Lindsay Hoyle
Main Page: Lindsay Hoyle (Speaker - Chorley)Department Debates - View all Lindsay Hoyle's debates with the HM Treasury
(1 day, 8 hours ago)
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Dr Chambers
Many businesses in Winchester that I speak to on a regular basis talk about higher energy costs and national insurance rises, and many bring up the increased red tape that has resulted from the Conservatives’ failed Brexit project. Businesses in Winchester say that they want growth, not continued red tape. About two weeks ago, I spoke to one such business, RJM International, located just off the high street. For some reason, the Government refuse to even consider reducing trade barriers to the EU by having a bespoke customs union, but industry wants it and the public are increasingly supportive. Why will the Government not even assess the economic case for a customs union and why are they clinging to a failed ideology at the expense of growing our economy?
Dan Tomlinson
This Government are fully committed to resetting our relationship with the European Union. As the hon. Gentleman highlighted, the previous Government did as much as they could to damage that relationship, damage our productivity and damage our working relationship with our nearest partners. We are seeking to change that: we are negotiating a sanitary and phytosanitary agreement; we are looking at electricity and energy; and we are looking at what more we can do to deepen our trading relationship, which will be good for productivity and jobs. People said that we could not make progress with both the EU and the United States, but we did not have to choose: instead, we are making progress with trading partners across the world.
Dan Tomlinson
I thank my hon. Friend for her representation of Little Italy in her fantastic constituency. We are working on the high streets strategy. She is right to highlight that with long-term trends, whether the impact of the pandemic or of the shift to online retail, we need to look at this as a whole. On taxation and business rates in particular, we have for the first time provided a wedge in the tax system so that the rate that online giants pay for their warehouses is a third higher than the rate paid by the smallest businesses on the high street. There is a significantly higher multiplier for the larger businesses on my hon. Friend’s high street than for the smaller ones, but we will keep looking at the issue and at what more we can do to support businesses across the tax system.
Daisy Cooper (St Albans) (LD)
Small businesses are the backbone of our economy, but the Federation of Small Businesses is warning that they will face a cost cliff edge in April because of the cumulative impact of all the new taxes and responsibilities put on them at the same time. During the course of the Finance Bill, we Liberal Democrats have repeatedly called for an assessment of the cumulative impact of taxes on hospitality and small businesses, including business rates. When the Government bring forward their high streets strategy, will it include an assessment of the cumulative impact of all tax changes—yes or no?
Rachel Reeves
There are two things going on with heating oil. First, we have the conflict in the middle east, which we are trying to de-escalate, and secondly, we have price gouging. The way to deal with that is to ensure that customers are treated fairly and companies are not ripping off their customers. That is why we have asked the Competition and Markets Authority to look at the issues around heating oil, but we have to get to the root of the problem, which is that vessels are not flowing through the strait of Hormuz, and some businesses are using this crisis as an opportunity to rip off consumers. Rather than throwing public money at something when that is not the solution, let us deal with price gouging and getting the oil flowing.
James Wild (North West Norfolk) (Con)
The Chancellor promised in her first Budget that she would not extend the freeze on income tax thresholds, because it
“would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.]
In her second Budget, the Chancellor broke her promise with a £23 billion tax rise, bringing a million more people into paying higher rate tax. When people are set to struggle with the cost of living over this Parliament, why are the Government choosing to make their lives harder?
James Murray
If the right hon. Gentleman looks at the plans that we set out through our spending review, he will be clear that we are increasing spending by £50 billion a year by 2028-29 compared with the previous Government’s plans. At the same time, we are ensuring that taxpayers get value for money. We are making £3.9 billion of efficiency savings by 2029-30, rising to £5 billion by 2030-31.
Richard Fuller (North Bedfordshire) (Con)
The Government’s spending plans look very, very iffy. The Minister has a chance of fitting in with the Chancellor’s fiscal rules—if there is no further downgrade on economic growth, which seems unlikely; if the Government have the backbone to rein in public spending and to increase taxes in the last years of the Parliament, which seems very unlikely; if the Government do not have to step in with any significant energy support because no money has been set aside; and if the Government can get £4.8 billion in salary sacrifice in 2029-30 revenues, which the industry says is a pipe dream. So here is another “if”. If the Minister’s spending plans start to fall apart, will he prioritise cuts in public spending over tax increases?
James Murray
I will give the hon. Gentleman an “if”. If he were honest and remembered his time in Liz Truss’s Government, he might not have the gall to make comments like that across the Dispatch Box—
Mr Speaker
Order. All Members are honest. Please think about what you are saying. You cannot individually attack a Member for not being honest. We are all honourable Members, as you well know. I call the honourable Minister.
James Murray
Thank you very much, Mr Speaker. I apologise unreservedly for the implication about the hon. Gentleman: I know that he is a very decent and honourable man, and I withdraw that comment. He may have unintentionally misled the House by failing to declare his part in the Liz Truss Government and the impact that that had on public spending. As he will know, we have stuck to the fiscal rules that this Chancellor introduced at the beginning of this Government in every fiscal event that we have had. Those fiscal rules are ironclad. We have sustainable plans for public spending, and we are ensuring that we are managing the economy in a way that the hon. Gentleman’s party could only dream of.
Torsten Bell
The hon. Member will know that it is a long-standing Government policy that the uprating of pensions is prioritised for residents in the UK, not least because the uprating levels reflect the path of earnings and prices in the UK. She will know that that was the Government’s policy under the Liberal Democrat-Conservative coalition Government, and it remains the case today.
Mark Garnier (Wyre Forest) (Con)
Thanks to this Government’s policies on pensions, which actively disincentivise saving into private pension schemes, people will increasingly rely on the support of the state. This is not sustainable. I asked the Minister about this yesterday, and he dodged the question, so I will ask him again: will the Government cancel pension fund mandation and abandon salary sacrifice caps—yes or no?
Tracy Gilbert (Edinburgh North and Leith) (Lab)
A number of hospitality businesses in my constituency have raised with me that the UK rate of VAT is much higher than it is in France and Germany. Will my hon. Friend ask the Office for Budget Responsibility to model the impact of VAT cuts, as studies have previously suggested that cuts—
Sorcha Eastwood (Lagan Valley) (Alliance)
I thank the Minister for his response. I have to declare an interest because I started a parliamentary petition exactly on a VAT cut for hospitality in Northern Ireland, the reason being that we have the Republic of Ireland with its very competitive VAT rate right up against us. Businesses saw the official Government response, because that petition got over 10,000 signatures, and they felt very despondent. I am sure that Treasury Ministers and the Chancellor will want to join me in trying to do everything we can to protect our hospitality sector. The Minister says this is complex to do, but would he agree with me that it is worth revisiting that idea?
Torsten Bell
I think all of us recognise that our hospitality and retail sectors have had a difficult time in recent years. For retail, that goes back before the pandemic, with the growth of online shopping. The squeeze on energy costs in the outrun of the pandemic has squeezed how much people are spending on hospitality.
Specifically on the hon. Member’s question about national insurance, I am sure he is aware that those under the age of 21 and on youth apprenticeships are exempt from national insurance entirely. I would gently point out that the youth employment pattern we see in the labour market long predates the changes to national insurance last year.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I am glad that the Government are introducing things like the youth guarantee and working to help those who are not in education, employment or training. However, as the hon. Member for Henley and Thame (Freddie van Mierlo) highlighted, AI is also an increasing concern. Businesses I have spoken to are concerned about the number of people they will not be employing in the future. The Minister has hinted that the Government are looking at this systemically. What conversations is he having across Government and, crucially, with businesses so that we can plan for what could be a real crisis in the future?
Torsten Bell
My hon. Friend and I have discussed these issues on many occasions, particularly as they are specific to his constituency and other coalfield communities. There are challenges, particularly with youth employment, which goes back to the last decade in particular, and we absolutely need to prioritise that. However, I would also say a word of warning on the view of the overall labour market. Looking at the employment level last year, which was around 75%, there have been only two years in peacetime in the past 100 years when Britain has had a higher employment rate. I think we should be a bit careful about talking down the resilience of the UK economy or, as in this case, the resilience of the labour market. We have had only two years in the past 100 in peacetime when Britain has had a higher employment rate than last year.
Richard Fuller (North Bedfordshire) (Con)
Last month, The Times reported that the Government may drop their pledge on minimum wage equalisation over fears of youth joblessness, and the BBC reports that the Government are considering a delay. Can the Minister advise whether the Government have considered any such delay or policy changes, and if so, what decision has been reached?
Rachel Reeves
I thank my hon. Friend for his question and pay tribute to my hon. and learned Friend the Economic Secretary to the Treasury for all the excellent work that she has done to take this agenda forward. The lack of a bank account does make it harder for people to secure stable employment and stable housing. That is why our financial inclusion strategy secured a commitment from the major banks to work with Shelter directly to make it easier for people without standard ID to access a bank account. This partnership with Shelter will particularly help to break the cycle of homelessness and support people to rebuild their lives, which we all want to see.
Sir Mel Stride (Central Devon) (Con)
For every single year of the last Conservative Government, we froze fuel duty, and we did so to stand up for hard-working families. Given that petrol prices are surging at the pumps, why has the right hon. Lady chosen now to put up fuel duty?
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
Mr Speaker
Many Back Benchers did not get in earlier, so, please, it would help me if we could try to speed up.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I thank my hon. Friend for his representations on this matter here today and over many months, and in Westminster Hall just a few weeks ago. The rural fuel duty relief scheme does provide that 5p discount and it will benefit his constituents on the islands and in the communities he represents. We will of course keep all our taxes under review. I will be happy to meet him to talk about this one.
Daisy Cooper (St Albans) (LD)
In times of crisis, the UK Government have often had to spend more on energy support for households and small businesses than other comparable countries, because our energy market is so broken. Hospitality and small businesses tell me that some suppliers simply refuse to supply hospitality businesses at all. If the Government are determined to refuse Liberal Democrat calls for an emergency VAT cut, can I please ask them whether, at the very least, they will consider our call to instruct the Competition and Markets Authority to investigate bad practices in the energy market affecting hospitality and small businesses, so that we can drive down bills through greater competition?