Oral Answers to Questions

John Penrose Excerpts

Tuesday 19th December 2023 Commons Chamber

[Gareth Davies]

I can think of few greater champions for Stoke’s ceramics sector than my hon. Friend. We recognise that carbon leakage is a significant risk for the ceramics sector, so I can offer him two pieces of information. First, we provide free allowances to the ceramics sector under the ETS. Secondly, just yesterday we announced that ceramics will be included in the UK’s carbon border adjustment mechanism.

[John Penrose (Weston-super-Mare) (Con)]

18. If he will make an estimate of the potential impact of a carbon border adjustment mechanism in the form recommended by the Commission for Carbon Competitiveness on fuel duty.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

The Government have announced that they will implement a CBAM from January 2027. The UK CBAM will place a carbon price on some of the most emissions-intensive industrial goods imported to the UK and will ensure that the UK’s decarbonisation efforts lead to a true reduction in global emissions, rather than simply displacing carbon emissions overseas. The delivery of a CBAM will be the subject of further consultation in 2024.

[John Penrose]

I congratulate the Minister. A CBAM is the cheapest and most future-proof way to save the planet and UK manufacturing jobs at the same time, but some of the details look troubling. Why have some manufacturing industries been left out entirely? Why are others arriving late, so they will be vulnerable to dumping? And how will he ensure that this is not just a tax and price rise for already hard-pressed families and businesses?

[Gareth Davies]

I recognise and thank my hon. Friend for his work as chair of the Commission for Carbon Competitiveness. I will directly address his two main questions. On speed, implementation by 2027, at the latest, will allow the Government to engage with businesses to ensure that they are well prepared, but next year’s consultation will provide more information on timings. We have identified eight sectors that have the greatest exposure to carbon leakage, from both a trade and an emissions perspective.

Oral Answers to Questions

John Penrose Excerpts

Tuesday 20th December 2022 Commons Chamber

[James Cartlidge]

I do not entirely accept that. I would be interested to know the detail behind that figure. What we can confirm is that we have two specific levies: one on oil and gas, and one on certain electricity generators. We think that these are being applied in a very fair way. The levy to which the hon. Member refers does include an allowance for investment but this is the point. That level of support cannot continue for ever. The long-term answer is energy security—investment in new energy sources and, indeed, investment in the North sea, supporting UK jobs and the transition to net zero.

[John Penrose (Weston-super-Mare) (Con)]

3. What recent assessment he has made of the effectiveness of the Financial Conduct Authority in protecting customers from loyalty penalties in the insurance market.

[The Chief Secretary to the Treasury (John Glen)]

The Government welcome the Financial Conduct Authority’s pricing rules, introduced in January this year, which require insurers to offer a renewal price no greater than the price the firm would offer to a new customer for the same policy. The Financial Conduct Authority has confirmed there is no evidence of widespread non-compliance with those rules.

[John Penrose]

The FCA’s cheap and, we hope, effective measures to stop insurance company customers being ripped off is in stark contrast to the energy price cap, which was introduced for exactly the same reason, but has not held down the price of energy and has larded hundreds of pounds of extra hedging costs on to every household’s energy bills to boot. Since the Treasury is spending vast amounts of taxpayers’ cash on energy subsidies at the moment, will my right hon. Friend speak to the Secretary of State for Business, Energy and Industrial Strategy about replacing the failed energy cap with a version of the FCA’s much cheaper and more effective approach as soon as energy prices return to normal?

[John Glen]

I am very happy to look at that question further. The Government previously considered, but rejected, asking Ofgem to implement a relative rather than an absolute price cap in energy markets, which would have similarly prevented energy suppliers from charging those large differentials, because it was judged that it was more likely to distort competition in the fixed-term tariff market. As ever, I am happy to continue the conversation with my hon. Friend and I know he will take the matter up further with the regulator.

Autumn Statement

John Penrose Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

What I would say to the hon. Lady is that she should think about what we have done for her constituents in Bradford. When it comes to transport, we have protected the capital budgets that in the end will solve the problems she is talking about. We have also found £500 of support for the average household for their fuel bill next year. We have found more money for schools, hospitals and GP surgeries in Bradford. That will make a difference, and she should welcome that.

[John Penrose (Weston-super-Mare) (Con)]

Can I say how good it is to see the Chancellor channelling his inner Nigel Lawson by referencing not only the big bang, but his attempt to get the next big bang to happen, particularly with supply-side reforms for five key STEM—science, technology, engineering and maths— sectors, plus the much-needed roll-out of the powers for the digital markets unit in the Competition and Markets Authority? May I urge him to provide us with dates as soon as possible for when these are going to take place, because many of them are overdue and much needed? Can I further press him that there is a further supply-side reform to do with open data, which could be at least as big as any of the others he has announced today and transformational across large swathes of the rest of our economy?

[Jeremy Hunt]

I always listen to my hon. Friend on matters such as supply-side reforms and, indeed, long-term competitiveness. I want to reassure him that, while it is a long-term aspiration to become the world’s next silicon valley, we want to put those foundations in place next year. That is why, in those five growth sectors, I said that we will review and decide on changes to all the EU regulations that affect our growth industries in the next calendar year to make sure that we put those foundations in place fast.

Alcohol Taxation

John Penrose Excerpts

Thursday 7th July 2022 Commons Chamber

[Alun Cairns]

The hon. Member makes an extremely important point. As I said, some people are encouraged to drink more at home by the discounted prices offered by the large retailers. I would add that in Scotland and Wales—I am not so familiar with the position in Northern Ireland—the retailers receive the extra differential with minimum alcohol pricing, in comparison with what is available in England. That gives some room for the Treasury to react positively to support the pubs and brewers, as he and I seek to underline.

The small brewers relief has been proven to deliver major benefits. It enables small brewers to compete with larger operators and to innovate and generate new options for consumers. It will be replaced by the small producers relief to offer similar or common benefits to the wider sector and to prevent the current cliff edge. Again, the Government’s objectives are positive, but I am concerned that the proposed changes introduce significant complexity to the process. Moving from 5,000 hectolitres at a 50% discount, to a maximum of 2,500 hectolitres at a 50% discount, tapering up to a 100,000 hectolitre maximum at up to 8.5% ABV, along with a cash limit and an average ABV measure, is much more complex than it needs to be. It is hard enough to say, let alone follow the process. It also makes it much more unpredictable for the businesses we are seeking to encourage to innovate, to invest and to create wealth at the smaller end of the scale.

[John Penrose (Weston-super-Mare) (Con)]

I congratulate my right hon. Friend on securing this debate on an important issue, and he is making a powerful speech. I was particularly interested in his point about broadening the duty from brewers across to the wider sector. In particular, the cider sector is important in the west country. Thatchers Cider, based in my constituency, is complaining, both on its behalf and that of many other small producers, about the massive increase in complexity that this collective set of changes has introduced. It may be easier to understand at a high level, but Martin Thatcher has written to me saying that for individual firms the

“huge increase in red tape and bureaucracy brought in as a result of these proposals will result in a need for increased staff to manage monthly excise duty returns”,

and he goes on to talk about the increased costs of that burden. I hope my right hon. Friend will address that and persuade the Minister to respond.

[Alun Cairns]

I am grateful to my hon. Friend for his point. The significant advantage that the cider industry receives—the differential in taxation status— is testament to the campaigning that my hon. and right hon. Friends have done for the industry. Some have called for that to be addressed, but that is not proposed in the Government’s plans, and I am not suggesting that should change. He makes an extremely important point about the complexity. Even when there are potential advantages for some sectors over others, the complexity detracts from that. The simpler the process, the better that would be.

I hope that the Minister agrees that the current proposal is too complex, and a simplified approach would work much better. The principles or broad approach of this incentive are important. Why is there no similar support for UK vineyards as well, all of which in the UK are small operators? These businesses invest for many years before receiving a return on that investment. The quality of wine competes on par with traditional winemaking countries and wins.

Llanerch Vineyard and Glyndwr Vineyard in my constituency are excellent examples. They invest heavily, have long lead times, are excellent employers and are great visitor attractions. In reality, they are small operators, and extending either the principle of the small producers relief to include vineyards or simply increasing the current arrangement—albeit simplified from the 8.5% ABV limit—would make a major difference and provide significant advantage to wines made in England and Wales. Support for such vineyards in the UK would not pose risks or undermine the Treasury’s ambitions and can be met within the World Trade Organisation rules.

Oral Answers to Questions

John Penrose Excerpts

Tuesday 17th May 2022 Commons Chamber

[John Glen]

The hon. Lady is absolutely right to highlight Companies House reform as a major area that we are working on. The Government forwarded more than £60 million to start that work, which has now been accelerated. Alongside the register of overseas entities and beneficial ownership, the increased transparency of those assets will be very welcome.

[John Penrose (Weston-super-Mare) (Con)]

5. What assessment he has made of the effects of high marginal deduction rates on work incentives for people who are (a) key workers, (b) on below average incomes and (c) on above average incomes.

[The Financial Secretary to the Treasury (Lucy Frazer)]

The Government are committed to helping people keep more of what they own and I give credit to my hon. Friend for his work, which was instrumental in our lowering of the universal credit taper rate from 63% to 55%. That is a tax cut for low-paid workers on universal credit. He will know that from July we will raise the national insurance contributions threshold so that the amount that working people will be able to earn tax-free will increase by £2,690, helping to ensure that work pays.

[John Penrose]

I thank my right hon. and learned Friend for her kind comments. The changes that she has just re-announced are extremely welcome. With energy and food prices continuing to spiral, does the Treasury team accept that they will soon have to go even further? Do they agree that compared with increasing benefits, further cuts in these combined tax and benefits withdrawal rates will be a better way to put money in the pockets of many lower-paid families and that in future, the combined rates paid by less well-off families should never be higher than the top rates paid by the rich?

[Lucy Frazer]

My hon. Friend has a keen interest in this area and I read his report, “Poverty Trapped”, with some interest. He makes a valuable point and will know that the Government have made progress in this area. The old system applied an effective tax rate of more than 90% to lower earners in some cases and, as a result of the changes we have recently made, an adult working 35 hours at the national living wage with two children over five will, for example, benefit from an additional £1,610 a year.

Oral Answers to Questions

John Penrose Excerpts

Tuesday 15th March 2022 Commons Chamber

[Rishi Sunak]

We are spending record amounts on supporting those who are disabled. Relative to the OECD, I think we are spending in excess of the average for other leading countries. My right hon. Friend the Secretary of State for Work and Pensions has a particular programme of support in place to help those who are disabled to move into employment; plans were announced earlier this year.

[John Penrose (Weston-super-Mare) (Con)]

T6. In his last Budget, the Chancellor slashed universal credit withdrawal rates, delivering an 8% tax cut for the least well off, but as I explained in “Poverty Trapped”, the combined deductions from income tax and benefits withdrawals often still top 70% for the lowest-paid. If tax rates above 45% destroy work incentives for high earners, why should it be any different for low earners? How much more opportunity, energy and ambition could we unleash if these regressively high and unfair rates were cut even further?

[Lucy Frazer]

My hon. Friend is right to highlight the effect of a high effective tax rate on incentives to work. That is why the Government reduced the universal credit taper rate from 63% to 55% and increased the universal credit work allowance by £500 per year, which is essentially a tax cut for the lowest-paid, worth more than £2 billion in 2022-23, and means that 1.9 million households will keep an extra £1,000 per year on average.

Economic Update

John Penrose Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rishi Sunak]

The hon. Gentleman is, of course, well informed on these issues. Our intention is that those people will benefit from the £150, which is why we are providing the discretionary fund. It has been sized with a sense of who those people are and how many they are. We will of course provide some guidance to local authorities on whom we would expect the support to go to, but ultimately they will be able to make those decisions for themselves.

[John Penrose (Weston-super-Mare) (Con)]

I thank the Chancellor for an extremely welcome package, which is the latest step in a series of strong reactions to different crises throughout the pandemic and today. He also mentioned improving investment in North sea gas fields, which is very welcome. It is only a temporary set of solutions, however, that will dull the initial economic pain without solving the long-term problem of sky-high energy prices. What conversations has he had with the Energy Secretary, who is sitting next to him, about solutions to deal with those longer-term problems? When we can we expect to hear answers on such things as reforming the price cap and the wholesale energy market?

[Rishi Sunak]

My hon. Friend is very thoughtful on such matters and has, rightly, long made the point that we must also ensure that the long-term energy market is working in all our benefit. The Energy Secretary, the Prime Minister and I have been involved in such conversations for some time. The Energy Secretary is working on a set of measures that will address many of my hon. Friend’s concerns and he should expect to hear from the Government soon.

Brexit: Opportunities

John Penrose Excerpts

Thursday 16th September 2021 Commons Chamber

[Michael Ellis]

I know the hon. Lady’s constituency well enough to know how beautiful it is. She talks, quite rightly, about its tourism value. The fact of the matter is that tourism has been very negatively affected, tragically, because of the covid-19 pandemic. It is nothing to do with Brexit. The reality is that, of course, we are pragmatic. We will be pragmatic and we listen to all. That is why we want to listen to the British people about how to reduce regulations.

[John Penrose (Weston-super-Mare) (Con)]

I welcome the scale, scope and ambition of the impressive list of intentions that began the Minister’s statement. May I press him on one point, which he mentioned later on? It is a shared point between my report on competition policy, which he kindly mentioned, and the TIGRR report, which is about process ongoing to ensure that we do not return to a pro-regulatory ratchet. The difficulty we all face here is that the entire culture of this place and Whitehall more generally is to invent more rules. That is how we make our bones in this place. We need to have a really robust process that prevents that and puts it into reverse. The one in, two out—with no exceptions and no exemptions—is absolutely essential. I hope he will be able to firm that up and commit to it irrevocably as soon as possible.

[Michael Ellis]

I thank my hon. Friend for his work in this area. I agree about the almost inevitable direction of travel, unless there is an intercession, which is what the Government wish and intend to do with my statement today and the announcement that we are going forward with. I repeat my thanks for his work and assure him of our best intentions in regard to fulfilling his wishes.

Ministerial Code/Register of Ministers’ Interests

John Penrose Excerpts

Tuesday 18th May 2021 Commons Chamber

[Penny Mordaunt]

As I said in my opening response to the right hon. Member for Ashton-under-Lyne (Angela Rayner), these issues are being looked at—there are reviews in train—and it would not be appropriate for me to comment on those until they have reported. However, I think all Members of this House will want things looked at. They will want to ensure that we get to the bottom of these issues, and I hope, too, that we will look at the wider issues around the Gupta Family Group and the role of the SNP in those matters.

[John Penrose (Weston-super-Mare) (Con)]

I welcome the appointment of Lord Geidt and also the modest increase in the terms of reference to increase his independence. Do my right hon. Friends accept that it is possible still for us to go a little further to increase the degree of independence of Lord Geidt and his successors, and that it is not too late to add the extra levels of independence that have been suggested by Lord Evans and, among others, me to make sure that the role has extra credibility, without necessarily giving way to some of the extraordinary allegations that seem to prejudge some of the important work being done by independent or cross-party reviews already under way in this important area?

[Penny Mordaunt]

May I take this opportunity to thank my hon. Friend for the work he has done on these and related matters? It is very helpful when colleagues make positive suggestions. My understanding is that a response has been sent to Lord Evans, but we are keeping all things under review. We clearly want to ensure that we arrive at a situation where we can have the greatest possible transparency and ensure that we retain the trust of the public.

Spending Review 2020 and OBR Forecast

John Penrose Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

I am grateful to the hon. Gentleman for his question. I know that it is a topic on which he speaks passionately. He will be pleased to know more generally about our record spending on R&D next year of just shy of £15 billion; the exact allocation is for the Department for Business, Energy and Industrial Strategy, but there is a significant increase for basic research. Also, within the Department of Health and Social Care Budget settlement, there is about £1.3 billion to fund research for the National Institute for Health Research and Genomics England—both of which do a fantastic job, and I am sure will be working on treatments for us all for many years to come.

[John Penrose (Weston-super-Mare) (Con)]

I welcome the Chancellor’s continuing commitment to sound money. It is particularly easy to forget, in a year when we have just seen an 11.3% cut in the size of the economy, that ultimately, all the money that we are borrowing must eventually be paid back by us as taxpayers. So I urge him not to lose that focus, and as soon as possible to get back to a sustainable basis. As part of that, could he say more about the Restart programme, which he mentioned earlier—a crucial thing to get members of the long-term unemployed back into work? How many people does he expect that to help, and what benefit does he expect that to have for our long-term, sustainable economy?

[Rishi Sunak]

As ever, my right hon. Friend speaks fantastically good sense. He is right; we will need to return to a sustainable fiscal position, not least to build resilience for the next crisis or shock that comes along. We want to be able to react in the same comprehensive and generous way that we did this time, and that requires us to have a strong set of public finances going into it.

My right hon. Friend is right about the Restart programme, which will help, we hope, around 1 million of those who are long-term unemployed; it will be an exciting and ambitious programme. The Institute for Employment Studies has spoken very well about the evidence in favour of that type of high-quality, individual work-focused approach making an enormous difference in getting people back into work. If we can do that, we can reduce some of the long-term scarring that they will face. So I have high hopes for what that programme can achieve.