The Growth Plan

Debate between John Glen and Kwasi Kwarteng

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

I was very surprised to hear the hon. Lady mention energy, given the SNP’s appalling record in that regard. I am very open to her ideas, but I very much recommend that she pursue nuclear power, of which there is a great tradition in Scotland.

[John Glen (Salisbury) (Con)]

I very much welcome the aspirations for growth; all Governments and all Conservative Chancellors should have their minds focused on sustainable growth. I welcome the measures on the EIS and the SEIS, which were planned. I note the economic logic behind the bankers’ bonus cap change, but in my four and a half years as City Minister, the biggest concern that banks had was the overall tax burden. I urge the Chancellor to keep his focus on its global competitiveness. Finally, in an era of grave uncertainty about inflation, there is clear concern in the markets about the irreconcilable realities of having monetary tightening at the same time as fiscal loosening. I would welcome the Chancellor’s observations and his reassurance to the markets at this time.

[Kwasi Kwarteng]

My hon. Friend is absolutely right to say that bankers are concerned about the overall tax burden. That is why many of the bankers in the City of London are going to Paris: because they pay 30% tax there. That is a legitimate thing, and it is why we have reduced tax levels.

With respect to monetary and fiscal policy, my hon. Friend will know that monetary policy is the responsibility of the Bank and is targeted on inflation. The fiscal course that we have charted has absorbed two exogenous shocks, in the form of covid-19 and the Russian invasion of Ukraine. It is entirely appropriate in both those circumstances to have a looser fiscal policy to steer our path through those shocks. There is an entire logic to those positions.