Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(3 months, 3 weeks ago)
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Andrew Griffith
Yes, I congratulate SaxaVord on achieving the necessary licences to pursue vertical launches from Scotland. I hope to see the success of that launch, as well as rocket boosters under the UK space programme in 2024.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(5 months, 3 weeks ago)
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Andrew Griffith
I know that my hon. Friend does fantastic work highlighting polar research through the all-party parliamentary group for the polar regions. I will be happy to champion that work, and to meet him regarding that important domain for science.
The Minister of State, Department for Science, Innovation and Technology (Andrew Griffith)
Teesside is a wonderful net zero powerhouse, and I commend the green steel project. That is one reason why Teesside was chosen to pilot the Innovate UK programme of launchpads, each of which will receive up to £7.5 million.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(8 months ago)
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Andrew Griffith
My hon. Friend has great knowledge of these matters. It was a privilege to work with him and the sector on how we can offer consumers and homebuyers more choice. That choice includes the opportunity of long-term fixed-rate mortgages, and my officials and I continue to work on how we can reduce frictions and barriers to those mortgages.
Andrew Griffith
With millions of British jobs dependent on financial services, including an estimated 20,000 jobs in Brighton and Hove, I hope the hon. Lady will join me in celebrating a sustainably profitable financial sector. It is only that that gives us the ability to invest in skills and technology.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(10 months, 3 weeks ago)
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Andrew Griffith
I thank the hon. Member for her question, but regrettably the proposal that she and her party put forward would not only delay the point at which we are able to bear down on inflation and deliver the nation’s mortgage holders the lower interest they need but, as I understand, it would do nothing for the plight of private renters.
Andrew Griffith
I always listen enormously carefully to my hon. Friend’s powerful advocacy for Stoke-on-Trent, and his constituents put their trust in this Government. One thing they put their trust in, is that this Government would not come forward with the sort of unfunded spending commitments that we see on the Labour Benches. That would be disastrous for my hon. Friend’s constituents because it would see inflation remain higher for longer.
Mortgage Market
Debate between Lindsay Hoyle and Andrew Griffith(10 months, 4 weeks ago)
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Andrew Griffith
We enjoy, as ever, the hon. Member’s rhetoric, but he did not address what his plan would be. He also did not acknowledge that this has an international factor. Perhaps he or one of his colleagues would like to explain why we have seen similar interest rate increases in the USA, where the 30-year rate—the market is somewhat different there—has increased from 4% at the start of 2022 to more than 6% today.
Mr Speaker
In fairness, the right hon. Member for Wolverhampton South East (Mr McFadden) is right honourable. But there we are. I call the Chair of the Select Committee.
Harriett Baldwin (West Worcestershire) (Con)
The Government have given the Bank of England the task of targeting inflation at 2%, and our Committee has regularly held the Bank of England Governor’s feet to the fire over its performance on that inflation target. Mortgage rates have been increasing because inflation has been higher for longer than expected. In fact, the Governor said in his evidence to our Committee last November that from now on, our grumpy constituents who are having to pay higher mortgage rates should complain to him rather than to the Government. Will the Economic Secretary endorse the Treasury Committee’s campaign to ask the banks why, instead of just raising mortgage rates on the day the Bank of England raises rates, they do not also increase the savings rates that are paid to our constituents?
Andrew Griffith
The independent Governor of the Bank of England is, of course, right. Today we have seen strong print on wage growth, in part due to the 9.7% increase in the national living wage, on which I hope Members will join me in congratulating the Government. My hon. Friend is, as ever, right to highlight the impact on savers. It is important to me and to this Government that savers get a fair deal, which is one of the reasons why National Savings and Investments continues to offer savers an attractive range of products in the market.
Stewart Hosie (Dundee East) (SNP)
Millions of households are now struggling as their fixed-rate mortgages end and they are moved to much higher variable rates. We also know that only a third of the households that are expected to move from cheap fixed-rate deals have done so, so there is a great deal of pain to go, with 116,000 households a month coming off fixed-rate deals.
Some in the City are suggesting that what we are seeing is a complete reset of the mortgage market, which would imply that there should be a complete reset of the Government’s approach. Given that changes to mortgage rates are driven by changes to the base rate, and that the base rate is the central bank’s primary tool to meet the 2% inflation target handed to it by the Government, what discussions have the Government had with the Governor of the central bank about the effectiveness, or the appropriateness, of an inflation target being the primary target that the central bank works towards?
Andrew Griffith
At his spring statement, the Chancellor was very clear about the Bank of England’s continued remit, beyond which it remains operationally independent. It has been a long-standing feature of this House that Treasury Ministers do not tell the Bank of England how to run monetary policy. Three of the Prime Minister’s five priorities are getting the economy growing, reducing debt and halving inflation.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 1 month ago)
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Andrew Griffith
I thank my right hon. Friend for his comments. The Government join the Bank of England in welcoming the comprehensive set of actions taken yesterday by the Swiss authorities to ensure financial stability. It would not be for me to talk from the Dispatch Box about the treatment of creditors, but the UK’s bank resolution framework has a clear statutory order in which shareholders and creditors would bear losses in a resolution or insolvency scenario.
Andrew Griffith
The hon. Member—[Interruption.] Forgive me, the right hon. Member will be aware that interest rates have been increasing globally. Interest rates in the UK are now lower than the equivalent in the US and are lower than they were last autumn. The Government have a range of measures to help hard-pressed mortgage payers, but above all else, our strong stewardship of the economy is bringing down interest rates and means that we are on track to halve inflation this year.
Andrew Griffith
The OBR has confirmed that the UK economy will avoid a technical recession and was the fastest growing economy in the G7 for the past two years.
Mr McFadden
The Minister either does not know or will not say what the total cost was. Is it not interesting that it is always someone else’s fault? One of the first things that the Prime Minister did when he took office was to give in to his Back Benchers on house building targets. The Home Builders Federation now says that the supply of new housing is likely to fall to its lowest level since the second world war—less than half the Government’s target. How will building fewer homes as a result of a back-stairs deal inside the Conservative party help young people in our constituencies who dream of owning their own home and getting on the property ladder?
Andrew Griffith
We share the aspiration of young people to own their own home, but the best way to help them do that is to have a vibrant, growing economy. We are on the side of doing that. We are taking actions that will restore the economy to growth. Every Labour Government who have ever taken office have left unemployment at a higher rate than when they came in.
Silicon Valley Bank
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 1 month ago)
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The Economic Secretary to the Treasury (Andrew Griffith)
With your permission, Mr Speaker, I will make a statement on the steps His Majesty’s Government have taken to limit risks to our tech and life sciences sector.
Following the rapid deterioration of Silicon Valley Bank, and working in concert with the Bank of England, early this morning we facilitated the purchase of the UK subsidiary of Silicon Valley Bank by HSBC. Serving 39 million customers globally, and headquartered and listed here in the UK, HSBC is Europe’s largest bank. Those affected are now secure in the knowledge that their deposits are protected and that they can bank as normal. Customers should not notice any changes, while the wider UK banking system remains safe, sound and well capitalised.
Using stabilisation powers granted by the Banking Act 2009, which afforded us the ability to safely manage the failure of banks, we have forestalled disruption in the tech sector and supported confidence in the UK financial system. The resolution action was taken by the Bank of England in consultation with HM Treasury, using its powers to transfer the UK business of SVB to a private sector purchaser. As required by the Act, the Bank of England consulted the Treasury, the Prudential Regulation Authority and the Financial Conduct Authority on its assessment that all required conditions for that transaction had been met.
We have been able to achieve this outcome—the best possible outcome—in short order without any taxpayer money or Government guarantees. There has been no bail-out, and the actions taken are a win for customers, taxpayers and the banking system. The transfer of SVB UK to a buyer has allowed the Treasury to limit the risk to public funds by ensuring that shareholders and creditors, rather than depositors, bear losses. To help achieve that result, the Bank of England has made a related instrument bringing about a mandatory reduction of capital instruments in SVB UK, restoring it to viability. It is my view that in this situation, the system worked as we would hope.
In order to ensure that the sale could proceed, the Government are using their powers under the Banking Act to provide HSBC with an exception to certain ringfencing requirements. That was crucial to ensuring that a successful transaction could be executed, that the bank has the liquidity it needs, and that deposits and public funds are protected.
The outcome will provide security for some of the UK’s most innovative, fast-growing firms. The UK’s tech and life sciences sectors are world leading, hundreds of thousands of people are employed in them, and they make a very substantial contribution to the economy as a whole. My right hon. Friends the Prime Minister and the Chancellor have been clear throughout that we will look after our high-tech sectors, and that is what we have done. The Bank of England has confirmed that, as a result of the swift, decisive action we have taken, depositors will be able to access their accounts. It is worth reiterating that, as the Governor has said, the wider UK banking system remains safe, sound and well capitalised.
In concluding, I place on record my sincere thanks to my fellow Ministers across Whitehall, to officials at the Treasury and to regulators. They worked tirelessly through the weekend to grip the situation, to deliver this solution and to prevent real jeopardy to hundreds of the UK’s most innovative companies.
Andrew Griffith
I think concealed within that was grudging support, and I am sure that the hon. Lady would like to add her voice to those of so many in the sector who have welcomed this announcement today, which provides the important confidence and stability that are needed. She raised the point that SVB UK has a separate banking licence, and it is precisely because of that mechanism that our regulators and the Treasury have been able to take the action we have taken over the weekend.
I think the hon. Lady understands the disruption and volatility in the sector, but she should be reassured that the Governor of the Bank of England has confirmed that this is not indicative of systemic risk. I can confirm that, in order that the Silicon Valley Bank, now within HSBC, can provide the broad range of services that our life sciences and tech sector value so much, the exemption from the ring-fencing requirements will be permanent.
The hon. Lady asked about a systemic review. Of course, these are always opportunities for us to learn and look again, but, as I said in my opening remarks, the system has worked as intended.
Finally, and with the greatest of respect, we on the Conservative side of the House need no lessons on patient capital. We are unlocking capital for our important tech and life sciences. Only last week, the Under-Secretary of State for Pensions, my hon. Friend the Member for Sevenoaks (Laura Trott), brought to this House regulations to remove the charge cap and to allow our pension funds to invest in some of the fastest-growing sectors of our economy.
Stewart Hosie (Dundee East) (SNP)
One of the key lessons of the 2008-09 financial crash was that the conduct of business and liquidity issues could very quickly morph into systemic risk with contagion across a variety of transmission channels, so I very much welcome the speedy way in which the SVB UK issue was resolved over the weekend. However, that bank’s business model—and it is not alone—involved it holding a large number of low-interest-bearing bonds at a time of rising bond yields. It was required to sell those at a loss, which exacerbated the liquidity problems that it had. Would it not be prudent now to ensure that our regulators have another look at UK banks to ensure that comparable low-interest-bearing assets are stringently priced and marked to market to ensure that tier 1 capital is just that, and of sufficient quantity and quality that any liquidity problem does not morph into an insolvency and system risk problem?
Andrew Griffith
I thank the right hon. Gentleman for his recognition of the speed and decisiveness with which the whole Government have come together, worked together and acted to deliver this outcome—that is kind of him and it is appreciated. If I may, we should not conflate some of what we read about the balance sheet in the US with the regulated balance sheet in the UK, which was a separately regulated balance sheet. Again, on the business model in the UK and the backing, and the bonds and collateral that were being held, I am not aware that their forced sale, and the losses on it, were a contributory factor. The reality is that we saw a withdrawal of deposits. The Bank had the ability, because of the relatively ringfenced balance sheet, to protect the bank and take the necessary action. Had the Bank not done so, we could have been in a very different situation, so we were right to act as we did.
Digital Pound
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 2 months ago)
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The Economic Secretary to the Treasury (Andrew Griffith)
Before I give my statement, may I add my voice to those in the previous statement on the Turkey and Syria earthquake? My heart goes out to all the people affected by that.
With permission, Mr Speaker, I will make a statement about the steps the Government are taking to consider the future role of a potential digital pound. His Majesty’s Treasury is today publishing and laying in Parliament a consultation paper jointly with the Bank of England, “The digital pound: a new form of money for households and businesses?”. This paper aims to open a national conversation about the future of money in the United Kingdom.
The way money is used in the UK is changing, as it is across the world. Cash will remain important, but banknotes, issued by the Bank of England, are being used less frequently by households and businesses. New technologies are allowing for the emergence of new forms of digital money, and new ways and devices to pay for goods and services with it. International developments have the potential to affect the UK domestically and our position as a global leader in finance. Ensuring that public trust in money remains high, and that forms of money and payments meet the evolving needs of individuals and businesses, are fundamental responsibilities of the Government on which Parliament must have its say.
We are determined that the UK should remain at the forefront of innovation in money, payments and financial services. This is part of the Government’s vision for a technologically advanced, sustainable and open financial services sector—a sector that is globally competitive and acts in the interests of communities and citizens, creating jobs, supporting businesses and powering growth across all parts of the UK.
A UK digital pound would be a new form of digital money for use by households and businesses for their everyday payment needs. The digital pound would be a new form of sterling, similar to a digital banknote and issued by the Bank of England. For people and businesses, the experience of using a digital pound would be very similar to using other forms of digital money. For example, it would be accessible online via smartphones and computers, as well as through cards that could be used at point-of-sale terminals.
I want to be clear that the Government are legislating to protect access to cash and ensuring that the UK’s cash infrastructure remains sustainable long term. Therefore, as part of the wider landscape of money and payments, the digital pound would sit alongside, and not replace, cash —a digital counterpart to familiar, trusted banknotes and coins, and subject to rigorous standards of privacy and data protection. It would be denominated in sterling, and digital pounds would always have the same value as, and be interchangeable with, the equivalent physical banknote. Unlike cryptoassets and stable coins, the digital pound would be a central bank digital currency; sterling currency issued by the Bank of England, not the private sector.
A digital pound would help to ensure that money issued by the central bank—which is currently available only as cash—remains available and useful in an ever more digital economy. Knowing that there is an ultimate backstop to convert our money—money in our bank or e-money account—into cash or a CBDC at any time is the foundation of confidence in all forms of money, both day to day and in a crisis.
As cash is less and less used, the importance of a digital pound to provide that constant access to Bank of England-issued money could rise. It will safeguard the UK’s monetary sovereignty in a changing global financial system. It could provide a platform for private sector innovation, promoting further choice, competition, efficiency and innovation in payments.
On the basis of our work to date, the Bank of England and HM Treasury judge that it is likely that a digital pound will be needed. It is too early to commit to build the infrastructure for one, but we are convinced that further preparatory work is justified. A future digital pound would be a major piece of national infrastructure, which would take several years to complete. It would need to be safe and secure, and the legal basis for the digital pound would be determined alongside consideration of its design. Its launch would require deep public trust in this new form of money—trust that their money would remain safe, accessible and private.
The journey towards issuing any digital pound, therefore, necessarily involves an open national conversation about the future of our money, in parallel with important detailed technical consideration by experts across UK public authorities, and be informed by evolving market trends. The consultation we have published today will be open for four months. It opens that conversation and seeks to build the foundation of public trust. It sets out our vision of why a digital pound may be needed alongside our vision of how a digital pound could work, should we decide to issue one.
Like a physical banknote, no interest would be paid on the digital pound. Privacy, user control and use of data in line with UK data protection laws are of paramount importance. So I want to reassure the House that our vision for a digital pound would have the same privacy protections as bank accounts, debit cards or cheques. Neither the Government nor the Bank would have access to digital pound users’ personal data, except for law enforcement agencies under limited circumstances, prescribed by Parliament in law and on the same basis as applies to other digital payments. The digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime.
Drawing on the feedback we receive in the consultation, we are committed to move to the next phase of work. That will inform a future decision on whether to progress to building and launching a digital pound. I assure hon. and right hon. Members that a further update to Parliament will be made prior to that. It will also inform our current proposal for its form and function, decisions on which will be taken forward in the next stage. At this exciting time of change in money and payments, this consultation is a vital step in positioning the UK to act decisively, should we choose to introduce a digital pound.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 2 months ago)
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Andrew Griffith
I will be delighted to visit, and I commend the good work done by Link and the access to cash action group.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 5 months ago)
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Andrew Griffith
I will ensure that the case the hon. Lady raises is responded to.
Andrew Griffith
The Government are very conscious and very supportive of people’s desire to own their own home, which is why we have made so many interventions on affordability. Underlying that is the strength of the economy, which offers great employment prospects for those who seek to work hard, to save and, ultimately, to purchase their own home. We are on their side.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 6 months ago)
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Andrew Griffith
I think we all understand that there is a clear divide in this House. The Government are supporting growth, providing support for energy bills, giving the economy the confidence and certainty that it needs this winter, and bringing forward supply-side measures that will boost the economy, not being on the side of striking workers who are bringing this economy to a halt.
Andrew Griffith
As I have already observed, we are seeing interest rates rising in every major western economy. When Opposition Front Benchers are finished with their British exceptionalism, perhaps they will lift their eyes and notice that. What is more important is that we are protecting consumers and households through the difficult winter months ahead, and cutting taxes. Those are measures that Government Members support and Opposition Members oppose.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(1 year, 9 months ago)
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The Parliamentary Under-Secretary of State for International Trade (Andrew Griffith)
This Government continue to seek an excellent trading relationship with our former EU partners, just as we do with other international markets. Hon. Members will be pleased to note that goods exported to the EU for May 2022 were over 17% higher than the 2018 monthly average, so trade here is already increasing. To increase exports, we need to get more British businesses exporting, and to do that the Department has initiatives such as the Export Academy and the export champions scheme that help to give them the knowledge and practical help that they need.
Andrew Griffith
Education is indeed one of the great opportunities, and the lingua franca of English is one of the benefits as we seek to do trade deals not just with our friends in Europe but across the whole world. I am very happy to talk to my colleagues in the Department for Education and between us respond to the hon. Lady.
Andrew Griffith
My hon. Friend is absolutely right. He is a champion of small business in his constituency. That is why it is so important that, as we seek to do trade deals such as the comprehensive and progressive trans-Pacific partnership and those with the Gulf, India, Canada and many more, we have SME chapters and SME preference within them.
Andrew Griffith
My hon. Friend is a doughty champion for all sorts of businesses in Sedgefield, including his local farmer. I would be very happy to arrange to meet him and Billy and continue what is clearly a tradition.
Andrew Griffith
Of course, the aftermath of covid reduced trade of all kinds with every part of the world. This Government’s job was to protect businesses in the aftermath and is now to use our dedicated food and drink advisers across the Department’s offices to make sure the world understands the enormous opportunity for the high-quality produce produced not only in the hon. Member’s constituency but throughout the rest of the United Kingdom.
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(3 years, 5 months ago)
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Andrew Griffith
I thank my right hon. Friend for his answer. Many businesses in Arundel and South Downs, such as hospitality, events, beauty and wedding venues, have been hit terribly hard by the pandemic. It is no exaggeration to say that the support he has offered so far has been an absolute lifeline. But as my constituents now find themselves in tier 2, with all the uncertainty and restrictions, will he continue to do what he can to protect the very enterprises this nation will need—
Mr Speaker
Order. Questions have got to be short and punchy—that is the idea of topicals—to get everybody in.
ARM: Foreign Acquisition
Debate between Lindsay Hoyle and Andrew Griffith(3 years, 7 months ago)
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Mr Speaker
Order. It is a half-hour debate. I have not been told that you wish to speak and I am not sure whether the person who is holding the debate has either. You can intervene, but I have not been given notice of anybody else. Have you been told, Daniel Zeichner?
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(3 years, 11 months ago)
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Andrew Griffith (Arundel and South Downs) (Con)
Oral Answers to Questions
Debate between Lindsay Hoyle and Andrew Griffith(4 years, 3 months ago)
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Andrew Griffith (Arundel and South Downs) (Con)
Will the Secretary of State talk about the support that her Department is giving to quantum computing in the UK? This technology is growing at an exponential speed and opening up new opportunities in new sectors for the United Kingdom.
Mr Speaker
Just to help the new Member, his question should really be associated with the current question, so I presume that he is talking about Scotland as well.