PARLIAMENTARY DEBATE
Topical Questions - 7 May 2024 (Commons/Commons Chamber)

The shadow Chancellor often likes to ask what has improved over the past 14 years, so I thought I would update the House on some of the latest statistics about the British economy. According to UN conference data, we have now overtaken France, the Netherlands and Japan to become the world’s fourth largest exporter. The International Monetary Fund says that we will grow faster over the next six years than France, Italy, Germany or Japan, and there are 200,000 more people in work compared with a year ago, which means that, for every single day Conservative Governments have been in office since 2010, there are 800 more people in work, many of whom will be very pleased that we are sticking to our plan.

We should add to the Chancellor’s statistics that we have the widest economic inequalities in Europe. Last week, Professor Sir Michael Marmot published new analysis showing significant increases in health inequalities—how long we live, and how long we live in good health—and that is particularly the case between the north and south-east England. That is of course driven by the economic inequalities that I have just referred to. What assessment has the Chancellor undertaken on the loss in productivity directly as a result of that increase in health inequalities?

If the hon. Lady is concerned about economic inequalities, she will be horrified to know that they were even worse under the last Labour Government. They have been reduced under this Government. When it comes to health inequalities, it is this Government who are phasing out smoking for everyone under the age of 14—one of the biggest single things in a generation that will reduce health inequalities and mean that poorer people live longer.

I can confirm that we are very alive to cost of living pressures caused by fuel duty. In fact, we spent £6.4 billion freezing the duties on fuel, which will save the average motorist £50 over the coming year.

I call the shadow Chancellor.

At the Budget, the Chancellor set out his intention to abolish national insurance—a £46 billion annual commitment with no clear plan as to how it would be paid for. One way to do it would be to merge income tax and national insurance. Does the Chancellor agree with analysis from the House of Commons Library that shows that merging those two would increase income tax by 8p in the pound?

Which is why it is not our policy.

That is strange, because the day after the Budget, the Chancellor told Sky News that

“you can end that unfairness of taxing work: you can merge income tax and national insurance.”

The late Chancellor, Nigel Lawson—the Prime Minister’s hero—warned that merging them would

“destroy the contributory principle and create many losers, especially among the elderly.”

In fact, a retired pensioner with an average occupational pension income of £198 a week would pay an additional £738 a year in tax. Is the reason that the Conservatives will not come clean not that they are planning to pick pensioners’ pockets to fund the abolition of national insurance?

If the right hon. Lady listened to my comments carefully, and I do not always give her credit for that, she would know that our policy is to abolish employees’ national insurance, and that means we want to bring it down to zero. If Labour’s strategy is to win the election by frightening pensioners with fake news stories, I would just say that Britain deserves better.

My right hon. Friend is right that this issue is critical. I am pleased that the ISSB recently announced its intention to commence a research project on a nature thematic standard, carefully considering the TNFD’s recommendations. His Majesty’s Government have established a formal mechanism to assess the ISSB standards for suitability for the UK to ensure that with a general sustainability standard, and more specifically with a climate sustainability standard, we are doing the right thing for the UK. The Government will publish an implementation update on sustainability disclosure requirements shortly to provide further information for industry—watch this space.

I have to say that I find this hypocrisy astounding. First, if the Opposition objected to the national insurance cuts, why did the Leader of the Opposition say that he supported them? If the Opposition are so keen on abolishing tax dodging, why did they not support our Finance Bill, which had measures in place to do just that? They did not support it; they abstained on it.

The Bank of England has said that quantitative tightening is not an official part of its monetary policy targeting, yet it is at risk of costing, fiscally, £179 billion in losses underwritten by the Treasury. That is having a major effect on the fiscal situation of the country. Will His Majesty’s Government encourage the Bank of England to hold these bonds to maturity, taking the carry cost rather than taking the hit from selling them in the market and crystallising an enormous loss?

In relation to the asset purchase facility and how that has worked over recent years, it is not His Majesty’s Government’s—or indeed the Treasury’s—intention to change the way in which that works with the Bank of England, but as with all measures, the Chancellor keeps everything under close review.

What I would say to those families is that the most damaging thing of all is to have inflation at 11%. Now we have reduced it to 3.2%, and indeed we expect it to go lower. Interest rates are also starting to fall. If the hon. Member is worried about families in her constituency, she might be extremely worried by the shadow Chancellor saying that if interest rates fall, it is somehow not a big deal. It really is.

May I encourage my right hon. Friend the Chancellor to revisit his decision to change the tax arrangements of furnished holiday lets in rural constituencies such as my own? Those businesses make an important contribution to the local economy, provide jobs and enhance the tourism offering. Indeed, they stop depopulation rather than adding to it. His decision is creating much concern among those who operate such businesses.

We recognise the important role that FHLs play in the tourism ecosystem right across the country. The problem was that there was not a level playing field with long-term lets. We are making sure that there will continue to be tax incentives and benefits from such letting, but they need to be on par with short-term and long-term lets.

The hon. Member is entirely right. That is why we froze fuel duty at the last fiscal event: a measure that costs £6.5 billion and will save the average driver £50.

May I place on record my thanks to the Chancellor, who in his Budget devoted funds to Bournemouth for a police violence reduction unit? Does he agree that these units have a track record up and down the country of tackling knife crime by not just seeing extra police on the frontline, but engaging with schools to ensure that youths and students understand the folly of carrying a knife in the first place?

My right hon. Friend is absolutely right: violence reduction units reduce crime and save lives. I want to thank him, because he was one of the first colleagues who, ahead of the Budget, brought to my attention how impressive the results are. As a result, I was able to make it a national policy in the Budget.

The hon. Gentleman is absolutely right to say that the Government are taking this issue very seriously, and we completely understand that speed is of the essence. It is now only a matter of days before the report will be published; we have always said that we want to publish our response very quickly after that and I assure the hon. Gentleman that we will not hang around.

The best way for a business to thrive and for customers to receive a great service is for companies to employ individuals on merit. Does the Chancellor agree that the recent overreach by the Financial Conduct Authority and the Prudential Regulation Authority regarding their equality, diversity and inclusion policies is a step too far, and that it is inevitable that those policies will have a negative effect on us all?

My hon. Friend makes an important point. It is important that the FCA bears in mind that it should not be distracted from its core focus on conduct and regulation by things that are more marginal for the people and businesses it oversees. I urge the FCA to take into account the representations made by my hon. Friend and by industry in that regard and many others.

The hon. Gentleman knows perfectly well that he has taken my comments out of context. I will tell him what is really out of touch: the shadow Chancellor saying it is not a big deal if inflation falls.

Cramlington has a world-leading pharmaceutical company, Organon, which employs 700 people and produces medicine for the UK market as well as abroad, with a particular focus on women’s health. Will my right hon. Friend the Chancellor please meet me to discuss the impact on pharmaceutical investment?

My hon. Friend is absolutely right. The pharmaceutical industry is worth some £14 billion to our economy. I am pleased to tell him that the industry has seen a twelvefold increase in equity financing in just the past decade, and I would be pleased to meet him to discuss that further.

Soaring rent costs are the biggest reason why my constituents in Bath are struggling. The average monthly rent in Bath and north-east Somerset has risen by more than £200 in the past three years. What support will the Government give to people who rent in the private sector?

That is why we need to build more houses. The hon. Lady will be reassured to know that we are building record numbers of houses—in fact, more in the last year than in any single year under the previous Labour Government.

May I say what a pleasure it is to be asked a question by my hon. Friend? I think this is the first time it has happened since he has been back. There is no more formidable a champion for Romford. He speaks about business rates, and we have indeed been doing what we can to bring them down at every fiscal event.

What steps have been taken to support pensioners to know what benefits they are possibly entitled to? I understand that 1.4 million people access pension credit, but a great many more are entitled to it.

The hon. Gentleman will know that this is an issue that is close to my heart, as a former Pensions Minister. We did a huge amount of work to increase the uptake of pension credit. I know that this matters a lot to Members, and work is being done in everyone’s constituency, including the hon. Gentleman’s.

The lifetime ISA is a positive instrument, but I understand that under its terms there are circumstances under which savers lose not only the benefits of the ISA but also part of their capital investment. That does not seem right; will the Minister please meet me to discuss it?

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.

On a point of order, Mr Speaker.

Is it related to Treasury questions?

Yes. In his response to me, the Exchequer Secretary said, “Any area that loses bank branches is entitled to get a banking hub”, but I have numerous examples of towns that lost bank branches, applied for a banking hub and then had their application rejected. Please could you advise me, Mr Speaker, on how I can get some clarity on this matter and what the Minister said about “any area that loses bank branches”?

Obviously, we cannot continue the debate. The hon. Lady has certainly put her point on the record. I do not think this will be the end of it; she knows how to carry it on through the usual channels, which I expect she will use, no doubt starting with the Table Office.

On a point of order, Mr Speaker. The Chancellor, in answer to my question, said that economic inequalities actually increased under the previous Labour Administration. A House of Commons Library publication released last month shows that that is categorically not the case. Would he like to take this opportunity to correct the record?

I believe the Chancellor would.

Further to that point of order, Mr Speaker. The hon. Lady may have misunderstood me. What I said was that economic inequality had fallen since the last Labour Government.