Finance Bill

Richard Fuller Excerpts

Committee of the whole House
Wednesday 10th January 2024 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

This Government’s aim is to grow the economy for the good of everyone by removing barriers to private sector investment and delivering a tax system that is supportive of business. At the spring Budget 2023, the Chancellor set out his approach for a highly competitive tax regime. By announcing a package of generous tax incentives, combined with a rate of corporation tax that remains the lowest in the G7, this Government have ensured that the UK continues to be one of the best places in the world for businesses to grow and invest.

The Bill marks our next step in making the UK one of the most competitive tax systems among major economies by enhancing the support that the corporation tax system provides to businesses that drive growth by making long-term investments. It meets the Government’s commitment to introduce permanent full expensing, as announced at the autumn statement, solidifying our international competitiveness and creating the certainty that businesses have told us they need in order to confidently invest. The Bill will also drive UK business innovation by merging the existing research and development expenditure credit scheme with the small and medium enterprise scheme. Merging those schemes will simplify and improve the system for supporting cutting-edge research and development.

Turning first to clause 1, at spring Budget 2023, the Government introduced two new temporary first-year capital allowances for qualifying expenditure on plant or machinery. The first was a 100% first-year allowance for so-called main rate expenditure, known as full expensing, which allows companies to write off the full cost of plant and machinery in the year that the cost is incurred. The second was a 50% first-year allowance for expenditure on special-rate assets such as lighting systems, thermal insulation and long-life assets, allowing companies to write off half the cost of an asset in the year that it is incurred, with the remaining balance written down at 6% in every year afterwards.

The Chancellor was clear that his long-term ambition was to make those new reliefs permanent once the fiscal and economic conditions allowed, and at the autumn statement he confirmed that he was able to do just that. Clause 1 delivers that ambition, making both full expensing and the 50% first-year allowance permanent by removing the end date of 31 March 2026. That means that companies will be able to permanently benefit from full expensing. It solidifies our position as joint top of the rankings of OECD countries with regard to plant and machinery capital allowances, and means we are the only major economy with permanent full expensing.

The change will give companies the certainty they need to make long-term investments, and responds to calls from the CBI, Make UK, Energy UK and 200 other business groups and leaders, and from companies including BT Openreach, Siemens and Bosch, which have said that making the policy permanent would be the single most transformational thing the Government could do for business investment and growth. According to the Office for Budget Responsibility, it will generate almost £3 billion of additional business investment each year and £14 billion over the course of the next five years. The forecast is that GDP will be 0.1% higher by the end of the forecast period and slightly below 0.2% higher in the long term as a result.

[Richard Fuller (North East Bedfordshire) (Con)]

I applaud the Government’s initiative to make full expensing permanent, but of course we know there will be a general election within the next 12 months. Has my hon. Friend heard from the Opposition whether, if they were to be in Government, they would maintain it?

[Nigel Huddleston]

My hon. Friend is incredibly knowledgeable about this area through some of his previous business and ministerial experience, and that is a question I am intrigued to hear answered by the Opposition shortly. I believe it is vitally important, because the whole point is to give businesses the confidence to invest in the long term, and certainty is key to the investment decisions being made.

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[Richard Fuller]

Further to that point, does my hon. Friend not think, as I do, that it is an aspect of a responsible Opposition to be clear, right now as we are debating this in this House, what they would do were they to be in Government?

[Nigel Huddleston]

I think my hon. Friend is kicking off what is likely to be a long debate over the course of the next year, but an important one for our constituents and businesses. The economy will play a pivotal part in discussions this year. It is very clear what we are doing: we are implementing vital changes, asked for by business and in response to business, to provide that business certainty and an environment in which they and therefore our constituents can thrive. I do not think any of us want to put that at risk. However, without the clarification and confidence from the Opposition about what they might do, these issues will be raised and the uncertainty can persist. We on the Government side of the House are committed to this, and my hon. Friend is right to make that clear.

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[James Murray (Ealing North) (Lab/Co-op)]

Let me start by briefly considering the context in which we are debating clauses 1 and 2. As we know, the Bill follows the Chancellor’s statement on 22 November last year, in which he claimed that he was delivering an “autumn statement for growth”. As the Committee may remember, the Office for Budget Responsibility confirmed on the same day that growth forecasts had been cut by more than half for the coming year, cut again for the year after that, and cut yet again for the year after that. Independent analysts confirmed that, even after all the changes the Government had announced, personal taxes would still rise. In fact, personal taxes are now set to rise by £1,200 per household by 2028-29, with the tax burden on track to be the highest since the second world war. Despite people across the country paying so much in tax, public services are collapsing, the NHS is on its knees, and more and more families are struggling to make ends meet.

That was the context in which we considered the Bill on Second Reading just before Christmas: 13 years of Conservative economic failure had left people across Britain worse off. The only thing to have changed since then is that we now face 14 years of Conservative economic failure. It may be a new year, but those in the governing party face the same cold truth: nothing they can say or do now can repair the damage that they have done to our economy.

People in businesses across Britain deserve so much better. As a foundation of better management of the economy, our country needs and deserves stability, certainty and a long-term plan. It is for that reason that, although we welcome the fact that clause 1 makes full expensing permanent, which we have long called for, it simply cannot make up for the years of uncertainty that businesses have faced. Businesses need stability and predictability to help them plan for growth, and their long-term planning has been held back because the Government have been chopping and changing business taxes and reliefs year after year, with no evidence of anything resembling a long-term strategy.

[Richard Fuller]

I was very pleased to hear the shadow Minister say that the Opposition welcome the full expensing. That helps, but maybe he can go further to clarify. In new clause 6, tabled in his name, the Opposition are calling for a review of all business taxes and reliefs, which would include full expensing. He will know, as will the hon. Member for Mid Bedfordshire (Alistair Strathern) who is sitting behind him, that there is a particular potential investment decision in our county. Will the shadow Minister make it explicit that the Labour party’s intention is to include in its manifesto for the next election a commitment to maintaining full expensing?

[James Murray]

As I have said, we have long been calling for full expensing, and we welcome the fact that it is being made permanent. I do not mean to sound jokey in my response—I am deadly serious when I say this—but if the hon. Gentleman wants to know what a Labour Government would do if we got into office, there is one way to see that eventuality come about: we could have a general election sooner rather than later, instead of dragging things on throughout the course of 2024.

Frankly, the country needs to move on from the current Government. Just look at their record on capital allowances since the last general election. The hon. Member for North East Bedfordshire (Richard Fuller) spoke about certainty and the need for stability, but let us look at the changes that have happened to capital allowances over the past four or five years. As I mentioned on Second Reading, back at the beginning of this Parliament, the annual investment had been raised to £1 million on a temporary basis. That temporary basis was extended by the Finance Act 2021, extended again by the Finance Act 2022, and then made permanent by the Finance (No. 2) Act 2023. Meanwhile, over the course of this Parliament, the super-deduction came and went entirely. Last year, full expensing for expenditure on plant or machinery was introduced but only on a temporary basis for three years.

Now, of course, Treasury Ministers are amending what their predecessors announced last year by making full expensing permanent. Although we welcome that policy, I wonder how long it will last. Frankly, I wonder how long any policy can be expected to last under this Government, when they are led—in the loosest possible sense of that word—by such a weak Prime Minister. If we accept clause 1 at face value, we welcome its principle of making full expensing permanent, as that is something that we have long called for. I will focus the rest of my questions on some of the specifics of the Government’s approach.

As ever, I am grateful to the excellent team at the Chartered Institute of Taxation for all their thoughts on the detail of what the Government have proposed in this clause and others. I know that one matter of interest to the chartered institute was the fact that, at the autumn statement, the Government said that they would publish a technical consultation on leased assets. I would be grateful if the Minister told us when that will be published.

Furthermore, both the Chartered Institute of Taxation and the Association of Taxation Technicians—to which I am also grateful for its thoughts on the detail of the Bill—have queried which companies and assets are eligible for full expensing. I would be grateful if the Minister clarified which assets are outside the scope of full expensing, and whether the Treasury will publish a detailed list of what does and does not count as plant and machinery. I would also be grateful if he told us how many firms will not be eligible for full expensing because they are partnerships. I know that many who take an interest in this matter would welcome clarity on that.

In clause 2, the Government propose changes to the system of tax credits for research and development. As with their approach to business taxation and capital allowances, the Government have failed to deliver any sense of stability when it comes to R&D tax credits, despite certainty and predictability being so crucial to businesses that are making investment decisions. That much is clear when looking at the list of changes that we have debated in Finance Bills over the course of the current Parliament alone: the Finance Act 2020 changed the rate of R&D expenditure credit; the Finance Act 2021 changed how much R&D tax relief small and medium-sized enterprises could claim; the Finance Act 2023 again changed the rates of R&D tax relief; the Finance (No. 2) Act 2023 changed further how the relief operates; and now, the Finance Bill before us changes the system of reliefs yet again. We accept, of course, that some change is necessary and important to enable legislation to function well, but that does not seem to be what we have seen. What we have seen is a Government incapable of providing stability, predictability, and the long-term plan that businesses need to invest and grow. It is clear that after 14 years in office, the Conservatives are incapable of providing that crucial foundation for our economic success.

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As I have made clear, we will not be opposing the clauses being considered in this debate, but I look forward to the Minister’s response to the detailed questions that I have raised in relation to them.

[Richard Fuller]

I wish to raise just a couple of points. Let me turn to the issues of pillar 2 and the moving forward of the Government’s policy on that in clause 21 and schedule 12. Obviously, that relates to changing the decision maker on the taxation rates for multinationals operating in this country from the British Government, elected by the British people, to the determinations of an international organisation through treaty.

As we move forward, it is important to be aware of the changing context. Hon. Members, particularly those from the Conservative Benches, have raised in the past the issue of who else is coming along to this particular minimum tax global party. We already know that China, one of the major economic actors in the world, is not part of the OECD, will not be complying with us and will not be part of these regulations. First, I am interested in any updates the Minister may have on those views about China. Secondly, it is clear that there will be an election in the United States later this year and that there is a significant difference in opinion between the Republican party and the Democrats about whether they will enact the US’s part in the taxation policies of pillars 1 and 2—particularly in pillar 2. Given that there is a reasonable chance—some say it is better than a 50:50 chance—that there may be a change in Administration in November and the United States could then withdraw from participation in the OECD process, can the Minister, in his summing up, give some reassurance to those Conservative Members who, although always supportive of the Prime Minister, may just want to make sure that we have clarity on what we would do in the eventuality that neither of the two major economies in the world—the United States and China—are taking part in this particular global minimum tax from multinationals.

I would also be interested to hear from the Minister—perhaps not from the Dispatch Box today, but separately with the taxation Minister—where the definition of certain words is moving in the Treasury and HMRC when it comes to tax avoidance and tax evasion. I recall that, many years ago, the difference was that tax evasion was illegal and that tax avoidance, while perhaps not what the HMRC wanted to happen, was legal. We see in the Finance Bill references to tax avoidance that imply that it is illegal. I worry that there is insufficient clarity, from HMRC’s perspective, on the difference between tax evasion, which is illegal, and tax avoidance, which is legal but perhaps not desirable. Perhaps the Minister could give some clarity on that.

All those on the Treasury Bench will be aware of the persistence of the concerns about the loan charge and other aspects of tax avoidance schemes, which HMRC has gone to court over, winning in certain actions and then deciding to apply blanket solutions to cases where there has never been a finding of fact in a court regarding the particular schemes. My specific question—I hope that this is within scope, Dame Rosie; you will tell me if it is not—is why we have not brought HMRC’s approach on tackling the loan charge to a conclusion. People have been pursued for far too long in an area that is far too grey. It would be interesting if the Minister had an update on that.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 19th December 2023 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

Will the Chancellor update the House on how he plans to move forward with some of the key recommendations from Lord Harrington’s review into foreign direct investment in the UK?

[Jeremy Hunt]

I am happy to do that. In fact, I hosted a reception for Lord Harrington and the people responsible for that review last week. We will start by increasing the budget of the Office for Investment so that it can give a more bespoke service to potential overseas investors.

Autumn Statement Resolutions

Richard Fuller Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

You tempt me in the wrong direction, Madam Deputy Speaker. I am sure that, in a few minutes, those on the Government Front Bench will wish that I had had fewer minutes.

It is a great pleasure to follow the right hon. Member for East Antrim (Sammy Wilson). He always speaks a lot of sense in the House, and I listened with interest to what he said. It is also a pleasure to welcome the Economic Secretary to the Treasury, my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami), to his place. I am sure he will do a fantastic job in the Treasury, as will the rest of the team.

I congratulate the Chancellor, because at the start of this debate the Opposition were struggling to have anything to say about what was in his statement. They talked about things that the Chancellor was not doing, and then they tried desperately not to sound too enthusiastic about the things that he was doing. That is part of the success of the Chancellor’s statement. I therefore congratulate him on making a reasonable and good start, but we have a very long way to go to get back to Conservative principles in public financing.

I want to draw attention to three charts that the Institute for Fiscal Studies prepared. The first shows public spending increases in real terms, going back all the way to 1985-86. As one gets older, one likes looking at longer-term trends in things. The chart shows that in this Parliament there was a significant increase in public expenditure in two fiscal years. As Ministers have said, those were caused by exceptional items: the covid response and the consequences of Russia’s invasion of Ukraine.

Those one-off increases should have been followed by significant real reductions in public expenditure, to get it back to where it was. If we have real increases, we are then at a higher level, and we get back to where we were before the one-offs only if we have real reductions. There was nothing in the announcements today that indicated that the Government have got to grips with that essential point about public spending.

The second chart from the IFS looks at tax rises across Parliaments. I do not want to get into the nitty-gritty, although it is true that, at the moment, this is the largest tax-raising Parliament of any, and that will be extremely difficult for me to explain to my constituents, but if we look over the longer term, four of the six Parliaments from 1970 to 1997 were tax-cutting Parliaments, and only two were tax-increasing. Of the seven Parliaments since 1997, five have increased taxes and only two have reduced them. We have a political-class problem: whichever party is in power, we are biased towards increasing the burden on taxpayers to increase the state. That is not a Conservative approach to the economy.

Thirdly, the IFS looked at the proportion of taxpayers now captured in the higher and additional rate. Lots of sensible words have been said by Members in all parts of the House about thresholds and the drag. When this rate was brought in, 4% of adults paid that higher rate. With measures not reversed today—it is important that we say to the Treasury, “You did not reverse this today”—that number will rise to 16% by 2027-28. That is not 16% of taxpayers, but 16% of all adults and so it includes people who are not working and it includes pensioners. The actual number will be nearly one in four taxpayers paying the higher rate of tax. That is not a Conservative way to run the economy.

There are some specific hopes in what the Government have put in. I particularly welcome some of the measures, including those set out in paragraphs 5.95, 5.96 and 5.97 in the Green Book, which form part of the Chancellor’s 110 measures. They seek to strengthen economic regulation and impose, or introduce, a growth duty on Ofwat, Ofcom and Ofgem. Those important measures will stimulate growth, but my point would be: is that it? Regulators cover 25% of the productive part of our economy. Members in all parts of the House have pointed out numerous times the failures of our regulators to manage their sectors effectively, be it water or energy. What on earth are the Government doing to make regulators make more effort to stimulate growth? I ask the regulators, please, not only to stick with current efforts but to do more of what they can. I know that my hon. Friend the Economic Secretary feels similarly.

The Financial Secretary is not here, but he has responsibility for His Majesty’s Revenue and Customs. The Green Book contains an interesting item at paragraph 5.57, which is heroically called:

“Investment in HMRC debt management capability”.

I have a background in venture capital and this measure, for £163 million, promises an annual return of more than £1 billion. We put £163 million of extra resources into HMRC to chase on this issue and we get £1 billion back, according to the Government’s numbers. How does that happen? It is because this measure

“will allow HMRC to better distinguish between those who can afford to settle their tax debts, but choose not to, from those who are temporarily unable to pay and need support.”

That is a massive extension of the roles and responsibility of HMRC into the personal finances or the corporate finances of small businesses. Clearly, that may be a good measure, whereby we can close the tax gap. I worry, however, that HMRC is extending itself a little too far and not focusing on the bread and butter issues, such as picking up the phone and answering the inquiries of taxpayers day to day.

The Chancellor was right to introduce productivity targets for the public, as it is clear that since the pandemic the private sector has roared ahead with productivity improvements and the public sector has done absolutely nothing to improve productivity. But why go for 0.5%? What institution cannot achieve more than a 0.5% improvement in productivity year on year? The Chancellor should look at strengthening that target. While he is at it, why does he not go through all the capital projects that do not have a positive benefit-to-cost ratio, on proper discounted cash-flow terms, and cancel the lot of them? If they are going to waste public money, let us not spend the public money in the first place.

Unlike some Opposition Members, I welcome the triple lock and the living wage increase. Those long-term Conservative policies have been put in place and year on year they have done so much to take working people and many pensioners out of poverty. Those measures are expensive for the state—of course, we need to understand that—but they are crucial parts of making our society more equal. I have one point to raise: I do not think anyone in this House is confident about introducing a regional living wage, as there are lots of problems with that. However, we must note that the living wage is rising to £11.44 and that is nearly 80% of median wages in Wales. There becomes an issue in certain regions as to whether this very strong push on the national living wage will have a distributional effect on unemployment.

Although I may not sound it, I am pleased that the Chancellor has announced these measures. It is clear we live in a world where forecasters now have the whip hand—how on earth we got here, I do not know. One year there is no headroom, but then they spin the forecast around and a year later there is. Who knows where this will end? Whatever that headroom has been, the Chancellor has pointed the ship of state in the right direction and I wish him full speed ahead.

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[Richard Fuller]

The hon. Lady is exactly right on that. We have to have the courage to understand that there are different pressures in labour markets. As we push forward the national living wage increases, we need to take those pressures into account if we are to get the right balance for employment.

[Catherine West]

As you will know with your lifetime of experience in social care and other sorts of public services, Madam Deputy Speaker, the good councils—I have to say they are mainly Labour councils—have introduced the living wage for all their contracting and subcontracting. That makes an enormous difference in the local economy. I challenge every single council to try to push for more from its procurement pound.

In the survey results from all the places that I visited over the summer with my wonderful staff and an ex-BBC journalist who helped me to get the survey right, some 55% felt that their quality of life had deteriorated since the pandemic. The British Red Cross research reports “Life after lockdown” and “Lonely and left behind” found that 41% of UK adults feel lonelier since the start of the initial lockdown. Millions are going a fortnight without having a meaningful conversation. The pandemic showed the importance of tackling loneliness, and it is clear that the Government strategy on loneliness simply is not working. The Red Cross said that

“tackling loneliness should be built into Covid-19 recovery plans”,

and:

“Governments should ensure those most at risk of loneliness are able to access the mental health and emotional support they need to cope and recover from Covid-19.”

These are the very people whom the Chancellor was trying to address when he said that there were increased rates of worklessness in people over the age of 50. I am sure that access to mental health services and emotional support is very much a part of that puzzle.

As well as mental and physical health and wellbeing, we must also consider the impact that grief, bereavement and the economic struggles that people are facing have on people’s sense of wellbeing. Some 51% of respondents to my survey said that they are unable to participate in events because they are online, and that also needs to be looked at, because the digital divide is real and desperately needs to be addressed by local authorities and all Departments. Some 45% said that it was harder to see their GP than before the pandemic. Some 48% said they had experienced a reduction in NHS services, particularly in podiatry, chiropody and physio. Those are crucial services that people need to keep mobile, which reduces the cost to the NHS and the queue of people waiting for care in the NHS.

Before I conclude, I will make one point on the importance of primary care and that relationship with a GP. If individuals are not on the internet and they go to see their GP, eight minutes is not really enough. In some cases, they are not even getting eight minutes every six months. So many people are living without seeing a human being day-to-day. For 13 years now, social care has lacked the funding and attention that it deserves, with £8 billion lost from adult social care budgets. In my constituency, I hear from residents having to pay thousands of pounds for their care or care for a loved one. There are high levels of unmet or under-met care needs. The Association of Directors of Adult Social Services estimated that around 246,000 people were waiting for a care assessment in August 2022.

The final finding from my survey is that 60% of the people I spoke to in all different sorts of care settings said that they felt lonely or isolated, and 34% rarely had visitors. The loneliness strategy simply is not working. It is having a real effect on our economy and on our older folk. I hope that can be addressed as this debate goes forward.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 14th November 2023 Commons Chamber

[Nigel Huddleston]

We appreciate the support for taking 3 million of the lowest-paid people out of paying income tax altogether since 2010—an important and significant change. I understand the hon. Gentleman’s comments, but I cannot comment further, especially this close to a fiscal event.

[Richard Fuller (North East Bedfordshire) (Con)]

I welcome my hon. Friend to his new post. Does he share with me the humour that Opposition Back Benchers have proposals for new taxation that the Opposition Front Benchers are trying to bat away, while those of us on the Government Back Benches are telling the Government to cut taxes, and our Front Benchers keep batting that away?

[Nigel Huddleston]

I thank my hon. Friend for his comments. I am afraid that what we are probably seeing is “same old Labour”—we have heard this all before. What they are proposing did not work in the ’70s and it will not work now. We are very proud of our tax record, particularly taking the lowest paid out of income tax.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 5th September 2023 Commons Chamber

[Gareth Davies]

Let me welcome my hon. Friend to his place. He has wasted no time whatsoever in advocating for his constituents against a Labour tax that is hitting households and businesses in his constituency and throughout the south-east. It is a massive tax bombshell at a time when families just do not need it. It is simply not right, and we would urge the Leader of the Opposition to tell his Mayor of London to stop it.

[Richard Fuller (North East Bedfordshire) (Con)]

The shadow Chancellor has said that she will not rule out mandating the use of pension fund money for the pet schemes that the Labour party thinks will achieve net zero, putting at risk the savings of many pensioners in this country. What does my hon. Friend think the impact of that will be on the British economy?

[Gareth Davies]

Pension funds have a fiduciary responsibility to deliver a financial return but also to be mindful of the values of their pensioners. I have every confidence that pension funds will continue to invest in line with the risk that is presented by climate.

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[Jeremy Hunt]

Capital spending at the Department for Education went up 16% in real terms in that review. Is the difference not that, with the fastest recovery in Europe, the Conservatives build an economy that can pay for our schools and hospitals, and Labour runs out of money?

[Richard Fuller (North East Bedfordshire) (Con)]

T2. For months, we have had the Labour economics team running down British businesses, berating them for not growing fast enough and ignoring the fact that the OECD shows that the British economy has grown faster since 2010 than Germany, Italy, Spain or France. With the recently announced Office for National Statistics upgrade that the Chancellor just referred to, what is his more hopeful message to British businesses?

[Jeremy Hunt]

It is very simply this: since 2010, we have become the strongest economy in Europe in film and television, life sciences and technology, and the opportunities are great with a Conservative Government.

Public Sector Pay

Richard Fuller Excerpts

Thursday 13th July 2023 Commons Chamber

[John Glen]

I thank the hon. Gentleman for his questions. I think we can agree to disagree on some of that. What we have to understand is that if we look at the growth levels over the past two years in the G7, this economy and this country have performed well. He makes a number of points. People are getting weary of this constant refrain around Brexit. There are people who voted for Brexit and people who did not; it has happened, and we will now take every step we can to maximise the benefits and opportunities and the greater discretion that we have consequential of that decision.

With respect to the specific questions about visa fees, I am sure that my colleagues in the Home Office will publish those in due course. This is a carefully calibrated decision; it is not motivated by political dogma. It is a clear decision to take necessary steps to avoid additional borrowing, and to meet the outcomes and the numbers that derive from the PRBs, which give evidence-based advice to the Government. This is a careful set of judgments. Clearly they will not please everyone, but we have to make decisions in the interests of the whole economy at this time.

[Richard Fuller (North East Bedfordshire) (Con)]

It was revealing that the shadow Chief Secretary, the right hon. Member for Wolverhampton South East (Mr McFadden) could not tell the House whether Labour was in favour of the pay awards or against them. Perhaps he is not sure whether Labour Members will be joining strikers who are stopping my constituents from receiving healthcare or their children from getting to school. My right hon. Friend is absolutely right that constituents have a right to expect productivity improvements to match these pay increases. Can he explain to the House a bit more about what the next steps with the productivity review will be?

Financial Services Reforms

Richard Fuller Excerpts

Tuesday 11th July 2023 Commons Chamber

[Andrew Griffith]

We have published today a consultation, and I hope the hon. Lady will feel that she can raise points during that. My hon. Friend the Minister responsible for pensions will always be happy to undertake engagement with the sector. Needless to say, we believe that we have the right balance of risk. The hon. Lady talks about volatility in the gilt market. That is one of the reasons we are so focused on not making unfunded spending commitments. The last thing that pensioners or the wider economy need is Labour’s £28 billion unfunded spending plans.

[Richard Fuller (North East Bedfordshire) (Con)]

I welcome the announcement of these reforms, but will the Chancellor and the Minister look further at two consequential areas? First, to make the most of the newly available capital, this country needs to attract the world’s best innovators, insurgents and entrepreneurs. The Labour party has already said that it does not want them here and will change tax policy to make sure they look to other countries. This Government need to come forward with measures that say, “We want the best and the brightest to come to the UK.”

Secondly, to make the most of these reforms, we need to ensure that our businesses can work speedily and with clarity. That means that regulators need to focus on what our companies are doing with these reforms, as well as protecting customers and consumers. Will my hon. Friend look at what further measures we can take on regulatory reform?

[Andrew Griffith]

The work of regulatory reform to make this country globally competitive and an attractive place to invest is never done, as my hon. Friend knows. He will also know that we are seeing right now the fruits of the Prime Minister’s vision and strategy, with firms such as OpenAI and Andreessen Horowitz—two of the leading technology firms changing our world—both choosing in recent weeks the United Kingdom out of the entire rest of the world as the place to do business.

Mortgage and Rental Costs

Richard Fuller Excerpts

Tuesday 27th June 2023 Commons Chamber

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I thank everyone who has contributed to this afternoon’s debate. I cannot help noticing that the vast majority of them are Opposition Members, so I thank my hon. Friends the Members for Halton (Derek Twigg), for Bootle (Peter Dowd), for Bradford West (Naz Shah), for Harrow West (Gareth Thomas), for Dulwich and West Norwood (Helen Hayes), for Birmingham, Hall Green (Tahir Ali), for Battersea (Marsha De Cordova), for Merthyr Tydfil and Rhymney (Gerald Jones), for Blackburn (Kate Hollern), for Newport West (Ruth Jones), for Reading East (Matt Rodda) and for Stockton North (Alex Cunningham).

We did hear a couple of speeches from Conservative Members. I thank the hon. Member for Stourbridge (Suzanne Webb) for her speech, but she forgot something. She forgot to tell us that 9,000 households in Stourbridge are going to be facing an increase of £2,400 a year in their mortgage payments. She was followed by the hon. Member for North West Norfolk (James Wild), and he forgot something too. He forgot to tell us that 8,000 households in his constituency are facing an increase in mortgage payments of £2,800 a year because of the Tory mortgage bombshell. Just in case it slips the Minister’s mind when he stands up to make his own speech, he should tell us that 10,500 households in Arundel and South Downs will be facing increases of £5,200 a year. Those figures show the level of pain among mortgage holders and that will only grow in the coming months.

We should remember that those who have bought their own homes have done nothing wrong. They have done what generations did before them: they have worked hard, saved for a deposit and taken pride in having a home of their own. The security that comes with that has for many turned to dread, as month after month they receive a letter from their lender telling them that their bills are going up by hundreds of pounds a month. In my constituency, 6,800 households face paying an extra £1,800 a year for their mortgage, and that comes on top of the extra that people are already paying for energy, food and everything else.

The Resolution Foundation says that the average figure across the country is £2,900 a year more, but we must remember that that is an average. Depending on where someone lives—we have heard this through the debate—the real figure could be higher. In Uxbridge, for example, it is £5,200 a year. In Selby, it is £2,700 a year. And it is not just mortgage holders who are affected, but renters too, because the people they rent from are seeing their mortgages rise as well. Last year, private sector rents rose by more than 10%, and the proportion of people’s income being used to pay rent is rising too.

The inflation and interest rate figures we saw last week showed an economy and a plan that has been blown off course, because this was not the plan that the Prime Minister and the Chancellor had—this is not how it was supposed to be. Their plan was to bury last year’s disastrous Tory mini-Budget under 10 feet of concrete. If it was to be remembered at all, it was supposed to be thought of as a bad dream, from which we had all mercifully woken up, but their preference was for it never to be spoken of again. Their hope was that they would steady the ship, possibly get some small amount of economic growth and then offer tax cuts either this autumn or next spring, after which a general election would be called.

After 13 years of policy failure, that was all they had left. They certainly could not run on their record, because nothing is working better now than it was when they inherited it in 2010. They certainly could not run on hope for the future, precisely because their record is so poor and no one would believe them. But even the plan they had has turned to dust, because reality has intervened—their own economic mismanagement has intervened. Their plan turned to dust because the Tory mini-Budget was not the end of something; it was the start of something. The instability that it created has carried on and on, and the price is still being paid. The Prime Minister set out a target to halve inflation, but last week core inflation went up, not down. Once again, it was higher than expected and, once again, it was the highest in the G7.

[Richard Fuller (North East Bedfordshire) (Con)]

I am grateful to the right hon. Gentleman for giving way. What is the Labour party’s view on forecasting and the Bank of England? It would be interesting to hear that, because it has been commented that forecasting by the Bank of England is not as accurate as forecasting in other countries, meaning that it is not as easy for outside investors to predict future interest rates. What is the Labour party’s view on that and, in particular, what is its view on requiring the Monetary Policy Committee in the UK to do a dot plot on future interest rates, as Federal Reserve governors do, to help with any confusion about forecasts?

[Mr McFadden]

We are not going to join the chorus of Government Members attacking the Bank of England. I thought the hon. Gentleman was rising to raise the issue of the 15,000 households in his constituency that are facing an increase in mortgage payments of more than £3,000 a year.

We all wanted to see a recovery, but we do not have a recovery. We have deepening financial difficulties for millions of households. The Government were desperate to say that the worst was over, but for anyone remortgaging over the next couple of years, the worst is not over—it is still to come. Most people on fixed rates have not refinanced yet, and the rolling financial thunder of mortgage renewals will continue month by month, as households receive those letters from their banks and building societies. That is the reality of the Tory mortgage bombshell.

The Chancellor and the Prime Minister were supposed to be the fix-it crew, but things have not been fixed at all. Borrowing costs are even higher now than in the wake of the disastrous Tory mini-Budget last year. Let me be clear with Treasury Ministers: if they are doing worse than the last Prime Minister and the last Chancellor, they are not fixing anything. That begs the question, what is the point of them? They have nothing left to offer. They are caught between telling the country not to risk it with Labour, with their little dossiers full of made-up pledges, and then adopting pale imitations of our policies, whether on the windfall tax, the NHS staffing plan or the voluntary mortgage proposals that they announced on Friday. Time after time, they have no ideas of their own; all they have left is a pale imitation of what we have already proposed.

We wanted a mandatory plan, and that is what is at the heart of our motion today. The truth is that the Tory party has shredded its own economic credentials—the Tory party of sound money, which saw debt top 100% of GDP last week; the Tory party of low taxes, which has lifted the tax burden to the highest level in living memory. There is literally no point to this Government. They are running out of options and they are running out of road.

We are not speculating about what might happen in the future. We are talking about a real crisis, with a real cost of living squeeze on real people, right now, and it has all happened on their watch. After 13 years, they have run out of excuses and run out of people to blame. From Brussels to the blob and now the Bank of England, there are no scapegoats left. Their sense of entitlement to rule is matched only by their total unwillingness to accept any responsibility for anything that happens while they do rule. The Prime Minister says he is “on it”. What a reassurance to working people! I do not know what he is on—usually, a helicopter—but I know it is not working.

The Government cannot fix the problem, because they are the problem. The answer for the country is not another iteration of a Tory project that has already failed over and over again. It has failed on the cost of living crisis. It has failed on public services. And it is failing on mortgages, too. It is time for change, but the Tories cannot offer it. It is time for recovery, but they have failed to deliver it. It is time for an election and a new start, and the sooner they come, the better.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 20th June 2023 Commons Chamber

[Andrew Griffith]

Not for the first time, the Chair of the Treasury Committee is on the money in her understanding of what is driving the markets, and in her advocacy and championing of the fact that our lending banks need to do a good job not just for mortgage holders, but also for savers. I am happy to meet her to talk about how we can ensure that they do the best job they can.

[Richard Fuller (North East Bedfordshire) (Con)]

In his earlier reply the Minister talked about mortgages in the United States. He will know that in the United States it is common to fix a mortgage for 15 or 30 years, which gives certainty about monthly repayments and can of course be refinanced if mortgage rates go down over the term of the mortgage. I understand that the UK Treasury looked at the UK mortgage markets and at introducing long-term fixed rates, and found that at that time there was not much potential. Will he consider looking at that again?

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 9th May 2023 Commons Chamber

[John Glen]

I am sorry, I cannot answer that question. But I am happy to meet the hon. Gentleman to look at the serious matter he has raised and get an answer for him.

[Richard Fuller (North East Bedfordshire) (Con)]

The Chief Secretary to the Treasury knows that the long hidden business case for East West Rail represents a bad deal for taxpayers, and that MPs from across Parliament have written about greener, better alternatives for growth in the Ox-Cam arc. He will know that on Thursday the Conservatives won the mayoralty in Bedford for the first time because the Conservative candidate, Tom Wootton, called for a review of Bedford Council’s working and its support for East West Rail. Will my right hon. Friend meet me to discuss that further urgently?

[John Glen]

I would be happy to meet my hon. Friend, and congratulate the Mayor of his home town of Bedford for the success he had last week.