Financial Services Reform
John Glen Excerpts(2 weeks, 3 days ago)
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John Glen (Salisbury) (Con)
I warmly welcome the Leeds reforms; they build on many of the things that were done under the previous Administration and I acknowledge the consumer-facing changes on mortgages and ISAs and the aspiration to get more people investing. Those are positive things.
I will just say two things. First, on the listing review, we did one about four years ago and it is all just about implemented. I urge the Minister to look at culture and fiscal issues as much as at regulatory issues. Secondly, on the PRA and the scale of ambition on that side of the regulatory framework, in conversations with senior leaders at Mansion House last night, it was felt that the FCA’s level of ambition is high but that there must be wariness about a constant shifting of the goalposts and a lack of real change, particularly on the internal rating base and how banks can get their regulatory capital treated differently more quickly. It is taking too long and that needs to change urgently.
Emma Reynolds
I reassure the right hon. Gentleman that we have not announced a listing review; we have announced a listings taskforce—[Interruption.] It is different, if hon. Members will let me explain. It is a joint piece of work between the Office for Investment, His Majesty’s Treasury and other Government Departments to make sure that we attract the best and brightest companies to list here in the UK. He is correct, though: many reforms were undertaken by his Government on listings, taking forward the Jonathan Hill and Mark Austin reviews, and we welcomed and supported those.
The right hon. Gentleman will have seen that yesterday the FCA published its final prospectus rules. Of course, we have to get the regulatory side of the equation right, but he is correct that there are other factors at play, which we are looking at. On the FCA and the PRA, all I will say to reassure him is that, as he knows, I hold the relationship with both those regulators as the Economic Secretary. We will continue to push them to be ambitious in supporting our growth agenda.
Taxes
John Glen Excerpts(2 weeks, 4 days ago)
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Darren Jones
That is a slightly odd question, but I can definitely confirm that any tax changes, one way or the other, will be announced by the Chancellor at the Dispatch Box in the normal way in the autumn.
As I say, Conservative Members are welcome to come forward with suggestions about how they might pay for the decisions that this Government have taken. Maybe they disagree with our fiscal rules, which are our assurance to the financial markets that we will live within our means and reduce Government debt.
John Glen (Salisbury) (Con)
The right hon. Gentleman is being generous in giving way. One area the Opposition would be looking at is a coherent reform of the welfare system so that, by changing the pathway to entitlement to benefits, we get that whole budget under control, which would make a meaningful difference to the fiscal position that the Government are in.
Darren Jones
As the right hon. Gentleman knows, my colleagues in the Department for Work and Pensions, with the Stephen Timms review and other work, are taking those measures forward.
John Glen (Salisbury) (Con)
A few months ago, I met a former civil servant. He told me that when he was working in government in the run-up to the ’97 election, Ed Balls would come into the Department and say, “Look, this is what our manifesto says, but here is the three-page memo on what we are actually going to do in government.” In fairness to that Government, they achieved quite a lot. In their first two years, of course, they stuck rigidly to the Conservative spending plans, and Tony Blair’s economic adviser, Derek Scott, said that they had a golden economic legacy.
I have listened very carefully this afternoon to the speeches made by Government Members. Of course, I can acknowledge where we were, in terms of the economy, and the fact that the country wanted change; I recognise that. Government Members, however, have failed completely to acknowledge the scale of the once-in-100-years covid experience, what that did to our public finances, and the challenges it gave us in the Treasury—the tough decisions we had to make, and the inevitable scarring to the economy.
John Glen
I shall just finish my point and then I will give way to the hon. Gentleman.
The typical refrain is then to say, “What about Liz Truss?” I was not a member of Liz Truss’s Government, but I am sure that my colleagues who were did the very best that they could. She was in office for seven weeks. I acknowledge that, politically, it was catastrophic for my party, and there are lots of lessons on which we will have time to reflect, but the failure to acknowledge properly the dominant reason for losing that last election, which was related to the scarring of what happened with covid and the fundamental challenges, does not do credit to this House. I shall give way to the hon. Gentleman if he still wants to intervene, presumably on Liz Truss.
Dr Sandher
I thank the right hon. Member for giving way. We sit on the Treasury Committee together and I find him to be an incredibly kind and brilliant Member of Parliament. He has been very kind to me personally as well.
On the experience of coming out of covid, our contention is not just about Liz Truss, but about the fact that we had the highest inflation and the highest energy bills. Natural gas, which we depend on, sets the price 98% of the time. It is also 50% to 75% more expensive than wind and solar, so the lack of investment in clean energy left us with higher inflation and made us poorer.
John Glen
No, I will a bit of progress now. I will give way to the hon. Gentleman later, even though he did not give way to me earlier.
The Chancellor came to the Treasury Committee in November. She said, “We have now set the envelope for spending for this Parliament, and we will not be coming back for more tax increases or, indeed, more borrowing. We now need to live within the means that we have set ourselves in the Budget and in the allocations of those spending totals.” What has happened in a year? Of course, I recognise that events occur, and I have referred to those under the previous Government. They do present challenges, but the Labour party’s fundamental problem is understanding the effect of high burdens of tax on wealth creators and their motivation to employ people and to invest in the productive capacity of the economy—more jobs and more tax revenues from lower rates. This Government are saying that we can do a little bit more on national insurance; that we can just put a few more burdens of regulation; that the long-term capital investment of £190 billion will transform our economy.
However, what I hear from businesses in Salisbury—small or large—is that the motivation to grow a business, to employ more people, and to say that they are determined to do so because there are some rewards from that is rapidly diminishing. What we hear is speculation about which additional taxes will be imposed after the next three months. Today, Government Members have suggested equalisation of capital gains tax, a flat rate of pension relief, a wealth tax, or higher bands of council tax—although they may have been ruled out. The overall effect on top of what we have already had is for businesses to say, “I’m not going to do this anymore.” We have now had two consecutive months of negative growth. That may well continue, which is bad for everyone. It is bad for the capacity that we have as a country to invest in the transformation that we all seek to deliver on—some things we will agree on—and it is not sustainable if the Government do not recognise that businesses will not grow and expand if that tax level rises beyond a certain amount.
Tom Hayes
I thank the right hon. Member for giving way, particularly as I apparently did not give way to him. I did not realise that it was he who was trying to intervene on me, otherwise I would have given way.
I recognise what the right hon. Member is saying about covid. I think that as a country we have not yet come to the terms with the true impact of covid and we will not do so for a long time, because it still feels very near to us. As a new Member of this House, I take the point that we ought to understand the true impacts. The concern for me and perhaps for other colleagues is that by trying to focus only on covid, and not on the economic and fiscal impact of Liz Truss—I know that he was talking about the political impact—we will never learn the lessons of the Liz Truss moment, and we just do not want to lose sight of the lessons that can be learned.
John Glen
Absolutely. [Interruption.] I am told that I ought not to take any more interventions, but I will say that Liz Truss’s insight about the imperative for growth was right; we do need to look for growth. What she did not do was examine the conditions to do that in a way that the market could understand, and it had catastrophic effects.
We now have a Labour Government, and we now have working people being massively affected by tax changes. We have Andrew Bailey, Governor of the Bank of England, saying that as a reaction to the national insurance changes, businesses have made changes to employment—that means firing people—and we have Paul Johnson downgrading growth prospects, alongside virtually every other independent analyst.
The winter fuel payments were an absolute disgrace. The changes to agricultural property relief and business property relief were put on my desk at every fiscal event, but one just has to say no, because they are the wrong thing to do. The political capital that has been lost by the Government and the damage to their reputation for their stewardship of the economy is catastrophic. I say to those on the Labour Benches that we are facing some really tough challenges as we approach the next Budget. The choices that this Government need to make on taxes will define their future. What happened last week was the worst possible situation.
Several times today we have been asked, “What would you do?” What we would have done and what we would do now is take a root-and-branch look at the welfare system to see what the Government should do. We would focus on the most vulnerable and look after them well. We would recognise that one of the legacies of covid is that the pathway into benefits has gone fundamentally wrong and the country cannot afford it. Unless we grip that major driver of costs for this country, we shall see taxes rise and rise to meet those iron-clad fiscal rules, and we will be in a spiral of decline.
Government Performance against Fiscal Rules
John Glen Excerpts(3 weeks, 5 days ago)
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John Glen (Salisbury) (Con)
The Chief Secretary will be aware from his previous role as Chair of the Business and Trade Committee that one of the things that those who create wealth and invest in our economy need is certainty. Before the next Budget, will he ensure that he consults with business leaders and that a proper impact assessment of whichever taxes he will increase is done so we can minimise the damage being done to the productive capacity of the UK economy?
Darren Jones
The Treasury engages with business leaders and investors all the time, and the one thing they tell me is that they are grateful this Government have brought back long-term, multi-year budgets, that we have the fiscal rules in place, and that we are reforming things like the planning system to make it easier to do business in this country. As a consequence, business confidence is increasing under this Government, having dropped enormously under the right hon. Member’s Government.
Oral Answers to Questions
John Glen Excerpts(1 month ago)
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Emma Reynolds
We are really excited about targeted support, because it means that firms will be able to make suggestions to consumers with similarities, so that they have the confidence to invest in the long term and can get better support—not advice—on their pensions.
John Glen (Salisbury) (Con)
Further to that answer, will the Minister confirm that one of the regulatory barriers in that area are privacy and electronic communications regulations, which prevent firms from proactively reaching out to customers to offer targeted support? As part of the review, will she ensure that that specific regulatory change is made, so that that can happen?
Emma Reynolds
I assure the right hon. Gentleman that we are looking at that. We will make sure that firms can take advantage of suggesting targeted support to their consumers so that they are better off, can make more of their money and get a better pension, too.
Spending Review 2025
John Glen Excerpts(1 month, 3 weeks ago)
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Rachel Reeves
I thank my hon. Friend, the Chair of the Education Committee, for her question. I appreciate her welcoming the investment in children’s social care, in skills and in schools—issues that she knows and cares passionately about. In the spending review, we were able to set out a total of £86 billion of investment in research and development, much of it spent through our universities and research institutes, but I am certain that the Education Secretary or the relevant Minister will meet my hon. Friend to talk about the wider allocation from this spending review.
John Glen (Salisbury) (Con)
Scientists at the UK Health Security Agency at Porton Down make a massive contribution to the welfare of our country in difficult times. Ten years ago, the Chancellor’s predecessor wanted to invest £525 million in moving to a single science hub in Harlow. Some £400 million has already been spent, and last year, the National Audit Office said that it would cost £3.2 billion to complete the move by 2036. Three weeks ago, I had an Adjournment debate in which I was told that today, we would know the outcome of what was actually going to happen with this project. Can the Chancellor explain what is happening with the future of the UKHSA at Porton Down? Is it going to move to Harlow, at massive expense—six times the original estimate—and 15 years later than was estimated, or can we save some money and use it for better investment in our public estate?
Rachel Reeves
I thank the right hon. Gentleman and member of the Treasury Select Committee for his question. We have made the allocation to the Department of Health and Social Care—an annual uplift of £29 billion—and it will be up to the Secretary of State to allocate that money, but I will make sure that he has heard the right hon. Gentleman’s question and that he gets a proper reply to him.
Spring Statement
John Glen Excerpts(4 months, 1 week ago)
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Rachel Reeves
My hon. Friend speaks powerfully on behalf of his constituents in Loughborough. The 1.5 million additional homes the Government are building will ensure that families in Loughborough have a chance of getting on the housing ladder and that young people in Loughborough will have the opportunities to help build those homes. That is the difference we are making: more jobs, paying decent wages, and more homes for our families.
John Glen (Salisbury) (Con)
I hope the Chancellor, next Wednesday in front of the Treasury Committee, will reiterate her commitment not to come back with more tax increases. On page five of the OBR report, paragraph 1.2 states:
“While the Government’s planning reforms deliver a modest boost to the level of potential output of 0.2 per cent in 2029, its cumulative growth between 2023 and 2029 is still ½ a percentage point lower than we projected in October, and the level of productivity is over 1 per cent lower.”
I would like to know what the Chancellor thinks about that, and can she confirm that the Employment Rights Bill has not been evaluated by the OBR?
Rachel Reeves
The key point in what the right hon. Gentleman says is that cumulative growth is lower from 2023 to the end of the forecast. Of course, this Government did not come into power in 2023; we came into power in July 2024. The OBR numbers show that the economy is bigger because of the changes we have made—it is just a difference in the dates. I look forward to coming to the Treasury Committee next week, and I am sure I will take more questions from the right hon. Gentleman then.
Oral Answers to Questions
John Glen Excerpts(4 months, 4 weeks ago)
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Emma Reynolds
I think that premium bonds do provide excitement, not least in my parents’ household, where they are very popular. They are already well promoted and popular, and we have seen annual investments in premium bonds increase by more than 50% since March 2019. The funds raised through them go towards supporting vital public services.
John Glen (Salisbury) (Con)
I warmly welcome the Government’s commitment to extend the help to save scheme, which has been running for seven years. Martin Lewis describes it as
“a very clever scheme and one that will work for many people.”
May I urge the Minister to look at what needs to be done to raise awareness of it, because the actual uptake is very low, given that the Government have been giving £1,200 over four years? It is critical that the right investment in promoting it happens, because it is such a brilliant scheme.
Emma Reynolds
I could not agree with one of my predecessors more. The right hon. Gentleman is absolutely correct. It is a great scheme and now that we are expanding it, we will take that opportunity to promote it better.
Growing the UK Economy
John Glen Excerpts(6 months ago)
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John Glen (Salisbury) (Con)
Among the fundamental enablers of growth in the economy are financial services and opening up markets to invest. I think there was consensus across this House in the last Parliament on the Financial Services and Markets Act 2023, which provided the framework to do that. What concrete proposals have come forward from the Financial Conduct Authority and the Prudential Regulation Authority consideration of changing some of the restrictions that stop the right levels of investment? This week, the Government enabled about £100 billion of surplus funds from defined-benefit pension schemes to be made available. What proportion of that money will be invested and in what timeframe? The concern around these announcements is the delay to tangible, calculable economic impact.
Darren Jones
I point the right hon. Member to the Chancellor’s Mansion House speech, which set out in detail this Government’s approach to financial services. They are an important enabler for the UK and a particular strength globally, as I know he knows very well. On his particular question, I will need to write to him with the answer, but he can see that this Government are taking action to unlock investment in the UK economy. As has been reported, the Prime Minister and the Chancellor have been meeting regulators to make sure that they are geared for growth as well as for protecting consumers.
Agricultural and Business Property Relief
John Glen Excerpts(6 months, 2 weeks ago)
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Graham Stuart
The hon. Gentleman makes an important point that has not been made so far: we have among the lowest food costs in the world. In fact, all my local farmers are forever moaning at me about how outrageous it is that food is so low in price. As I say to them, the system has allowed them to continue farming, providing first-class food at a very low cost to consumers. It is that carefully balanced ecosystem that will be impacted by this juggernaut creation of the Government, which will raise, if it raises anything at all, very little. That is why it is great to have someone as thoughtful, insightful and empathetic as the Minister on the Government Bench, because we have time to change path away from this ridiculous policy.
John Glen (Salisbury) (Con)
My right hon. Friend is making a very clear case. Of course, there is massive agreement in the room. Does he recognise that with the uncertainty about the land use framework and the Government’s interventions and intentions on development of the work that we did on ELMS—the environmental land management scheme—farmers face massive uncertainty? Does he agree that it would be far better if the Government paused, as the NFU is asking, to look at this matter in the round, alongside the other policy decisions that they need to make—there is plenty of time before next spring—and, in particular, to address the issue about the age distribution of farmers? For younger farmers there will be ways of mitigating this matter and for older ones there simply are not. Overall, they lack clarity on what the future looks like, and that is a real concern.
Graham Stuart
At the very least, as my right hon. Friend says and as a colleague touched on earlier, tweaks could be made to this policy to stop the most egregious negative impact of it on people who have planned in good faith all their lives for a position and are now in no position whatever to change things. It is not just the elderly—everyone looks for the elderly person in their 80s or 90s to pass on, but I met another constituent whose mother died aged 41. These things happen, sadly, and what does that do to a farm? Is it holding hundreds of thousands of pounds in the bank when there are 200 and something acres?
Public Finances: Borrowing Costs
John Glen Excerpts(6 months, 3 weeks ago)
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Darren Jones
I very much agree with my hon. Friend. We have to pay day-to-day bills with the income we generate day to day. The lesson that we learned from the Opposition was about what they were happy to do, but this Government are not. They were happy to announce plans and programmes to make promises to the British people, even though they knew they did not have the money to pay for it. That will never happen under this Labour Government.
John Glen (Salisbury) (Con)
When the Chancellor set the envelope for spending for this Parliament, and said to the Treasury Committee on 6 November that she would not come back for more tax increases or more borrowing, that was based on her assumptions about the cost of borrowing. Those are manifestly in significant doubt, to look at it in the most charitable way. I have sat in the Chief Secretary’s position, and I know he will want to equivocate and push decisions to the next OBR assessment and the next fiscal event, but the truth is surely this: this Government have to cut spending, increase taxes or borrow more. If the cost of borrowing is increasing, that moment will come sooner. Which of those choices is he inclined to make, and when will he tell the British people honestly what this Government have done?
Darren Jones
I have been clear to the House, as has the Chancellor, that the fiscal rules are non-negotiable. Public services will have to live within their means. We set the Budget in the autumn last year, and we have the OBR forecasts coming in March. Those are the numbers that Departments are working to in the spending review, and those are the numbers that we will hold public services to when we conclude the spending review in June.