Rishi Sunak
Main Page: Rishi Sunak (Conservative - Richmond (Yorks))Department Debates - View all Rishi Sunak's debates with the HM Treasury
(1 year, 10 months ago)
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Stephen Farry (North Down) (Alliance)
The Chancellor of the Exchequer (Rishi Sunak)
The UK Government are providing £37 billion-worth of support to help families with the cost of living, and most of that support is being provided directly to households across the United Kingdom. Indeed, we are legislating to ensure that our one-off payments to those on welfare that are worth up to £650 can be paid directly to households and families in Northern Ireland.
Stephen Farry
As the Chancellor will be aware, the energy bill support scheme cannot currently be extended to Northern Ireland due to the absence of the Northern Ireland Executive, so can he update the House on what steps he is taking to put in place measures to ensure that the people of Northern Ireland can avail themselves of that support? I appreciate that it is not due until October, but there is a long lead-in time required in that respect.
Rishi Sunak
I can assure the hon. Gentleman that we want to ensure that equivalent support is provided to all Northern Irish families, and that it will be of the same value. We are currently in discussions with a variety of organisations to see how best to deliver that support, but I can give him the reassurance that it will be there in the same quantity, in the same value and at the same time.
Theresa Villiers (Chipping Barnet) (Con)
The combined impacts of the £37 billion package that my right hon. Friend has referred to, plus tax reductions such as the cut in fuel duty, are providing really significant support to people in Northern Ireland. Does he agree that that is an illustration of why people in Northern Ireland are better off as a result of the Union and of the fact that we are stronger together as a group of four nations?
Rishi Sunak
My right hon. Friend speaks with authority and experience on this topic, and of course she is absolutely right: the UK Government are ensuring that families across the United Kingdom are benefiting from the support we are putting in place. More broadly, we will do everything we can in government to protect and support the United Kingdom.
Sammy Wilson (East Antrim) (DUP)
Many of the fiscal levers the Government could use to support Northern Ireland are not available, because we are under the EU VAT regime and still subject to EU state aid rules, which would rule out many of the measures the Government would take. Is that not a reason why the Northern Ireland Protocol Bill that is going through the House of Commons is essential, in order to enable the Government to use fiscal levers across the whole UK to benefit all of the people, be they Unionists, nationalists or any others in Northern Ireland?
Rishi Sunak
The right hon. Gentleman makes an excellent point. As I said from this Dispatch Box at the time of the spring statement, we were unable to extend our VAT cut on energy-saving materials to Northern Ireland because of some of the provisions in the protocol. He will know that the legislation we have put before this House, which I am glad received support last night, will address exactly those issues.
Saqib Bhatti (Meriden) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
We are not immune to the global inflationary shocks that many countries are experiencing. Indeed, eurozone inflation is north of 8%, and inflation in the United States is closer to 9%. We have the determination we need to combat inflation and reduce prices, and we have the tools at our disposal, namely strong and forceful monetary policy, responsible fiscal policy and supply-side reforms.
Mr Mark Harper (Forest of Dean) (Con)
One of the really insidious effects of inflation is that it imposes more costs on the poorest in society. What steps will the Chancellor take to make sure not just that we protect people today, but that inflation expectations are not locked in, locking in high inflation for the future, which would be the worst thing we could do for the poorest in our society?
Rishi Sunak
As ever, my right hon. Friend makes an excellent and thoughtful point. He is right about the regressive nature of inflation, which is why our recent announcements have been specifically targeted at those on the lowest incomes—the most vulnerable in our society—to help them manage through the challenging months ahead. He is also right that inflation expectations are critical, and I know that the Bank of England will act forcefully, in its words, to restrain inflation and inflation expectations, because the quicker we get through this the better for everyone, particularly the most vulnerable.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is true that inflation is affecting a number of countries, but why does the Chancellor think that the UK has the highest inflation in the G7, and why is UK economic growth forecast to be lower than in any country in the G20 next year, with the sole exception of Russia?
Rishi Sunak
When it comes to inflation, there is a variety of reasons. [Interruption.] I was very clear with the House at the time of the recent announcement that we are experiencing not only the energy shock that Europe is experiencing, but the tight labour market that the United States is experiencing. The fact that we have very many people in work and low unemployment is something to celebrate, but, obviously, that contributes to inflationary forces. Beyond that, there are smaller technical things, such as the timing of how the price cap works here and the degree of interventions in energy being upstream or downstream. When it comes to growth—we have had this debate multiple times—the Opposition seem to cherry-pick the figure that they like. Let us look at the period since the pandemic and at our growth performance. Indeed, on the OECD’s most recent figures, which the right hon. Gentleman cherry-picked, where were we in that table? We were the second highest in the G7.
Mr McFadden
The Chancellor said “celebrate”. I am not sure that there is much to celebrate in the figures that I quoted to him. Does he accept that the weakness of the pound, which increases the prices of our imports, is a major contributory factor to the inflation being experienced by our constituents, along with a continuation of the trade frictions caused by the Government’s Brexit deal? Does he have any plans to address that? I am not talking about rerunning the Brexit argument. He could take one step, which is to reach an agrifood agreement with the EU, as New Zealand has. That would reduce costs and bureaucracy for our farmers, for our businesses and, most of all, for our constituents.
Rishi Sunak
What the right hon. Gentleman said was very telling. We on the Conservative Benches do celebrate people being in work. It is critically the most important thing that we can do to help manage the cost of living, so every week in this place, we will champion those who are working and we will get others into work and support them. When it comes to the EU and our trading relationship—it is nice to hear from the Labour party that it does not want to rerun the Brexit arguments—it is very clear that there is now a growing faction on the Labour Benches that wants to do one thing and one thing only, which is to take us back into the single market.
Alison Thewliss (Glasgow Central) (SNP)
Both Labour and the Tories are Brexit parties now—a Brexit that Scotland did not vote for and wants nothing of. This year, the Scottish Government have faced more than a 5% real-terms cut in resource funding compared with last year’s Budget, and the spending review took place when inflation was at only 3.1%. It has now tripled and continues to rise. That increase will impact on Scotland’s recovery from the pandemic and place severe pressures on public services and public sector wages. Will the Chancellor increase funding to the devolved Governments in recognition of this record inflation over which he presides?
Rishi Sunak
I am so pleased to have a chance to answer Treasury orals for the first time since we saw the Scottish Government’s spending review, which was a couple weeks ago. It was interesting to read through that, because in spite of the largest increase in public spending in the United Kingdom for some decades—record increases in public spending—it is clear that the Scottish Government are now imposing austerity in local government, in education, in justice, and in the environment. All budgets are growing slower than inflation, and that is not happening elsewhere in the United Kingdom. The health budget, the people’s No. 1 priority, is now growing in England two or three times faster than it is in Scotland. Scotland is not passing on the income tax cut. We might ask: why is this? Why are these choices being made? It is because, in Scotland, the welfare budget is being increased by 50%. That is why.
Alison Thewliss
The Chancellor knows fine well that the Scottish Parliament, along with the other devolved Administrations, operates on a fixed budget. We do not have the levers that he has to increase budgets, yet we operate on that incredibly well. [Interruption.] We have a balanced budget in Scotland every year, which says a lot about the Scottish Government than his Government.
Inflation is a global problem, but individual Governments can make it easier for people to make ends meet. Ireland, for example, has cut public transport fares to allow people to save money on ticket and petrol prices, while those have soared under this Chancellor’s Administration. That is an independent country using its powers to ease the burden on commuters. The Scottish Government have already made bus travel free for under-22s, but we are at the limits of what we can do, because of that fixed budget and because of those real-term cuts to the block grant. If the Chancellor will not provide more money to the Scottish Government, will he give us the full powers so that we can do that?
Rishi Sunak
We all have to operate with fixed budgets—that is news to the hon. Lady—but there have been record Barnett settlements for Scotland of £4.5 billion a year. Beneath that, however, are the choices that Governments make. On the Conservative side of the House, we choose to support the NHS and public services; in Scotland, they are choosing to impose austerity on public services. That is the difference between us and the SNP.
Mr Richard Bacon (South Norfolk) (Con)
Following the welcome launch of Help to Build yesterday, fulfilling a commitment that the Chancellor made to me when he was still Chief Secretary to the Treasury in the early part of 2020, does he agree that making it easier for more people to commission their own houses will result in more, better, greener and cheaper houses that cost less to run, thus making a significant contribution to battling inflation?
Rishi Sunak
My hon. Friend is without doubt the House’s expert on that matter. I am pleased that the Government have listened to him. I still have the brochure he first gave me with the marvellous pictures of the custom self-build—in Switzerland, I think. There is a £1.8 billion fund, I believe, within the home building programme, and a good chunk of that will go to support exactly what he said: more homes, quicker homes and cheaper homes for all our citizens.
Dan Carden (Liverpool, Walton) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
The Government understand that many families are struggling with rising prices. That is why we have announced £37 billion-worth of support, with the bulk of that targeted on the most vulnerable in our society, and those families receiving around £1,200 of help this year.
Marsha De Cordova
The Government’s failure to increase social security benefits in line with the current rate of inflation has resulted in a real-terms cut. Many of my constituents who are in receipt of social security now face a shortfall of around 6%, based on today’s inflation rates. The Chancellor could take action now, for example by reviewing the rate of social security every six months, rather than annually in September, while we are in this cost of living emergency. Will he commit to an emergency in-year uprating in line with the rates of inflation?
Rishi Sunak
I gently point out to the hon. Lady that just a few weeks ago we announced £15 billion-worth of additional help, particularly for those on means-tested benefits, who are receiving a one-off payment of £650. The aggregate amount spent on that proposal is in fact more generous than simply uprating with inflation as she suggested, so those families will get more help under our plan than with her proposal, and that money will arrive first in July, with the second payment later in the autumn.
Joanna Cherry
The cost of living is affecting individuals and business, particularly small business, across our society. Many small cafe owners, who are important for the service sector in Edinburgh South West, are struggling. One small cafe owner wrote to me recently to say that over the past few months, every single one of her suppliers has put their prices up—from bread, to cakes, to bacon, to coffee, to waste collection and energy. My question for the Chancellor is this: is it not time that he looked at his options for further cuts to VAT to help small businesses, especially small cafes in Edinburgh South West?
Rishi Sunak
We have provided significant support to the hospitality sector over the past two years, and I am glad that the sector at least emerges from the crisis in a much stronger shape—in terms of employment, cash balances and insolvencies—than anyone had anticipated, which is something to celebrate. With regard to support at the moment, we have of course put in place a £1.7-billion business rates holiday—the 50% discount—for cafés and restaurants in England, and that money is being Barnett-ed to Scotland to provide similar support to restaurants there.
Mary Glindon
Public sector workers and care workers in North Tyneside say that the Chancellor’s package on the cost of living crisis does not address their daily financial struggles, because under his Government, their pay has not kept pace with inflation. What practical steps will he take to address that overriding problem for my constituents?
Rishi Sunak
As I said, we are providing an enormous amount of support—around £1,200—which is targeted at those who most need help. Of course, no Government can make the challenges go away completely, given the scale of the problem that we are facing, but I am confident that the support we have put in place is significant and will make a meaningful difference to those who most need it. The hon. Lady talks of the practical steps that we can all take to help with the cost of living. Perhaps her party could start by opposing the crippling rail strikes of the past week or two, which are doing nothing to ease the burdens of the cost of living on public sector workers.
Christian Wakeford
My constituents in Bury South have had inflicted on them tax and national insurance rises—the inadequate 5p cut to fuel duty barely touched the sides—by a Chancellor who has clearly run out of ideas, as we have just heard. With energy costs at record highs, and an expected further rise of up to 50% in the autumn that will mean the cap has almost trebled in under a year, what further assistance can be given to my constituents to ensure that nobody is cut off?
Rishi Sunak
I gently say to the hon. Gentleman that £37 billion of support is being targeted at the most vulnerable and will come over the next few months, from the summer through the autumn and winter, to help with the price cap. As we said, we do expect the cap to increase significantly in the autumn, which is why we have put the support in place. He talked about taxes, so he will be pleased to tell his constituents that in just a couple of weeks’ time, they will have their taxes cut when the national insurance threshold rises to £12,500, which will deliver a £330 tax cut to around 30 million people in work. That will start to put more money in people’s pay packets in July.
Mr Virendra Sharma
The tax rises that the Chancellor has introduced are making the cost of living worse for everyone. How can he defend raising taxes on working people and urging against pay rises for most people, while his colleagues recommend scrapping the cap on pay rises for FTSE 100 bosses who earn millions?
Rishi Sunak
Again, 70% of workers in this country will have a net tax cut. That is what the Government are delivering. In just a couple of weeks’ time, the first £12,500 that anyone in work earns will be free of any tax or national insurance. That will deliver a £6 billion tax cut for 30 million people. As I said, for 70% of all workers, excluding the most wealthy, it represents a net tax cut, because we are on the side of hard-working people.
Bim Afolami (Hitchin and Harpenden) (Con)
The Chancellor knows that a significant part of inflation is not within this Government’s control, and indeed not within the country’s control; it is a result of international energy costs, particularly oil and gas. That is happening globally because there is an imbalance between supply and demand across the world. What is the Treasury’s approach, working with other countries and major energy companies, to try to bring down those prices overall in the coming years? Unless we do that, increasing energy costs will be inimical to the economic growth that everybody in this House wants to see.
Rishi Sunak
My hon. Friend makes a thoughtful point, and he is right. As the Bank of England recently pointed out, the bulk of the excess inflation that we are seeing is being driven by global inflationary forces. He is also right that in the long term, the best way to combat that is to increase the supply of energy. In particular, the Prime Minister’s energy security strategy sets out a plan to do exactly that, which will have an impact on bills next year and beyond. Between now and then, we have the support in place to help people.
Mr Richard Holden (North West Durham) (Con)
We all know that energy prices, such as oil and gas prices, are being driven by Russia’s illegal invasion of Ukraine. I welcome the extra £37 billion of support for households and the cut in fuel duty. One thing that affects my constituents, particularly district nurses, is the differential between the terms and conditions for NHS workers and the normal mileage allowance, which means that an NHS district nurse in my patch doing 12,000 miles a year gets about £1,400 less than if they were on a normal mileage allowance. Will the Chancellor make representations to the Health and Social Care Secretary to try to improve that position for my district nurses?
Rishi Sunak
My hon. Friend, as always, is right on the point, and he makes a good observation. He knows from his discussions with me that the mileage allowance rates are advisory, and organisers and employers can provide whatever support they think is appropriate and justified under the circumstances. I would be happy to talk to the Health Secretary. As my hon. Friend knows, the NHS has received a record funding settlement. Where we can find efficiencies to support people, we should do so.
Philip Davies (Shipley) (Con)
Further to the question from my right hon. Friend the Member for Tatton (Esther McVey), may I urge the Chancellor to think again about the cut in fuel duty? Although the one he introduced was welcome, it has not really been noticed by many people, so will he consider a much more substantial temporary cut in fuel duty, as has been done in Germany?
Rishi Sunak
I am glad that my hon. Friend is supporting my right hon. Friend the Member for Tatton (Esther McVey). I will take all his recommendations under advisement. As my hon. Friend the Exchequer Secretary pointed out, a cut of £5 billion, together with the freezing of fuel duty, is significant, but we appreciate that that is not being felt at the pumps because of the rise in wholesale prices. I assure him that the Secretary of State for Business, Energy and Industrial Strategy is in dialogue with the Competition and Markets Authority to ensure that the fuel duty cut is being passed on.
Philip Davies (Shipley) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
In common with countries around the world, the UK is experiencing global inflationary forces. We are taking action to support the country through that, with £37 billion of support targeted at the most vulnerable, but also focused on the long term in combating inflation and reducing prices through supply-side reforms, responsible fiscal policy, and a strong and forceful independent monetary policy.
Philip Davies
Many people are grateful to the Chancellor for all the support he has given to help people with their energy bills, but many businesses are also struggling with very high energy bills. Will he consider giving further support to businesses to help them through that, preferably through cutting their taxes? It would be a tragedy if the Chancellor kept all those businesses going, at huge cost, through the pandemic, only to see them come a cropper after the pandemic because of the inflationary cost pressures caused by those lockdowns.
Rishi Sunak
My hon. Friend is a champion of all the small businesses in his constituency, and rightly so. They have endured the pandemic and are bouncing back strongly on the other side, and we want to support that. On tax cuts, I hope he can reassure his small businesses that this year they are benefiting from two specific tax cuts—a cut of about £5,000 in business rates for a typical pub; and with the increase in the employment allowance, a cut of £1,000 on national insurance contributions—and we will of course support them in the years to come.
Rachel Reeves (Leeds West) (Lab)
Consumer confidence is at its lowest level since records began because working people have less money to spend, but we are not all in this together. Pay for the top 1% of earners is increasing at 20 times the rate for the bottom 10%, and all the while the Prime Minister eyes up luxury tree houses instead of fixing the broken economy. Does the Chancellor realise that, to avoid a cost of living calamity, he must address the stagnant wage crisis created by Tory policies?
Rishi Sunak
On wage policy, this is the Government who introduced the national living wage and, this year, increased the national living wage by about £1,000 a year. Combined with the cut to the universal credit taper rate and the increase in the national insurance threshold, that is significant support to those on the lowest earnings. It is right that we increase people’s wages, but the hon. Lady should start in her own office, where, I heard, she is perhaps not quite paying her own staff properly.
Rachel Reeves
Some 4.8 million people in Britain are paid less than a real living wage. That includes cleaners, caterers and security guards employed by the Government. They work hard, they pay their taxes—in Britain, Chancellor—and they have been taken for granted for far too long. Will the Chancellor guarantee that all those who work for Government, whether directly or through a contractor, will be paid a real living wage from now on so that they can afford their bills, put food on the table and support their families?
Rishi Sunak
We want everyone to be paid the national living wage. That is the law in this country. I am proud that we have increased it by £1,000 this year, which, combined with our tax cuts, is putting more money in the pockets of the lowest paid. I say again that there are lots of people being paid less than the national living wage but they should not include people in the hon. Lady’s own office.
Martin Vickers (Cleethorpes) (Con)
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Rishi Sunak
My hon. Friend is right to highlight the need to target support on those who most need it. I am pleased to tell him that the payments will be made for those on means-tested benefits in July, with the second of those payments following a few months later, in the autumn, for those on tax credits, so that deduplication can be done.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Mel Stride (Central Devon) (Con)
Our country is facing its highest tax burden since the 1950s, although it should be acknowledged that, more recently, my right hon. Friend the Chancellor has been bringing taxes down rather than putting them up. Does he agree that, with the elevated level of inflation, now is not the time for dramatic cuts, but that once inflation starts to recede—hopefully at the end of the year or into next year—that will be the opportunity to come forward with serious tax cuts to get growth and jobs going and to support our constituents?
Rishi Sunak
I thank my right hon. Friend, the Chair of the Select Committee, for his constructive and thoughtful dialogue with me on these issues. He makes an excellent point, and I direct him to the tax plan that we published at the spring statement to indicate the direction of travel on tax. There will be tax cuts in, I think, a day’s time to help people with the cost of living, tax cuts in the autumn to drive growth in business investment and innovation, and further cuts to personal taxation thereafter, once the situation stabilises.
Barbara Keeley (Worsley and Eccles South) (Lab)
Unpaid carers have seen their bills soar during this cost of living crisis. Many carers find it impossible to reduce their energy use, because the person for whom they are caring relies on electricity to power a wheelchair, a hoist or other vital equipment, yet last month the Government decided to exclude hundreds of thousands of unpaid carers of state pension age who are not in receipt of a means-tested benefit from the £650 cost of living support package by leaving carer’s allowance out of the qualifying benefits. Will the Chancellor reconsider this unfair decision, which risks putting even more carers into financial hardship?
Rishi Sunak
The hon. Lady is right to pay tribute, as we Conservative Members do, to those who care for others. She should be reassured that of the 1 million people in receipt of carer’s allowance, 60% or more will be in a household that receives the £650 or, indeed, the disability payment. Carer’s allowance itself is not a means-tested benefit.
Peter Aldous (Waveney) (Con)
Investment in clean, low-carbon energy infrastructure will be crucial to creating long-term, rewarding jobs in coastal constituencies such as Waveney. Has my right hon. Friend carefully considered the impact that changes to tax policy on electricity generators would have on investment in the UK?