Finance (No. 2) Bill

Tulip Siddiq Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

As my hon. Friend the Member for Ealing North (James Murray) set out in his opening speech, this Finance Bill and last month’s Budget are nothing but the last gasps of a dying, desperate Government. Neither does anything to address 14 years of Conservative economic failure, and as always with this Government, it is working people who pay the price, because taxes are still rising. The British people, already facing the highest tax burden in 70 years, will see tax rises in every single year of the forecast period. As much as the Government try, they simply cannot hide from that record: after a decade and a half of Conservative rule, people have less money in their pockets.

Unable to defend his own Government’s record, and unable to offer any plan to get the country out of the economic mess that his party has created, this Chancellor has resorted to undeliverable promises. The Chancellor ended his Budget last month with a £46 billion unfunded tax plan to abolish national insurance, which would put our economic stability at risk. That is even bigger than the unfunded tax cuts announced by the right hon. Member for South West Norfolk (Elizabeth Truss) in her Budget, which added hundreds of pounds to people’s mortgages.

In contrast, the Labour party has consistently said that we would reduce the tax burden on families. That is why we opposed the current Prime Minister when he wanted to increase national insurance two years ago, and it is why we supported the measures announced last month to bring national insurance down by an additional 2p.

Although on the surface this Bill leaves the basic and higher rates of income tax unchanged, let us be clear: this is a Government who have raised the tax burden to record levels, and taxes are continuing to rise. Because of the tax choices that this Chancellor has made, households will be, on average, £870 worse off. His decision to freeze tax thresholds will create 3.2 million new taxpayers by 2028, and 2.6 million more people will be paying higher rates. For every £5 that the Government are giving back to families, they will be taking an average of £10 in higher taxes under their plans, and they expect the British public to thank them for it.

While we will always call out the Conservatives for pickpocketing the British taxpayer, we do welcome their recent pickpocketing of Labour policies. Labour has long argued that if people make Britain their home, they should pay their taxes here too. However, the Prime Minister himself has said that scrapping the non-dom tax status would somehow end up costing Britain money, and the Chancellor previously tried to argue that the non-dom status supports jobs and that reforming it would damage long-term growth. I am delighted to say that the Prime Minister and the Chancellor have finally come around to the Labour party’s way of thinking, but it is not quite what it seems. I am not denying that Conservative Members have come a long way after years of opposing our plan to scrap the non-dom status, but there are still some gaping loopholes in the Government’s plans.

The discount in year 1 is unnecessary and unjustified, and particularly concerning is the loophole that will allow non-doms to exploit offshore trusts so that they can avoid inheritance tax. As my hon. Friend the Member for Ealing North made clear, these loopholes must be closed. I hope that the Minister, when he responds, will commit to closing these loopholes, so I wait with bated breath to hear what he has to say on this policy. If not, will he accept that the Conservatives are once again putting the interests of non-doms before those of ordinary British taxpayers and British businesses?

Let us take corporation tax, which clause 12 sets at 25%. All this Chancellor has had to offer British businesses is uncertainty. Despite promising to cut corporation tax from 19% to 15% in his 2022 leadership bid, he has increased it from 19% to 25%. In contrast, our shadow Chancellor has committed to capping the headline rate of corporation tax at its current rate for the whole of the next Parliament, and we would take action if tax changes in other advanced economies threatened to undermine UK competitiveness.

The Opposition will be supporting the energy security investment mechanism in clause 19 of the Bill before us, as it will help investors get the confidence they need. Likewise, we are committed both to strengthening the windfall tax to raise more revenue to support our country’s energy transition, and to giving as much certainty as possible to the companies affected. That is why our shadow Chancellor has made it clear that, under Labour, our one-off, time-limited energy profits levy will cease to apply by the end of the next Parliament.

We will not be opposing the Bill today, but we will be looking closely at the detail in the specific clauses in the coming weeks. However, let us be under no illusions: this is an exhausted and directionless Conservative Government who are out of ideas and out of time. All they have to offer are U-turns, unfunded promises and an ever-growing tax burden on working people and our constituents. In contrast, the Labour party’s offer to the country will be carefully costed and fully funded, and we will always put working people and British businesses first.

The Government have failed to reduce the tax burden, failed to boost business investment, and delivered only stagnation and chaos, whereas our economic plan is built on the pillars of stability, investment and reform: stability brought about by iron discipline, and guarded by strong fiscal rules, robust economic institutions and certainty on corporation tax; investment, working with the private sector, so that we can lead the industries of the future and make work pay; and reform, starting with our planning system, to tackle vested interests. The British people deserve better than this. The British people deserve change. I hope the Minister will agree with me that it is now time to call a general election as soon as possible.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Minister.

Draft Financial Services and Markets Act 2000 (Disapplication or Modification of Financial Regulator Rules in Individual Cases) Regulations 2024

Tulip Siddiq Excerpts

Monday 15th April 2024 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Mrs Cummins. The Opposition are supportive of the proposed changes, which would enact section 138BA to enable the PRA to more easily adapt, disapply or modify its rules for individual firms.

The greater flexibility the Minister outlined is welcome, but could a similar approach be used to clear the logjam of mid-tier banks wanting to use the internal ratings-based approach? The PRA has helpfully provided some flexibility in relation to IRB model approvals, which could narrow the capital requirements gap between mid-tier and large banks, therefore improving competition in UK banking markets. However, as the Minister may have seen in the Financial Times last August, UK challenger banks have faced multi-year delays to regulatory approvals, which has undermined the potential boost to competition in the market. Has the Treasury given any thought to whether section 138BA could be used to speed up the IRB model approval process for mid-tier banks currently on the standardised approach? I believe—and the Minister may agree—that that could dramatically improve competition in the banking market.

[Bim Afolami]

I thank the hon. Lady for her points. In essence, the regulations give the PRA much more flexibility around the entire rulebook to apply to any specific firm. If the question is whether they will give the PRA the ability to change rules in relation to a particular subset of firms, the answer, of course, is yes. However, if the question—she also mentioned this in her remarks—is whether they will somehow speed up or change the pace at which the rules will be made or applied, that is not what they are meant for. So, yes, the regulations will give much more flexibility—and it is a policy question as to whether that is desirable in any particular circumstance—but they do not necessarily increase or decrease the speed at which such rules change.

[Tulip Siddiq]

I thank the Minister for that answer, and I understand what he is trying to say, but I would like to push this point. If we could speed up the IRB model approvals process for mid-tier banks currently on the standardised approach, that would help our country and the banking market generally, and both sides of the House obviously want to boost competition. I understand that that is not what this particular legislation will do, but have the Minister or the Treasury given any thought to the issue? In the long run, such a change would benefit the financial services sector.

[Bim Afolami]

In terms of where I agree with the hon. Lady, I did not just read about this in the Financial Times last year; I have met mid-tier banks, and I understand their challenges. Their concerns are valid, and we need to do everything we can to support that part of the sector. The regulations allow the banks to apply to the FCA in the way that the hon. Lady outlines. That is something that, if appropriate, I would be very happy to support. Yes, it is important that we have competition, but it is also important that we enable every type of business and every type of individual to be appropriately served by our financial services industry, and more firms offering more services in a way that is prudentially safe is positive to that.

Question put and agreed to.

Oral Answers to Questions

Tulip Siddiq Excerpts

Tuesday 19th March 2024 Commons Chamber

[Laura Trott]

Real wages are now, happily, starting to rise and, as I have said, the OBR has said that inflation will be back to target next quarter. What would not help the cost of living is putting people’s taxes up, as the Scottish Government are doing.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

The tax burden is at a record high, wages are stagnant, rents and mortgages are up by hundreds of pounds, and food prices have gone up by 25%. The Resolution Foundation has confirmed that this is the only Parliament on record during which living standards have fallen. Our constituents deserve better. When is the Minister going to give the British public a chance to vote for change and call for a general election?

[Laura Trott]

We have talked a lot today about the £400 billion of support that we put in during the pandemic and the £100 billion of support that we put in to support people during Putin’s energy price shock. The Labour party did not disagree with any of those things, and I think the hon. Lady in her heart of hearts will know that we have to pay for that—at least, I hope she does. We have had to take some difficult decisions, but because of that, the economy is turning a corner. We are able to reduce working people’s taxes, and I hope that she and her party will find it within themselves to support us in that endeavour.

National Insurance Contributions (Reduction in Rates) (No.2) Bill

Tulip Siddiq Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Thank you, Mr Deputy Speaker.

Labour will always support policies that ease the burden on working people. Labour has said consistently that we want taxes on working people to be lower. That is why, two years ago, when the current Prime Minister wanted to increase national insurance, we opposed it. That is why we supported the cut to national insurance last autumn and why we will support these measures we are debating to bring down national insurance by a further 2p. Let us be clear, however, that the measures come in the context of the highest tax burden on working people since 1949—a tax burden that is continuing to rise. The British public face not just further tax rises, but stagnant growth and wages, prices still going up in the shops, and higher mortgages and rents. Indeed, this will be the only Parliament on record in which living standards have fallen.

Unwilling and unable to fix the economic mess that they have created, the Government have resorted to empty promises—pledge after pledge, but never a plan. Last week, the Chancellor made a £46 billion unfunded promise to abolish national insurance altogether, with no explanation of how he would pay for it. I look forward to the Minister explaining in his speech exactly how it will be paid for. The British people are sick and tired of Conservative spin.

Let us take the Government’s claim that a person on average earnings will be £900 better off as result of this national insurance cut, when combined with the changes made in January. That completely ignores the Chancellor’s own stealth tax rises. His decision not to increase tax thresholds in line with inflation means that the tax burden is forecast to rise by another £41.1 billion over the next five years. That fiscal drag will create 3.7 million new taxpayers by 2028-29. OBR figures show that for every 10p extra that working people pay in tax under this plan, they will get back only 5p as result of the combined cuts to national insurance contributions. As usual, the Conservatives give with one hand, and take with the other, and they expect the British public to be grateful.

Paul Johnson, the director of the Institute for Fiscal Studies, said after last week’s Budget that

“this remains a parliament of record tax rises”,

and that is before we consider the rising cost of bills, with food prices up by 25%, rents by 10% and mortgages by an average of £240 a month. Rather than people being £900 better off, as the Conservatives claim, household income is set to fall by £200 over the course of this Parliament.

A week ago, the Chancellor had the opportunity to deliver a Budget that would finally break our country out of the low-growth, low-wage, high-tax cycle that we have been trapped in because of 14 years of economic failure. The British people needed a Budget for the long term to bring prosperity and rebuild our public services, and yet the Chancellor ended his Budget with a £46 billion unfunded tax plan to abolish national insurance. That would leave a gaping hole in the public finances, put family finances at risk and create huge uncertainty for pensioners. I have not heard one attempt from the Government Benches to explain where that money will come from. I look forward to the Minister’s response, because I am sure he will break down exactly where that £46 billion will come from.

[Gavin Newlands]

If the measure is so bad, why is the hon. Lady not voting against it?

[Tulip Siddiq]

I will not take any lectures from a party that puts oil and gas companies ahead of working people. If the hon. Member wants to change his policy on oil and gas companies having priority over working people, he can intervene again, but somehow I do not think that it will change.

The last time the Conservatives implemented a proposal like this, just 18 months ago, they crashed the economy. In fact, the Chancellor’s plan to abolish national insurance contributions would cost more per year than the proposals in that disastrous mini-Budget. The Conservatives might deny it, but millions of people are still paying the price of their last ideological experiment: the typical family faces an extra £240 a month when remortgaging this year. The Chancellor’s commitment last week exposed a Conservative Government who are putting party first and country second.

Labour is under no illusions about the state of the public finances after 14 years of Conservative government. We know that if we are elected at the next general election, we will have to take tough decisions in government, but instead of the chaos and recklessness we have seen under the Conservatives, Labour will bring stability and security back to the economy. We will never make a commitment without first saying where the money will come from. We will always be honest with the public because that is the responsible approach.

I hope that the Minister, whom I like very much, will finally come clean with the British people in his response. I hope that he will finally break with his party’s irresponsible promises and endless spin. I hope that he will be honest and say that, as a result of decisions taken by his Government, the tax burden on working people is forecast to go up each year over the next five years, and that for every 10p extra that working people pay in tax under the Conservatives, they will get only 5p back. Most importantly, I hope that he takes the opportunity to be straight with the British people, as we have repeatedly asked him to do, by setting out exactly how his Government will pay for their unfunded £46 billion promise to abolish national insurance.

[Kirsty Blackman]

Will the hon. Lady give way?

[Tulip Siddiq]

No, I am finishing.

The British people deserve better. This is just another Conservative pledge without a plan. The Conservatives should call a general election now.

Budget Resolutions

Tulip Siddiq Excerpts

Tuesday 12th March 2024 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

This Budget was the last gasp of a dying, desperate Government. It did nothing to address 14 years of Conservative economic failure and, as always with this Government, it is working people who pay the price.

Many Opposition Members have made powerful contributions to today’s debate, and I apologise for not being able to mention every single one. However, I pay tribute to my hon. Friend the Member for Huddersfield (Mr Sheerman), who said it was his last ever Budget speech today.

The British people are struggling with the highest tax burden in 70 years, and they still face further tax rises over the next five years—a point that was powerfully made by my hon. Friends the Members for Tamworth (Sarah Edwards) and for Newport West (Ruth Jones). Food prices are still 25% higher than they were two years ago. Rents are up by 10%, and a typical family will pay an extra £240 a month when remortgaging this year. Nothing the Chancellor said in last week’s Budget changes that. As much as he tries, he cannot hide from his Government’s record: 14 years of low investment, stagnant wages and poor productivity, the country in recession, wrecked public finances and an economy crippled by debt. The Chancellor tried to wash away the realities last week, but families in our constituencies cannot do the same. People feel worse off under the Conservatives because they are worse off.

As my hon. Friend the Member for Liverpool, Walton (Dan Carden) focused on, the Office for Budget Responsibility—not us—has now confirmed that this will be the worst Parliament on record for living standards. Let me repeat that, because it is worth repeating: this will be the worst Parliament on record for living standards. It is the only Parliament on record in which living standards have fallen. Real pay has gone up by just £17 a week over almost a decade and a half of this Conservative Government. When the Labour party was last in power, wages rose by £183 a week over 13 years. After 14 years of Conservative rule, people have less money in their pockets.

As my hon. Friend the Member for Bedford (Mohammad Yasin) touched on, the latest ONS figures show seven consecutive quarters of falling GDP per capita from the start of 2022. This is the longest period of economic stagnation in this country since the 1950s, and now, under this Prime Minister and this Chancellor, the country has fallen into recession. Government debt has almost tripled under the Conservatives from £1 trillion to just under £2.6 trillion.

Did last week’s Budget give the British people or British businesses any hope that the Government could turn things around? Absolutely not. Household disposable income is set to fall by £200 per person over the course of this Parliament. Real GDP per capita is expected to be lower at the end of this year than it was at the start of this Parliament, and borrowing has been revised up in the next five years of the forecast period. The Institute of Directors described the Chancellor’s efforts as an “unremarkable Budget for business”, and the British Retail Consortium has said that it

“will do nothing to turbo charge investment and growth in communities”.

This was a failed Budget from a failing Government.

[Sarah Edwards]

Does my hon. Friend agree that this Conservative Budget has confirmed that the next Government will receive the worst economic inheritance since the second world war? Does she agree that the Tories should listen to our constituents, call a general election now and stop taking a wrecking ball to the economy on their way out the door? [Interruption.]

[Tulip Siddiq]

I thank my hon. Friend for her intervention. Those on the Conservative Benches do not want to hear it, but if they have so much confidence in their record, why do they not do as she asks, call a general election and put a test to the public?

Unable to defend his own Government’s records and unable to offer any plan to get the country out of the economic mess that his party created, this Chancellor has resorted to undeliverable promises. When we thought things could not get any worse, the Chancellor bizarrely ended his Budget last week with a £46 billion unfunded tax plan to abolish national insurance. This would leave a gaping hole in the public finances, put family finances at risk and create huge uncertainty for our pensioners. This is even bigger than the unfunded tax cuts announced in the Conservatives’ mini-Budget that added hundreds of pounds to people’s mortgages, as my hon. Friend the Member for West Ham (Ms Brown) powerfully pointed out. I will be listening intently to the Minister’s response today, and I hope that he will set out how his Government would fill that gaping hole in the public finances to avoid rerunning the disastrous experiment that crashed the economy just 18 months ago.

[Fleur Anderson]

Does my hon. Friend agree that it is absurd that throughout today’s event the Government have been unable to confirm how they will pay for their unfunded £46 billion plan to abolish national insurance contributions? Where is the money coming from?

[Tulip Siddiq]

rose—

[Alan Brown]

I thank the hon. Lady for giving way. I asked earlier about what the Institute for Fiscal Studies has called a conspiracy of silence from both Labour and the Conservatives. Is Labour sticking with the baked-in £20 billion of future departmental cuts that are in the Budget, and if not, how is Labour going to pay for that?

[Tulip Siddiq]

rose—

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I fully appreciate the orchestration, but it would be quite a good idea if one intervention was responded to before the next one was made.

[Tulip Siddiq]

Apologies, Mr Deputy Speaker. I will answer both interventions by saying that I know those on the Conservative Benches do not want to hear it, but if you make a pledge without the plan, you have to clarify where the money is coming from—[Laughter.] It is not a laughing matter. It is causing havoc in people’s finances.

Then again, nothing would surprise me from this clown show of a Government. Less than a week after committing to a British ISA, the Chancellor has apparently U-turned and ditched the plan until after the election, because he has apparently just noticed that he has no idea how he is going to pay for it. Another U-turn, another uncosted announcement, another promise without a plan from this clueless Conservative Government.

Turning to the other tax cuts in the Budget, Labour has consistently said that we want to reduce the tax burden on working people. That is why, when the current Prime Minister wanted to increase national insurance two years ago, we opposed it. Let us be under no illusions: we support the measures announced last week to bring national insurance down by an additional 2%, but that does not change the fact that this Government have raised the tax burden to record levels and taxes are continuing to rise. Under the Chancellor’s plan, households will be £870 worse off on average. His decision to freeze tax thresholds will create 3.7 million taxpayers by 2028-29.

As my hon. Friend the Member for Nottingham South (Lilian Greenwood) pointed out, OBR figures show that, as a result of last week’s announcements, for every 10p extra that working people pay in tax under the Conservatives, they will get only 5p back. And the Government expect the British public to thank them for it! However the Chancellor tries to spin it, his Budget means that Britain will go into the next general election with taxes at their highest level since 1949.

Although we will always call out the Conservatives for pickpocketing the British taxpayer, we welcome their recent pickpocketing of Labour policies. Labour has long argued that people who make Britain their home should pay their taxes here. Bizarrely, however, the Prime Minister said that scrapping the non-dom status would somehow cost Britain money. Even more bizarrely, the Chancellor previously tried to argue that the non-dom status supports jobs and that reforming it would cause long-term damage to growth.

I hope the Economic Secretary to the Treasury will explain what caused this road to Damascus moment. Is he personally responsible for finally getting his party to listen to us about the importance of closing the non-dom loophole, which the OBR estimates will raise £3 billion a year? As my right hon. Friend the Member for Walsall South (Valerie Vaz) and my hon. Friend the Member for Wakefield (Simon Lightwood) said, Labour first called for the loophole to be closed two years ago, meaning that the Government have cost the country £6 billion that could have been spent on precious public services.

I do not deny that the Conservative party has come a long way since their opposition to our windfall tax on oil and gas producers but, even after yesterday’s announcement of a one-year extension, the Chancellor is leaving loopholes that mean the energy giants will still pay billions less in tax. Surely the Government have learned by now that they would save themselves a lot of time, and the country a lot of money, if they adopted Labour’s policies in full.

This exhausted and directionless Conservative Government are out of ideas and out of time. All they had to offer last week were unfunded promises and an ever growing tax burden on working people. In contrast, our offer to the country will be carefully costed and fully funded, and it will always put working people first. The Conservatives have failed on growth, failed on living standards and delivered only stagnation and chaos.

Labour’s economic plan will build on the pillars of stability, investment and reform: stability brought about by iron discipline and guarded by strong fiscal rules and robust economic institutions. [Interruption.] Conservative Members love chuntering, but they would hear our plan if they listened properly. Investment—we will work with the private sector so that we can lead the industries of the future and make work pay. Reform—starting with our planning system, we will take on vested interests to get Britain building again.

Britain deserves better, Britain deserves change and the British people deserve an election.

Draft Bank of England Levy (Amount of Levy Payable) Regulations 2024

Tulip Siddiq Excerpts

Tuesday 20th February 2024 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Ms Bardell. I am supportive of the plan to replace the current cash ratio deposit, as the Minister will probably know, and of the proposed mechanics of the levy. Therefore, Labour will support this statutory instrument.

I have some technical questions on the implementation, although I understand that the Minister might not be able to answer them now and I am happy to receive answers in writing if he wants to send them to me later. Will the Bank of England be determining, as part of its formal review, whether non-bank financial institutions should be considered eligible for the levy in future? If so, what is the timeline for that review? What discussions has the Treasury had with the Bank about the adoption of a rolling five-year budget to help eligible banks to plan their own budgets? I am sure the Minister has also heard time and again that it is the lack of planning that gives banks uncertainty, so any plans he has for a rolling five-year budget would be helpful to know.

Finally, I am sure the Minister will agree that providing the banking sector with certainty is essential to securing the confidence needed to incentivise investment in the real economy. Could he therefore provide clarity on whether this SI will come into force by the beginning of March?

Draft Bank of England Levy (Amount of Levy) Regulations 2024

Tulip Siddiq Excerpts

Tuesday 20th February 2024 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Ms Bardell. I am supportive of the plan to replace the current cash ratio deposit, as the Minister will probably know, and of the proposed mechanics of the levy. Therefore, Labour will support this statutory instrument.

I have some technical questions on the implementation, although I understand that the Minister might not be able to answer them now and I am happy to receive answers in writing if he wants to send them to me later. Will the Bank of England be determining, as part of its formal review, whether non-bank financial institutions should be considered eligible for the levy in future? If so, what is the timeline for that review? What discussions has the Treasury had with the Bank about the adoption of a rolling five-year budget to help eligible banks to plan their own budgets? I am sure the Minister has also heard time and again that it is the lack of planning that gives banks uncertainty, so any plans he has for a rolling five-year budget would be helpful to know.

Finally, I am sure the Minister will agree that providing the banking sector with certainty is essential to securing the confidence needed to incentivise investment in the real economy. Could he therefore provide clarity on whether this SI will come into force by the beginning of March?

Oral Answers to Questions

Tulip Siddiq Excerpts

Tuesday 6th February 2024 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

The British public are still struggling with the Conservative cost of living crisis, and the Government are now forcing up council tax. Last week, for the first time in my life, a Conservative MP spoke for me when he said:

“There’s almost no point chopping £100 off tax bills nationally if you’re adding on to it with council tax.”

Labour Members agree with the hon. Member for Mansfield (Ben Bradley). Does the Chief Secretary agree with her hon. Friend and colleague?

[Laura Trott]

Council tax is a matter for councils, but we put in place a limit, which I do not believe existed under the previous Labour Government. More than that, the most difficult thing for councils and consumers more broadly is the £28 billion-worth of tax rises that Labour is planning in government.

Draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2024

Tulip Siddiq Excerpts

Monday 29th January 2024 General Committees

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under you, Mr Twigg. I support the order, which designates the operation of a pensions dashboard as a regulated service; it must therefore be regulated by the FCA. The Opposition support any initiative that helps people to manage their finances and save for later life. The changes being debated are long overdue. Even though I support them, the Minister will not be surprised to know that I have some questions. International evidence and the DWP’s own impact assessment show that to reach their potential to help millions of people, dashboards must be incorporated into services that people already use, so how will the Government encourage firms to come forward to offer dashboards and ensure that they are regulated safely? When will the FCA publish its final rules? Does it expect commercial dashboards and the Money and Pension Service’s dashboard to be available at the same time?

Pension dashboards have already faced delays, as the Minister will know, and the Association of British Insurers has warned that the industry needs confidence that the existing timetable will stick to ensure effective delivery of this initiative. To what extent will pension dashboards rely on other parts of the Government? For example, will they rely on the Government’s One Login service and how will that affect the market for pension dashboards?

Some dashboards will present other financial data alongside pensions. That is one of the main benefits to consumers: to see all their finances in one place. As such, this statutory instrument is relevant to the Data Protection and Digital Information Bill as the smart data proposals in the Bill will enable the Government to create a framework for open finance and the digital verification proposals will make it easier for consumers to prove who they are online. Could the Minister reassure me that these related initiatives will not be considered in isolation and that he will take a holistic view of the legislation?

Building Societies Act 1986 (Amendment) Bill

Tulip Siddiq Excerpts

2nd reading
Friday 19th January 2024 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on bringing this important Bill to the House for debate. It is very lucky to get the first slot in the private Member’s Bill ballot, but it also takes a lot of work to find a Bill that generates such cross-party support and talks to such an important issue, as we have heard today. I hope you will indulge me for a minute, Madam Deputy Speaker, while I speak about the fabulous work that my hon. Friend has done in the House, because it is not often that we get to talk about and congratulate our comrades in quite this way.

My hon. Friend, who has been in the House since 2010, has done valuable work on the all-party parliamentary group on state pension inequality for women, which I am sure everyone will recognise. Before she was elected to the House, she worked closely with the National Asthma Campaign to ensure that life was easier for people who suffer from asthma, as I do. I commend her for that and for all the work she did with the GMB to change the law around the compensation paid to victims of asbestos-related diseases. This is, then, not the first piece of legislation she has worked on, but it is an important Bill and it shows how valued she is as a Member of the House.

I know how closely my hon. Friend has worked with civil servants, Ministers and the Treasury to produce a Bill that has such cross-party support and of which Treasury Ministers approve. From my dealings with them, I know that that is rare. I am delighted to say that the Opposition will back the Bill wholeheartedly today. I also acknowledge the important work of Labour’s sister party the Co-operative party, and the wider mutual sector, including the Building Societies Association and Nationwide. They have spent a great deal of time feeding into the Bill.

As has been said throughout the debate, building societies have a long and proud tradition of supporting working people to access affordable finance. The sector continues to play an invaluable role in promoting financial responsibility and resilience among its members, including by supporting young families to take their first step on to the housing ladder.

Building societies direct a greater proportion of their lending to first-time buyers than any other part of the financial services sector. They supported 70,000 first-time buyers in the first three quarters of 2023, and since 2020 building societies have supported 360,000 first-time buyers—that is more than £63 billion provided to help people to buy their first homes. The Bill is so important because it will empower societies across the UK to raise more funds and help our vulnerable constituents.

As my hon. Friend the Member for Sunderland Central set out in her compelling speech, her Bill could unlock significant additional lending capacity from building societies to support more working people to become homeowners. The hon. Member for Mid Norfolk (George Freeman) talked about how every £10 billion of new lending capacity, secured through the changes in the Bill, will potentially support an additional 20,000 first-time buyers. I agreed wholeheartedly with everything he said; dare I say, some of his comments sounded quite socialist—[Interruption.] I see he does not agree with me about that.

The debate has been interesting because I have agreed with lots of the Members who have spoken. In fact, the hon. Member for Dover (Mrs Elphicke) even quoted the first Labour Prime Minister favourably. There are plenty of spaces on the Labour Benches if anyone ever wants to come across.

Building societies have never been more important in the UK’s economy and public life. As a result of the cost of living crisis, many families have, as has been noted, been forced to use their savings in the face of rising energy prices and food prices. But building societies have continued to support people to save and to build financial resilience during this very difficult period. They attracted £18.9 billion in cash savings during the first nine months of last year. They are bucking the trend of the decline in savings balances that we have seen across the wider sector. Building societies have proven resilient in the face of hardship.

Lots of Conservative Members spoke about the role that the sector played during the pandemic. Leeds building society, finding that the requests for mortgage deferrals had increased to 2,000 a day, increased its use of robotic process-automation technology to create a fully automated web form for customers. At Nationwide, a team of mortgage, technology and AI specialists trained the society’s virtual assistant, Arti, to handle common covid-related mortgage queries.

Such resilience has allowed the sector to support its members, whether through covid or the current cost of living crisis, which is why clause 1 of the Bill is so important. It will allow building societies to exclude from the funding limit funds accessed from the Bank of England in stress scenarios, types of loss-absorbing debt instruments, and sale and repurchase agreements. That will level the playing field with banks and provide an extra level of protection for buildings societies during times of financial crisis, so that they can continue to support their members for many decades to come.

As I mentioned, in recent years we have seen many building societies adapt to new challenges and adopt exciting technologies and digital ways of working. Principality building society has delivered an online mortgage payment holiday service in partnership with the fintech company Podium Solutions. The service allows members to access a mortgage holiday repayment calculator and an online application process to better understand their mortgage outcomes.

The changes introduced by clause 2, which would allow real-time virtual participation in annual general meetings, are long overdue. Building societies have proven time and time again their ability to innovate and adapt to changing consumer behaviour. I agree with what the hon. Member for Dover said about other places having moved on, but in Parliament we do it face to face. We should cater to changing consumer behaviours, and there is no reason to subject the sector to outdated restrictions that do not apply to the wider financial services sector.

Clause 3 paves the way for reducing the administrative burden in respect of executing documents. Similar provisions are already in place for banks. That is why I will enthusiastically support the Bill. Labour believes that further legislation is needed to level the playing field, secure the future of the sector and achieve our ambition of doubling the size of the mutual and co-operative sector, in which building societies play a critical part. That is why Labour has committed to requiring financial services regulators to report annually to Parliament on how they have considered the specific needs of mutuals, including building societies.

Labour recognises the Bill as an important step forward and will give it our full support today. I look forward to being on the same page as the Treasury Minister, he will be pleased to know. And a final word of congratulations to my hon. Friend the Member for Sunderland Central, who has done a tremendous job of putting together this important Bill.