Oral Answers to Questions

Debate between John Penrose and John Glen

Tuesday 20th December 2022 Commons Chamber

[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.

Oral Answers to Questions

Debate between John Penrose and John Glen

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.

Draft Public Bodies (Abolition of Public Works Loan Commissioners) Order 2019

Debate between John Penrose and John Glen

Monday 3rd February 2020 General Committees

[John Glen]

I am keen to respond to the points made by the hon. Members for Stalybridge and Hyde, and for Glenrothes. I stress, as I did in my opening remarks, that the order removes a purely ceremonial role. Although we are removing a function, it is one that does not exist in a meaningful sense, in terms of arbitrating on individual loan decisions.

The issue of commercial property speculation was raised. Local authority borrowing and spending decisions are made at a local level with reference to the Chartered Institute of Public Finance and Accountancy’s prudential code and the Ministry of Housing, Communities and Local Government’s statutory guidance. Those bodies revised the guidance in 2018, which makes it clear to local authorities that if they borrow more than or in advance of their needs solely to generate a profit, they are not acting in accordance with the prudential framework. MHCLG is reviewing the impact of the revisions to the prudential framework. When local authorities borrow, they must have regard to it to ensure that their borrowing is sensible and affordable.

Borrowing and capital spending decisions are devolved to local councils, but it is expected that they should not take on disproportionate levels of financial risk. PWLB finance continues to play a critical role in helping local authorities to transform services, but they cannot use that provision for day-to-day spending, which must be balanced off by the accounting officers each year.

The hon. Member for Stalybridge and Hyde asked about the interest rate rise before Christmas. I am sorry about the apparent lack of answer to any question he may have asked. The Government raised rates to slow borrowing, because of the statutory lending limit; they also raised that limit by £10 billion, to ensure that lending remained available. Let me stress that that is managed by the Debt Management Office; the rates are set daily against benchmark gilt prices, and should be seen against the spending round provision for local government. The forecast is for a 4.4% increase in real terms this coming year—the largest increase in spending power since 2010. I should also mention the additional grant funding available for adults and children in social care announced in the spending review.

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

Could I press the Minister a little more on his answer about the interest rate rise? Since there is concern in the Treasury and elsewhere in Government about borrowing to invest in commercial property, as he mentioned in his reply letter to the Chair of the Treasury Committee, and as he just laid out, is he at all concerned that raising the interest rate from 1.8% to 2.8% may have a depressing effect on local authority investment in non-commercial property—that is, in genuine capital expenditure? As he rightly laid out, the Public Works Loan Board was originally constructed to enable that investment.

[John Glen]

All these matters are subject to ongoing review. There is no evidence that the rate is depleting the ability of local authorities to borrow to invest in the sorts of projects that the Government, CIPFA and MHCLG would deem appropriate, but as I indicated, the subject of this SI is much narrower than that. The wider issue is a separate matter, which is always under review. I would be happy to engage with my hon. Friend on any issues that he wants to raise from his experience of his local authority.

[John Penrose]

Since the Minister kindly makes that offer, the Treasury has raised the interest by what must be roughly 35%, from 1.8% to 2.8%. Surely that must have an impact on the amount of borrowing that local authorities are willing to do for what are presumably much-needed capital projects. Does the Minister have any assessment of the likely impact on demand for that kind of genuinely needed loan?

Short Money

Debate between John Penrose and John Glen

Tuesday 23rd February 2016 Commons Chamber

[John Penrose]

Obviously, the conclusions of the request for views will depend on what views are expressed, and I do not want to prejudge that. We will, however, want to move promptly and swiftly to make sure that any staff who might be affected by any changes that are announced have the maximum time for planning and that there is certainty as soon as there can be.

[John Glen (Salisbury) (Con)]

I regard Short money as a critical part of our democracy, but given the realistic comparison with special advisers, and the steps the Government have taken to have transparency in the publication of senior special advisers’ salaries, does the Minister not think it appropriate for the Opposition to show greater transparency in the salaries of their senior appointed researchers?

[John Penrose]

My hon. Friend, who was involved with administering Short money and policy development grants before he came into the House, knows whereof he speaks. He is right that it is essential that we demand the same transparency for taxpayers’ money in all areas. That should include not just the cost of Spads, which is already transparent, but, equally, policy development grants and Short money.

Short Money and Policy Development Grant

Debate between John Penrose and John Glen

Thursday 11th February 2016 Commons Chamber

[John Penrose]

I agree with large parts of what the hon. Gentleman says. I think that the public will look at these contributions from the public purse—which taxpayers fund without choice, unlike other forms of political donation about which people do have a choice—and wonder why the political classes think that they should be exempt, particularly because, as the hon. Gentleman rightly points out, it is far more possible nowadays to do this work in an efficient fashion and to deliver greater efficiencies. I believe that he has in the past turned down potential allocations of either Short money or the policy development grant to which he was theoretically entitled, and I compliment him on that principled stand.

[John Glen (Salisbury) (Con)]

Speaking as one who managed Short money and the policy development grant for the Conservative party when we were in opposition, I think that they are critical elements of what we need in order to function effectively in a democracy. I recognise that the grants have increased significantly, but I would gently say to those on the Front Bench that when making proposals about the future of these sums and how they are to be spent, due consideration should be given to the risks of their being spent more broadly in political parties, and also the opportunities that exist to fund a great deal of the work involved from sources outside political parties in the modern age of politics.

[John Penrose]

My hon. Friend is absolutely right, and, as he says, he speaks from personal experience. I think that the crucial point we all need to remember—the guiding star—is that at some point whoever is in government will be in opposition, although I hope it will not be for a great deal of time in our case. We must therefore come up with rules that we are all happy to live with, whichever side of the aisle we are on.