The Economy

Debate between Tulip Siddiq and Bim Afolami

Wednesday 22nd May 2024 Commons Chamber

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

I thank the Minister for advance sight of his statement.

Of course it is welcome that the rate of inflation is finally slowing after three years of the Government missing every single target, but the tone-deaf victory lap we are seeing from the Government today will feel like a slap in the face to the British people who, after 14 long years of Conservative chaos, are still significantly worse off. While Conservative Ministers are popping champagne corks over the rate of food price rises, the cost of the typical family shop has gone up by nearly £1,000 since 2019—so those families will not be celebrating—and while the Chancellor and the Prime Minister gaslight ordinary British families by suggesting that the cost of living crisis is over, the costs for a two-earner household are more than £150 a week higher than they were before the last election.

The Minister claims that the economy has turned a corner, but in reality the Conservatives’ record on growth has been nothing short of pitiful. If the UK economy had grown at the average rate of the OECD in the last 14 years, it would now be £140 billion larger—that is not just about lines on a graph; it would have meant an additional £50 billion in tax revenues to invest in our public services, and more money in working people’s pockets.

I noted with interest that the Minister quoted selectively from the IMF’s report. In that report, which he cited so triumphantly, the IMF confirmed that under the Conservatives the UK was suffering from the lowest growth in the G7, and just this week the IMF said that the longer-term growth prospects of the UK “remain subdued”. This is the Conservative party’s legacy: a poorer Britain, working people worse off, and the public realm in disarray. I think the Minister may also be slightly confused about his Government’s record on tax. On the Conservatives’ watch, the tax burden is the highest in 70 years, and under the Prime Minister’s tax plans households will, on average, be £870 worse off by 2028. Those are the statistics that the Minister missed out.

In contrast to the Conservatives, who have consistently failed to explain how they will pay for their £46 billion unfunded commitment to abolish national insurance, we in the Labour party have ensured that all our plans are fully costed. Let me also make it clear that a Labour Government would not be celebrating the inflation target finally being met for the first time in years. We would not be doing a tone-deaf victory lap for overseeing a decade and a half of stagnant growth. Instead, we have pledged to deliver economic stability with tough spending rules so that we can grow our economy and keep taxes, inflation and mortgages as low as possible.

The choice at the next election is clear: five more years of chaos with the Conservatives or stability with a changed Labour party. That is why the Government are running scared. Time after time, they have chosen to bottle it rather than go to the country, but I hope that, today of all days, the Prime Minister will do the right thing. It is time for this exhausted and failing Government to step aside in the national interest, call an election, and let the responsible party take charge.

[Bim Afolami]

Let me start by welcoming the shadow Minister’s remarks, and by saying that no one on the Government Benches—certainly not me—feels that times are not still tough for many millions of people. We are acutely aware of that, which is why we have worked so hard over the last few years to make the difficult decisions that are required for us to guide the country through the difficulties wrought by covid, the biggest pandemic in 100 years, and by the energy shock from the war in Ukraine. No one on this side of the House minimises the difficulties that people have gone through and that many are still going through.

Let me pick up a couple of points of fact. The hon. Lady quoted the IMF, and she mentioned selective quotations. I am afraid that she wins the prize on that one: the IMF was very clear about the fact that over the next five or six years, the UK will be the fastest-growing country in the G7 apart from North America. She also mentioned confusion. I think that she and her party are the ones who are confused: they are confused on the question of taxes. We have scored Labour’s tax plans, and they amount to an extra £2,094 over four years for the average person. Labour Members say that they want to grow the economy, and they say that they are pro-business—at least, that is what they tell business people outside the House—but they are putting in place a workers plan, led by their deputy leader, that will impose 70 new regulations on small businesses, far more power for trade unions and day-one rights on employment, and will ban flexible working. It will damage many of the things that make small businesses in this country successful.

Let me end by saying this: if we want a Government who will cut inflation further and grow the economy, we should not increase borrowing and increase taxes like the Labour party.

Oral Answers to Questions

Debate between Tulip Siddiq and Bim Afolami

Tuesday 7th May 2024 Commons Chamber

[Bim Afolami]

I am happy to meet my right hon. Friend to discuss the lifetime ISA, which is a fantastic product brought in by this Government to help young people to get on the housing ladder. I am happy to meet him to discuss ways in which we can make it more accessible for more people in more circumstances.

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

On a point of order, Mr Speaker.

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

Debate between Tulip Siddiq and Bim Afolami

Monday 15th April 2024 General Committees

[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.

Draft Public Offers and Admissions to Trading Regulations 2023 Draft Securitisation Regulations 2023 Draft Financial Services Act 2021 (Overseas Funds Regime and Recognition of Parts of Schemes) (Amendment and Modification) Regulations 2024 Draft Data Reporting Services Regulations 2023

Debate between Tulip Siddiq and Bim Afolami

Wednesday 17th January 2024 General Committees

[Bim Afolami]

It will be a pleasure to answer the questions of the hon. Member for Hampstead and Kilburn. I will take them in turn, but before I get to them I will say that I have very much noted the comments of the hon. Lady and those of my right hon. and hon. Friends about the speed of implementation and that being key to what the House and the Committee want to see so that we get the changes we all need.

On the prospectus rules coming into force in 2025, the hon. Member for Hampstead and Kilburn will appreciate that this is a complicated set of changes. The Treasury and industry needed to ensure that what we are doing, when that is such a comprehensive piece of work, was the right thing and had the broad support of industry. We have got that, but I repeat that I will be working very hard to make sure that we implement these as quickly as possible. We are closely engaging with the FCA while it is beginning the complex process of reviewing its rules and changing them. The FCA is committed to completing this by the first half of 2025—not just completing the work but actually having new rules published. I will increase the speed of that if humanly possible.

On the point from the hon. Member for Hampstead and Kilburn about securitisation, I am always keen to talk with European Union friends and colleagues across a range of matters. Indeed, I will be visiting Brussels soon in order to discuss these issues and a range of others. I am happy to continue to do that. She also mentioned the legacy transactions point that was brought up by the Association for Financial Markets. We are confident that the regulations are appropriate, but I am very happy to meet with the Association if it would like to discuss any of its concerns.

On the OFR and the equivalence judgments, the answer is: very soon, I hope. I will be updating the hon. Lady and the House as soon as I possibly can, because I recognise that this is important. In relation to the consolidated tape, lots of different competitor jurisdictions are trying to do this work, which is part of the evidence that we are doing the right thing. I am confident that we are going to do this faster and more effectively than our competitors.

[Tulip Siddiq]

I appreciate the Minister’s responses, but the EU does not recognise the UK STS securitisations. Has the Minister made an assessment of that? He says that he is going to Brussels to speak to them, but has he not already started speaking to them, or is this the first time? That is quite an oversight, considering that they do not recognise those securitisations.

[Bim Afolami]

The hon. Lady will appreciate that across a range of different issues there are often political reasons why the European Union may or may not do things. We are committed to making sure that it operates in a sensible way when it comes to the UK, because we know that the UK’s financial services ecosystem, regulatory regime and market make it the leading financial services centre. But I will continue to engage with the EU on that basis. To her precise point, there are a range of different issues we are talking to the European Union about at all levels of Government. Financial services is included in that, and I will continue to have those conversations.

[Tulip Siddiq]

Can I ask the Minister to write to me after his visit to Brussels?

[Bim Afolami]

Of course.

Question put and agreed to.

DRAFT SECURITISATION REGULATIONS 2023

Resolved,

That the Committee has considered the draft Securitisation Regulations 2023.—(Bim Afolami.)

DRAFT FINANCIAL SERVICES ACT 2021 (OVERSEAS FUNDS REGIME AND RECOGNITION OF PARTS OF SCHEMES) (AMENDMENT AND MODIFICATION) REGULATIONS 2024

Resolved,

That the Committee has considered the draft Financial Services Act 2021 (Overseas Funds Regime and Recognition of Parts of Schemes) (Amendment and Modification) Regulations 2024.—(Bim Afolami.)

dRAFT DATA REPORTING SERVICES REGULATIONS 2023

Resolved,

That the Committee has considered the draft Data Reporting Services Regulations 2023.—(Bim Afolami)

Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2023

Debate between Tulip Siddiq and Bim Afolami

Monday 8th January 2024 General Committees

[Bim Afolami]

I thank the shadow Minister for supporting the regulations. It is incumbent on me to make two key points to address her question about the Cayman Islands. First, a country’s being taken off the list reflects that it has now satisfied what the Financial Action Task Force has set out for it, that it has worked hard and has evidenced how it is doing that. The point about ownership lists and whether a legitimate interest is required is a fair and interesting one, but it has not triggered the Financial Action Task Force to say that the Cayman Islands is not largely compliant. That is the first point. The second is that this is always evolving and no country in the world is perfect. Illicit activity is a scourge that we are trying to remove from our financial system, so we continue to work with the Cayman Islands to make sure it does everything it can.

[Tulip Siddiq]

I draw the Minister’s attention to Transparency International’s warning that the requirement to demonstrate a legitimate interest could limit access for civil society organisations and journalists, who in recent years have been key in uncovering corruption and money laundering. That is my point when I ask about access to the registers. Does he share my concerns about that?

[Bim Afolami]

I am happy to look into that. The UK and various overseas territories, not just one in particular but across the whole landscape, have been working at official level technically to improve access and visibility in terms of beneficial ownership. The UK, when Lord Cameron was Prime Minister, was a leader in doing that internationally, and we will continue that work. I am happy to continue discussing with the hon. Lady what more we can do in respect of the Cayman Islands.

I listened carefully to the hon. Lady’s speech, and it is the Government’s view that the amendment will ensure that UK legislation remains up to date and in line with international standards. It is clear that money obtained through corruption or criminality is not welcome in the UK and should not be welcome anywhere. That is why we are playing such a leading part in the Financial Action Task Force.

The new procedure for dealing with the problem will enable regulations to allow the UK to automatically reflect changes agreed by the Financial Action Task Force in our own list. In the event that the Government choose to deviate from the list, such updates will need to proceed through a draft affirmative SI.

Oral Answers to Questions

Debate between Tulip Siddiq and Bim Afolami

Tuesday 19th December 2023 Commons Chamber

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

Before I ask my question, I want to convey the apologies of the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves). She is delivering the eulogy at Alistair Darling’s funeral today.

I want to say a few words about Alistair Darling—I am sure you will agree, Mr Speaker—a dedicated public servant, who was respected across both Houses. He led the country’s economic response to the global financial crisis with integrity, honesty and sound judgment, and we will all miss him. [Hon. Members: “Hear, hear!”]

As my hon. Friend the Member for Manchester, Withington (Jeff Smith) just said, nearly 6,000 bank branches have closed since 2015, and only 30 banking hubs are up and fully running. That has left countless people financially excluded and affected lots of small businesses. I ask the Minister once again: will he accelerate the roll-out of banking hubs properly? Why are his Government not doing anything to reverse the decline of the great British high street?

[Bim Afolami]

I agree with the hon. Lady’s words about Lord Darling and echo the words of my right hon. Friend the Chancellor.

On bank branches, I will repeat my position: it is important that the Government do not decide when a branch opens and when it closes, but it is a concern when communities are left without appropriate access to cash. That is why we were the first Government to legislate for access to cash, as we did earlier this year, and that is why I believe we should speed up the roll-out of banking hubs. I am working with the industry on ways in which we can do that.

[Tulip Siddiq]

If the Minister is serious about protecting the future of the great British high street, will he back Labour’s pledge, which has been welcomed by Cash Access UK and the wider sector, to guarantee face-to-face banking in every community and give the FCA the powers it needs to roll out hundreds of banking hubs across the country?

[Bim Afolami]

As the hon. Lady knows, the industry leads the roll-out of banking hubs. We are supporting it—I say this again—to speed that up as much as possible. I have not seen the Labour pledge—I suspect that I will not support it—but it is important that the industry hears the views of constituents and Members from across the House and that we speed up the roll-out of banking hubs in communities that need them.

Autumn Statement Resolutions

Debate between Tulip Siddiq and Bim Afolami

Wednesday 22nd November 2023 Commons Chamber

[The Economic Secretary to the Treasury (Bim Afolami)]

I am delighted to bring today’s debate on the measures in the autumn statement to a close, and also to pay tribute to my shadow, my good friend the hon. Member for Hampstead and Kilburn (Tulip Siddiq). I am very glad to follow in the footsteps of Members as eminent and as good at this job as my right hon. Friend the Member for Salisbury (John Glen). He was excellent in his job, and I am happy to follow his example.

[Tulip Siddiq]

I miss him!

[Bim Afolami]

Don’t miss him; he’s still here.

Make no mistake, Madam Deputy Speaker: this is an autumn statement for growth—one that supports entrepreneurs, cuts business tax, rewards work and brings prosperity to every corner of our wonderful country, and one that the OBR says will permanently increase the size of our economy. [Interruption.] That is what the OBR says. As my right hon. Friend the Chancellor said this afternoon, the Government understand that a successful economy depends less on the decisions and diktats of Ministers than on the “energy and enterprise” of its people, and that is the thrust of this autumn statement. It is about a Government taking action that reduces the burdens on businesses, while also empowering people and getting Great Britain growing and moving again.

But the context really matters. We are only able to pursue these policies now because of what the Government, under our Prime Minister, have achieved up to this point. We have brought inflation down from 11.1% to 4.6%, meeting the Prime Minister’s pledge, and we are on track to meet the 2% target by the middle of 2025. The OBR has confirmed that the measures announced today will make inflation next year lower than it would otherwise have been. We have achieved this while growing our economy, which is already bigger than it was pre-pandemic, contrary to what was often said on the Opposition Benches in debates in recent weeks and months. Our economy has grown faster than many of our competitors since 2010, which is when this Government first came into office.

Financial Services and Markets Bill

Debate between Tulip Siddiq and Bim Afolami

Report stage
Wednesday 7th December 2022 Commons Chamber

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

The Opposition support the Bill, particularly the new secondary objectives for regulators on international competitiveness and long-term growth. It is a welcome first step in supporting the City to take advantage of opportunities outside the EU, such as creating a welcoming environment for new financial technologies and incentivising financial services to increase investments in domestic industries through reform of solvency II.

We were delighted when, after much pressure from the Labour party, the Minister decided to drop his dangerous policy of the intervention power. Despite repeated warnings from the Bank of England, business and the Labour party that he should not be putting the UK’s international competitiveness at risk by threatening our system of regulatory independence, the current Minister pushed on and told me it was a good thing. In my eyeline, I can see the hon. Member for North East Bedfordshire (Richard Fuller), who, when he was the Economic Secretary to the Treasury, said to me on Second Reading that it was right for Ministers to be able to intervene in such a way.

[Bim Afolami (Hitchin and Harpenden) (Con)]

On regulatory independence, notwithstanding the particular call-in power the hon. Lady is describing, would she agree that it is important for the elected Government and this House to be able to set the direction in which regulators are meant to go, and that if the regulators are not going in that direction, this House and the Government should be able to correct the direction they are going in?

[Tulip Siddiq]

I support much of what the hon. Member says, and I will come on to that a little later in my speech, but the call-in power is very different from what he is describing. Time and again, we warned Ministers that this would be detrimental to our regulatory independence, and they did not listen. However, if the hon. Member listens carefully, he will hear, when I come on to the next page of my speech, that I will address the valid points he is making.

In Committee, when I pushed the current Minister on why this dangerous intervention power was necessary, he told me that voices in the industry had told him we needed an “agile and flexible system”, which he claimed could only be brought about by this intervention power. After all of this from the three Economic Secretaries I have shadowed in 10 months, who kept pushing this dangerous intervention power, strangely enough the Government then dropped the policy: I just received an opaque letter, which did not really offer any proper explanation for why this Government have had a change of heart. If you do not mind my saying so, Mr Deputy Speaker, I thought about when I got a text from my crush in the sixth form telling me there would be no second date, without his actually telling me face to face why he did not want to see me again. I do wonder why, but I say to the Minister that I am grateful that he listened to the Labour party and has dropped the dangerous intervention power. I only wish he had done it sooner, so we could have saved some unnecessary damage to our global reputation.

While the intervention power was wholly inappropriate, we recognise that the Bill facilitates an unprecedented transfer of responsibilities from retained EU law to the regulators, and this does require democratic accountability. That is why I am glad the Government have listened to the concerns raised by me and others in Committee and have introduced new clause 17, which will allow regulators to be held to account against key metrics.

I hope the Minister will be able to commit to supporting new clause 10, tabled by my hon. Friend the Member for Blaenau Gwent (Nick Smith), to further strengthen the democratic accountability of regulators.

I was absolutely delighted that the hon. Member for West Worcestershire (Harriett Baldwin) was following my speeches at the Labour party conference so closely, where again and again I made the case for a new form of regulated personalised guidance. She has tabled new clause 11, which would create the space to do that, and I hope the Government will support her new clause.

Energy (oil and gas) profits levy

Debate between Tulip Siddiq and Bim Afolami

Tuesday 22nd November 2022 Commons Chamber

[Tulip Siddiq]

As always, my hon. Friend is right, as is his point about how every time the Conservatives bring in a fiscal rule about lowering debt, they end up breaking it.

[Bim Afolami (Hitchin and Harpenden) (Con)]

May I ask for some clarity on the hon. Lady’s remarks about oil and gas? What exactly is the Labour party’s position on whether we should have more oil and gas? If it thinks that we do need oil and gas, what would it do to achieve that?

[Tulip Siddiq]

I am not quite sure what the hon. Gentleman means. Of course we need more oil and gas, but we have said clearly that we should make fairer choices and tax those who say that they have too much money as excessive profits. That is what we are saying, and the hon. Gentleman needs to listen carefully. Labour would also have ended the VAT exemption for private schools, which would raise £1.7 billion every year. That would have been a fairer and more effective way of fixing the Tory economic crisis and bringing the deficit down, instead of pushing the burden on to hard-working families.

Black History Month

Debate between Tulip Siddiq and Bim Afolami

Tuesday 20th October 2020 Commons Chamber

[Bim Afolami]

I was trying to be so nice to the hon. Lady. I do not know why she is carping from a sedentary position, but I will continue. Two words have come up quite a lot in the debate. I would like to address them, and I address them as a Conservative.

[Tulip Siddiq]

Is this what they teach you at Eton?

[Bim Afolami]

Okay; let’s address this. The hon. Lady shouts from a sedentary position, “That’s what they teach at Eton.” First, I am not sure that they did, but regardless of that point, yes, I went to Eton College. It is a good school. I am proud of being able to go to that school. I am proud of the fact that people of all backgrounds and all races are able to go to that school. I reject the idea that if someone is black or non-white, there are certain places that they are not able to go.