withdraw their money all at once to invest in this digital currency.

However, the hon. Lady’s comments were a speech of two halves, and the second half was as wrong as it was unnecessary. This Government have never promoted a crypto wild west. The current Financial Services and Markets Bill contains more measures to protect consumers. The risks that consumers face have always been extremely clear, but when it came to financial promotions, one of the biggest challenges we faced was the Mayor of London and Transport for London, which gained a reputation for accepting particular adverts from the crypto industry.

[Harriett Baldwin (West Worcestershire) (Con)]

The Treasury Committee has opened an inquiry into crypto, and this morning we had a session at which the chief executives of the major high street banks appeared before us. The real question we wanted to ask them was why they have been paying our constituents so little on their savings since the Bank of England started to increase rates. Is not the logical conclusion of the consultation process that my hon. Friend has opened today that each of us should be able to hold a digital currency account at the Bank of England, and to earn the Bank rate on our holdings and disintermediate the entire banking sector?

[Andrew Griffith]

I thank my hon. Friend for her, as ever, wise points, as well as her wise chairmanship of the Treasury Committee. It is absolutely imperative that savers get the interest rates that they are entitled to. I commend my colleagues in National Savings and Investments, who have significantly increased the rates offered to savers. Of course, she also raises one potential opportunity, in that, although a digital pound would sit alongside our existing financial services infrastructure, it potentially offers consumers and citizens a different choice, which could involve the ability to hold currency through intermediaries other than the current banks.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 7th February 2023 Commons Chamber

[Mr Speaker]

I call the Chair of the Select Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

The Treasury Committee recently published a report titled “Fuel Duty: Fiscal forecast fiction”, because we do not think the Chancellor will really be able to raise fuel duty by 12p, as is currently baked into the Office for Budget Responsibility numbers. Will the Chancellor be able to respond to our report before the Budget?

Charter for Budget Responsibility

Harriett Baldwin Excerpts

Monday 6th February 2023 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

Thank you very much, Mr Deputy Speaker, and may I associate myself with those passionately expressed words from the Chair?

I did think there might be a few more people here this evening to talk about the charter for Budget responsibility, after we have had so much debate across the country about the Office for Budget Responsibility and its forecasts over the last year or so. This was the year when the Office for Budget Responsibility made it into the headlines on numerous occasions, so I thought there might have been a bit more of a heated debate. I listened to the words of the right hon. Member for Wolverhampton South East (Mr McFadden), and I am not sure I understand at the end of his speech whether the Opposition are in favour of tonight’s motion and of the charter. I am not sure whether they are in favour of Budget responsibility. In fact, I did not hear any suggestions at all for solutions to the criticisms that he raised.

This evening, I reiterate, for those who were not here in early 2010, the rationale for the setting up of the Office for Budget Responsibility. It was because, in the Treasury of 2008, 2009 and early 2010, it was far too easy for the Government simply to make their own forecasts and to mark their own homework. I think there is merit in having someone external to the Treasury and oblivious to ministerial pressure come up with a set of forecasts. We all acknowledge that none will be perfect, or have perfect foresight about the future, but that externality means there is a way of marking the Treasury work and the Treasury projections. A Chancellor can certainly make an argument about why they may take issue with some of the elements going into the forecast, and there is often a more dynamic quality to tax revenues than is perhaps put into some of the external forecasts referenced this evening. A Chancellor can certainly have a debate about the numbers, but we do need to remind ourselves of the importance of this process and its external nature.

The other point I want to raise is about the fiction, which the Treasury Committee highlighted in one of our recent reports, that clouds the Office for Budget Responsibility forecasts for fuel duty. Again, this practice goes back many Chancellors and many Governments, and it is about putting into the projections for future tax revenue a ratchet up every year of fuel duty, yet for the last 12 or 13 years, every Chancellor coming to the Dispatch Box has decided not to implement it. It would be astonishing—I note that the Chief Secretary gave me a little cheeky smile—to see what is currently projected for fuel duty in the Office for Budget Responsibility forecast, which is for an extra 12p to go on to fuel after the Budget if the Chancellor does nothing. I think we can all agree that that is fiction. I cannot see the Chancellor coming to the Dispatch Box on 15 March and increasing fuel duty by 12p—I would be astonished—because the temporary one-year reduction of 5p will expire and there is the cumulative impact of the ratchet over the years.

I just wanted to highlight that there is some element of a work of fiction in the Office for Budget Responsibility forecast. It would be healthier for all concerned if a more realistic approach could be taken to the forecast for fuel duty not just in the short term, but in the medium term, because I think we all recognise that there will have to be a change, as more and more people are buying electric cars, in how we tax transport and drivers. I also wanted to publicise how our Committee has come together on a cross-party basis to make that point.

[Mr Deputy Speaker]

I call the SNP spokesperson.

IMF Economic Outlook

Harriett Baldwin Excerpts

Tuesday 31st January 2023 Commons Chamber

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the Minister take this opportunity to reflect on last year when, despite the headwinds of the coronavirus, the invasion of Ukraine, huge hikes in energy costs, rising interest rates and high inflation in this country, UK businesses managed to generate more than 4.1% of economic growth—twice that of the United States, 25% higher than China, and higher than the eurozone?

[James Cartlidge]

The Chair of the Select Committee is spot on. Instead of talking down our economy, she makes the key point that, despite all those challenges, we had strong growth last year because of British enterprise. That is why, on Friday, the Chancellor, himself a former entrepreneur—there are not many of those on the Opposition Benches—said that we will back advanced manufacturing in the high-growth sectors to ensure that we continue to live with that level of growth in the future.

Non-domicile Tax Status

Harriett Baldwin Excerpts

Tuesday 31st January 2023 Commons Chamber

[James Murray]

I thank my hon. Friend for drawing attention to the impact that tax avoidance has on the public purse and on people across this country and to the fact that the Prime Minister probably understands some of these issues very well indeed.

As my hon. Friend set out, people are feeling the impact on this country’s economic growth as we lag so far behind other countries around the world. People are feeling the impact of so many parts of our public services breaking at the seams, and people are feeling the impact as the big challenges of the future get kicked ever further into the long grass.

We need a Government with a plan to grow the economy, with the drive to get ahead of the challenges of the future and with the determination to reform and strengthen our public services. Nowhere is that clearer than with the NHS, as more than 7 million people wait months and even years for treatment, unable to work or to live their lives to the full. We know that, to make the NHS fit for the future and able to support a healthy society and economy, it desperately needs reform and sustainable funding from a growing economy.

[Harriett Baldwin (West Worcestershire) (Con)]

The hon. Gentleman is making a typical, anti-aspirational socialist rant straight out of the book called “Politics of Envy”, but he is not actually speaking to the motion on the Order Paper. Why has he put “28 February” in that motion when he could just wait for the Budget on 15 March?

[James Murray]

It would only be a Conservative MP who could criticise an Opposition shadow Minister for suggesting that people should pay their fair share of tax.

I was speaking about the NHS, so let us look at the Government record on the NHS and see what can be done. We know that, after 1997, Labour’s reforms and funding from a growing economy meant that our country had an NHS of which we were proud. If we win the next general election, as my hon. Friend the Member for Ilford North (Wes Streeting) the shadow Health Secretary has set out, one of the first steps we will take to get the NHS back on track is to use some of the money raised by scrapping non-dom status to implement a workforce plan that addresses the root cause of the crisis the NHS is in. Under our plan, we would double the number of medical school places to 15,000 a year. We would double the number of district nurses qualifying each year. We would train 5,000 new health visitors a year. We would create 10,000 more nursing and midwifery clinical placements each year.

[Harriett Baldwin]

On a point of order, Mr Deputy Speaker. Is it in order for the Opposition spokesman to be talking in such general terms about a wide range of things, without actually addressing the motion on the Order Paper?

[Mr Deputy Speaker (Mr Nigel Evans)]

If I had heard anything out of order, I would have called the shadow Minister to order. I am quite content with what he is saying at this moment in time.

Wagner Group: Sanctions Regime

Harriett Baldwin Excerpts

Wednesday 25th January 2023 Commons Chamber

[James Cartlidge]

Well, I am talking about Ukraine, because I think that that is the key issue here. It shows we were preparing for what happened, although, obviously, the situation was unprecedented when Ukraine was invaded. We are clear about the fact that our officials and Departments worked as fast as possible to bring forward an ambitious range of sanctions—which of course happened in March last year when the Prime Minister was Chancellor—and they are having a significant impact on Russia and its economy.

[Harriett Baldwin (West Worcestershire) (Con)]

Although we cannot discuss a specific case, “Wagner Group” is written on the Annunciator and I wanted to add a further question about the regime that we are operating within the Treasury. I urge the Minister to go further than he committed to doing in response to my hon. Friend the Member for Rutland and Melton (Alicia Kearns), the Chair of the Foreign Affairs Committee, because the Wagner Group is clearly such an evil organisation and what it is doing in Ukraine and across north Africa is so evil. Will the Minister today, from the Dispatch Box, ask OFSI officials to have a red flag system whereby anything related to the Wagner Group is flagged up individually to the Minister responsible?

Non-domestic Energy Support

Harriett Baldwin Excerpts

Monday 9th January 2023 Commons Chamber

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

I welcome the Minister’s announcement. He rightly points out that President Putin has, by illegally invading Ukraine, effectively weaponised the cost of energy against western economies, and he is right to highlight that we have been able to withstand that attack with £18 billion of support over this six-month period.

We now have a gas price close to where it stood before the invasion of Ukraine, and businesses across the country have realised the big risk they face in terms of their energy costs. Will the Minister encourage them not to pass on the cost of higher energy through inflation to their customers, and instead call for the wholesale price of energy to feed through more swiftly to the retail price our businesses pay?

[James Cartlidge]

I think this is the first time I have taken a question from my hon. Friend since her appointment to the chairmanship of the Treasury Committee and I congratulate her belatedly on her success. She makes the good point that wholesale prices have fallen significantly. The gas price is back to where it was before the invasion. Of course, we should be clear that before the invasion it was still elevated in relative terms historically, not least because there was an increase in energy prices following the reopening of the economy after the pandemic. Of course, we do not want prices to be passed on to customers in terms of inflation—that is the last thing we want to see—but I should stress that one reason why we are giving extra support to energy and trade-intensive sectors is that, because they tend to trade internationally, they are particularly exposed to those price pressures and find it harder than other companies that are energy intensive but not trade exposed to pass on those high prices.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 20th December 2022 Commons Chamber

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

I wish you, Mr Speaker, your team and the Treasury team a merry Christmas. Has the Chancellor had a chance to read the Treasury Committee’s report, published last week, about the welcome that we give to the cost of living support that he has announced for next winter? Did he also note our points about the potential cliff edges in that £900 support, and the recommendations we made to spread those payments more evenly over the course of next winter?

[Jeremy Hunt]

I wish my hon. Friend and all members of the Treasury Committee a merry Christmas. I have read a summary of their report, but I have saved the entire document for my Christmas reading, and I am immensely looking forward to that. The most important thing is that we are offering extra support for people who are vulnerable—support that amounts to £13 billion next year—and that comes before the support with people’s energy bills and a lot of other measures. My hon. Friend makes a very important point about cliff edges, which we will reflect on carefully.

Financial Services and Markets Bill

Harriett Baldwin Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Andrew Griffith]

I thank the hon. Member for his point. I had that conversation with the FCA precisely to try to achieve that purpose. If there are other ways to do that that will help him, I am happy to do so.

I was talking about the financial advice boundary, which is a real concern and speaks as much to financial inclusion as to the work of the advisory sector. My hon. Friend the Member for West Worcestershire, when she was in this role, undertook some important work on the comprehensive financial advice market review, which led to some important improvements in the market at that time. Unlike me, however, she was not blessed with the Brexit freedoms of being able to influence our own rulebook.

I completely agree with my hon. Friend that it cannot be right that only the wealthiest can access financial advice. The situation today is a good example of the unintended consequence of well-meaning regulation that we should be alive to. I thank the Investing and Saving Alliance and others for their efforts to promote reform in this area, and it is something that I will take forward and see what I can do to progress. We will revisit the issue and work closely with the FCA and the industry. I assure her that there is nothing in the Bill that would impede any of the things that she seeks to do.

[Harriett Baldwin (West Worcestershire) (Con)]

The Minister is making some encouraging sounds about new clause 11. In addition to the commitments that he has just made, will he instruct officials to look at the matter with the greatest urgency?

[Andrew Griffith]

I am happy to confirm that we will pursue it with great urgency, as the Government should be doing with everything in this important domain. Although the Government will not be supporting new clause 11 today, it goes some way to address the issue, so I will look at it as a basis for potentially moving forward. The Bill enables us to do that, so we do not have to do it today. I commend the other amendments tabled in relation to preventing consumer harm.

--- Later in debate ---

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. My plan is this: because there is a lot of pressure on time, I intend to prioritise those hon. Members whose amendments have been selected. It is really important for everybody to stick to six minutes. I am sure that the Chair of the Treasury Committee will lead by example so that I do not have to impose a time limit.

[Harriett Baldwin]

Thank you, Madam Deputy Speaker. I will try not to gabble.

I rise to speak to new clause 11, which stands in my name and in the name of many right hon. and hon. Members; I am pleased to hear from the hon. Member for Hampstead and Kilburn (Tulip Siddiq) that the Opposition support it too. I should clarify that I am speaking in this debate as an individual Back Bencher, rather than as Chair of the Treasury Committee.

As the Economic Secretary has highlighted, one of the many benefits of being able to bring financial regulation back into the UK is that we can create rules that will help to unleash growth and investment here. My new clause highlights the opportunity that reviewing MiFID presents for us to look again at the boundary between regulated advice and guidance.

I am proposing personalised guidance on financial matters. As we all know, the implementation of the retail distribution review about a decade ago has meant that financial advice is now a very high-quality service that is very expensive. The vast majority of our constituents do not pay and are not willing to pay for it. Something like 8% of people—I confess that I am one of them—are lucky enough to afford a financial adviser, but 92% of our constituents do not have that luxury.

When I was Economic Secretary in 2015, I launched the financial advice market review, which came up with 28 recommendations to help our constituents. Many wise steps were taken at the time, including enabling people to use £500 from their pension savings to pay for financial advice when using their pension freedoms. Despite those measures, however, there is still an enormous gap for our constituents. For example, about 10 million people in this country are fortunate enough to have more than £10,000 in savings, but 58% of that money is just sitting there in cash, and we all know how inflation is eroding the value of those investments.

My new clause 11 approaches the problem from the other direction. I was pleased to hear the Economic Secretary commit at the Dispatch Box today to using the new flexibilities and seeing whether he can do something like a personalised guidance review with great urgency. That will help our constituents in the following generic examples.

A customer may be saving for a deposit for their first home, but doing so with a cash individual savings account. They could get a nudge from their financial institution to consider putting the money into a lifetime ISA so that they get the Government rebate.

A customer may be sitting on a large cash balance for many months, well above their normal three-month outgoings. They could get an alert to warn them about the detriment to the value of cash as a result of inflation and to narrow down some suggestions for getting a better deal for their cash. With many of our constituents, particularly our elderly constituents, there is a lot of inertia because they are not receiving very much on their deposits. This approach would give them a nudge that there are better rates out there that they could be receiving.

A customer might have invested in a fund on a platform many years ago and have done nothing with it since. If the fund is poorly performing, they could get a nudge with some personalised guidance. A customer who opened a junior ISA, which by definition would have a very long time horizon, might get a nudge that cash was not the ideal investment, and that in his or her circumstances an investment with a longer time horizon might provide better protection from inflation.

[Sir Stephen Timms (East Ham) (Lab)]

I agree with the case that the hon. Lady is making—indeed, I have signed her new clause. I wonder whether she has seen the report produced by the Work and Pensions Committee in September, which expressed concern about stepping across the advice-guidance boundary and constraining the ability of pension schemes and employers to give people helpful, sensible support as they make their choices about what to do with their pension savings. Would her new clause help in that regard?

[Harriett Baldwin]

I thank the right hon. Gentleman for signing the new clause, and for his Committee’s excellent report. He is right to suggest that the workplace is one of the best places for people to be given these nudges, and for employers to explore that boundary between advice and guidance.

Our constituents are craving advice of this kind, especially during this cost of living crisis. They want more guidance from their financial institutions. They are turning to online sources of often unregulated information to help them navigate their finances. They are finding the process complex and confusing. They are choosing investments that are often very high risk and not suited to them at all, such as meme stocks, crypto or spread betting.

It should not need to be this way, because the technology exists for financial services and fintech firms to guide people towards making better financial choices and following good mainstream investment opportunities, but MiFID-originated legislation is getting in the way. My new clause would enable the Treasury to introduce, with great urgency, the necessary legislation to allow regulated financial services firms to offer UK households personalised guidance. It is a great opportunity to unlock investment in our country, it will help our constituents to earn more, and it will allow innovation. Financial technology will help our constituents to level up their own economic futures. I am therefore delighted that the Economic Secretary has agreed today to look into this as a matter of urgency.

[Crispin Blunt (Reigate) (Con)]

I fully support the proposed measure. Let me say something that is specifically for the ears of my hon. Friend and those on the Treasury Bench. Just is a company in Reigate, formed from a company called Just Retirement and Partnership, which provided products that challenged the existing ones, involving, for instance, equity release and life insurance for smokers. As a provider of challenger products, it was anxious for people to have access to independent advice, rather than just being directed only to its own products.

[Harriett Baldwin]

Let me end by saying that personalised guidance would offer the Economic Secretary the chance to make his mark and help all our constituents to benefit from better financial information. I am very pleased that he has committed himself today to look into it with the utmost urgency.

[John McDonnell]

I entirely agree with what the hon. Member for West Worcestershire (Harriett Baldwin) has said, and I apologise for not signing her new clause; I wish I had.

I will be very brief, Madam Deputy Speaker. This is an appeal more than anything else. I am concerned about the way in which the Bill will undermine the constraints on commodity market speculation that were introduced during the financial crash of 2007-08. I was in the House before and during that crash. People remember that it was a banking crash based on the sub-prime housing market, but what is less discussed is what then happened with regard to commodity speculation. The funding shifted from housing to commodity and, in particular, food speculation, and we saw massive food price increases as a result. The price of wheat rose by 168% during that period, and the price of rice doubled. This was largely not to do with supply, which at that time was relatively stable; it was to do with commodity speculation.

We supported, on a cross-party basis, reforms to regulate the market. We gave the FCA the task of setting position limits. We also opened up the whole commodity market to greater transparency. I accept that there has been a watering-down of those regulations since then, particularly by the Trump Administration but also by signals from Ministers in the UK Government. That weakened regulation and weakened culture have opened the door to what is happening now, which is billions shifting into food commodity speculation. This is fuelling the cost of living crisis. It is not just about energy; it is now also about food prices, some of which have gone up by as much as 16%.

Of course, we cannot ignore Ukraine, climate change or the breakdown of supply chains with regard to covid, but another severe factor that is influencing this is commodity market volatility. Speculation is creating price rises, and this is making fortunes for individual speculators, but I have to say that the banks themselves are also making a killing at the moment.

I say this not as some kind of Cassandra—I was the first to raise Northern Rock in this Chamber, although others have claimed that too—but economists on both sides of the Atlantic are saying that this could be a systemic crisis unless we get to grips with it and accept that we need to strengthen, not weaken, regulation. One of the reasons I am concerned is that the Lighthouse report suggests that a lot of commodity investment is taking place by pension funds themselves. That could have an effect not only on prices but on the stability of people’s pensions.

The Government will say, “Don’t worry, we’re not scrapping the limits. We’re handing over control to the trading floors.” That is madness in itself. The trading floors have an interest in attracting traders, and the lesson of history is that they cannot be relied upon to regulate themselves. They do not worry about the interests of the whole economy. That is the job of the Government and Parliament. Also, I see no rationale for scrapping the transparency element of MiFID II. I would love to know what possible justification there could be for undermining access to more transparent information, because the markets are already opaque and this would make them worse.

A final comment from me—you will note that I am well under time, Madam Deputy Speaker—is one that I have made before. The best writer on the banking crash of 1929-30 was J. K. Galbraith, who said that, yes, we would put institutions in place to protect against a repeat of that kind of crash but one of the most significant things would be memory; people would remember what had happened. Unfortunately, I fear that we are now replicating the circumstances of 2007-08 and undermining the very regulations that we as a House put in place to protect against the food speculation, the price increases and, I have to say, the starvation that occurred as a result of that crisis. I never want to see that again. I think this is a mistake by the Government, and I hope that they will think again. I also think we might be able to bring forward some amendments in the other House that will help the Government to move along a more constructive path than the one they are on at the moment.

Autumn Statement Resolutions

Harriett Baldwin Excerpts

Monday 21st November 2022 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

May I start by apologising to the House and to the Chief Secretary for not being here for the beginning of the debate, having failed to end our Committee session on time? I caught most of what was being said, and I very much welcome the fact that the autumn statement has been accompanied by an Office for Budget Responsibility forecast, which is something the Committee has been asking for for many months. We have the OBR appearing before our Committee tomorrow.

I recognise that any forecast in and of itself will be inaccurate—it is, at best, a best guess of what the future will hold—but it will allow us to test the assumptions. These forecasts were brought in by the Conservative-led coalition in 2010 for a very good reason: to prevent the Treasury from exclusively marking its own homework. They have become one of the guardrails of fiscal responsibility. In the last few months we have learnt that that really does matter to the markets. I very much welcome the existence of the forecasts.

I also very much welcome the fact that the measures in the autumn statement appear to go completely with the grain of what is obviously the biggest economic challenge our country faces: the hideous inflation that we are suffering. We know that about 80% of that inflation comes directly from Putin’s evil invasion of Ukraine. The Committee recognises that inflationary pressures predated that invasion, and we have taken quite a lot of evidence over the last couple of years about those incipient inflationary pressures as we came out of the pandemic. At that time, the Bank of England had the monetary foot to the floor and the Government had the fiscal foot to the floor—one could not come up with a more successful recipe for inflation. Sure enough, it has become more ingrained in our economy.

Everyone in this House can see that inflation is the most insidious tax, particularly on the poorest. It is the most terrible scourge on our economy. I very much welcome the fact that fiscal policy will be brought in line with what the Bank of England is trying to do through monetary policy, to bring inflation back to the target level.

The third thing I want to highlight, because it is a matter of deep concern to everyone, is a line in the Budget that is up dramatically—perhaps not in cash terms, but because we have more debt. That is the debt interest bill, which is over £100 billion. Since 2000 the amount of this country’s debt that is linked to inflation rates has gone from 6% index-linked to the current 22% index-linked. That means the Government are short the rate of inflation, effectively, and they are now paying the price in that line item. My question for the Minister is this: was an explicit decision taken in the Treasury in those years to issue more index-linked debt. If so, who made it and was it announced to the House? It is really coming home to bite in the fiscal accounts, so it would be nice to know what the thinking was at the time—or was it something that we sleepwalked into as a nation?

The final point of my, I hope, suitably brief remarks is to reiterate the comments of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) about cliff edges. I fully accept that during the pandemic the Treasury was making decisions at speed and wanted to get money out to people as quickly as possible. Similarly, this year, with the energy crisis, the decision was taken to get money out as quickly and easily as possible to the lowest income households through the two payments of £325, which have been important in helping people with the cost of living this winter.

I am more concerned now—arguably, the Chancellor has not been in post that long, but Treasury officials have had the benefit of more time to think about these things—that the £900 payment next year will also be made with a big cliff edge. What kind of behavioural signals will that send through the benefits system? We have spent the better part of the last 12 years introducing universal credit precisely so that it has a linear impact, yet next year we will entrench a different way of paying the lowest income households. Hon. Members should not get me wrong; I support giving the lowest income households help, but it worries me that the £900 payment will go to people on means-tested benefit, but if someone is £1 above what is needed to get that means-tested benefit, they will not get it.

I wonder whether the Treasury could look at something that goes more with the grain of the type of work incentives that we are trying to put in through universal credit. We have heard about the withdrawal of labour in the labour market. Perhaps this aspect could be considered in the Stride review, so that we can ensure that we are not making the problem worse through the decisions in the autumn statement.