Treasury – in the House of Commons on 21st March 2023.
If he will make a statement on his departmental responsibilities.
This Conservative Government believe in the virtue of work, and that is why last week’s Budget set out to remove barriers for long-term sick and disabled, for jobseekers, for older people with our pension tax reforms, and for parents with the biggest expansion of childcare in memory.
With Orbital O2 in Orkney and MeyGen—the largest tidal stream site in the world—Scotland leads the way in tidal stream generation. That industry is at a stage where it needs to expand and scale up, but to do so, it needs a bigger ringfenced budget. In the renewables auction announced last week, the Government propose to halve the budget for tidal stream instead of increasing it. Will the Chancellor meet me to discuss the impact and the opportunities for business?
We are interested in giving support to all forms of renewable energy, and the Exchequer Secretary to the Treasury is very happy to meet the hon. Gentleman to discuss those issues further.
Delaying the lower Thames crossing will have a detrimental impact on Dartford’s economy and on its traffic problems, so does the Chancellor of the Exchequer agree that the completion of the lower Thames crossing is vital if we are to promote economic growth, not just in Dartford but throughout the south-east of the country?
I am grateful to my hon. Friend, who has met me on a number of occasions to make the case for the Dartford crossing. Obviously, in the current difficult circumstances with inflationary pressures, we have had to make some tough choices, but I want to be very clear with my hon. Friend: we remain committed to delivering it. This is a two-year delay on construction, not a cancellation, and I will continue to update him in due course.
I call the shadow Chancellor.
Confidence has been shaken by the recent bank failures and stock market falls across the world. Is the Chancellor confident that our ringfencing regime is adequate to protect taxpayers and depositors, when we have seen how fast these problems can spread? Can the Chancellor reassure the House that there are no other UK banks or subsidiaries that are vulnerable, and in light of recent developments, is he confident about the Financial Stability Board, or does it need to widen the number of banks regarded as systemically important?
I thank the shadow Chancellor for her question. The Government recognise that there is some volatility in the market, but we believe the UK financial system is fundamentally strong and UK banks are well capitalised. They now have core capital ratios that are three times higher than before the 2008 global financial crisis, but we continue to monitor the situation carefully.
I thank the Chancellor for that response, and am pleased that he continues to monitor the situation carefully, but the collapse of Silicon Valley Bank UK shows how our vibrant start-up sector—particularly in life sciences and tech—had become reliant on a single financial institution. The impact of these bank failures may be that other banks become more risk averse, restricting lending and raising interest rates, resulting in a credit squeeze, possibly even beyond the start-up sector. That would damage an already weak economy, so how will the Chancellor monitor the situation there and ensure that businesses have access to the long-term capital that they need to grow and to thrive?
The right hon. Lady is absolutely right to raise that issue. I said in the Budget that I would return with a full solution to those issues in the autumn statement, but ahead of that we will be making announcements on: pension industry reform, because we want to unlock the £5 trillion of assets in the pension industry; reforms to help companies scale up, so that they do not feel they have to move to other countries when they want to list; and, reforms to green finance so that people can access the capital they need. All those things will be a part of a comprehensive solution that we will be announcing shortly.
For quite some time, GPs and consultants in Birmingham tab="yes" have expressed their frustration and concern with the pension lifetime allowance cap. I welcome the measures in the Budget last week to abolish it altogether, which will mean that we will see more GPs and consultants practising. Does my hon. Friend agree that it will also mean we will see more teachers and headteachers in the classroom and more police officers on the beat?
My hon. Friend is absolutely right. The measure will help public servants, hospital consultants, prison governors, headteachers and senior police leaders, which is why I agree with Wes Streeting when he said that removing the cap would save lives and that he himself would scrap the “crazy” cap.
The Resolution Foundation recently found that if wage growth had continued on the same trajectory as pre-2008, the average UK worker would be £11,000 a year better off. Does the Minister accept that hard-working households can no longer afford to lose £11,000 a year as a result of this Government’s perpetual mismanagement of the economy?
I welcome the universal credit reforms we have made, and also the fact that under this Government, by raising the basic income tax threshold, we have taken up to 3 million workers out of income tax altogether.
I warmly welcome the Chancellor’s big decision to invest in childcare and the early years in this Budget. One witness to the Education Committee—a long-standing campaigner on these issues—said they were elated to see the commitment the Chancellor made. Going forward, may I encourage him to continue to listen to the concerns of the independent and voluntary sector, which is crucial to the success of reforms in this space? I know he is a fan of workforce plans, so may I encourage him to consider the case for an early years workforce plan?
I thank my hon. Friend for his campaigning on this issue. He has long been a voice for reforms to childcare. He is absolutely right that this is one of the biggest sets of childcare reforms we have ever seen. That is why we are taking two and a half years to scale it up. We want to make sure that parents who want to take advantage of the new free hours offer can get the supply of childcare they need, and we will listen very carefully to what the Select Committee says.
When the Chancellor chaired the Health and Social Care Committee, the British Medical Association told him that pension reforms just for doctors would be a fraction of the cost of what he announced in the Budget. Can he tell us precisely how many doctors the Treasury estimates will stay in work due to this untargeted tax giveaway for the top 1%?
It is not just about doctors leaving the profession, but doctors reducing their hours. The Royal College of Surgeons says that 69% of its members have reduced their hours as a result of the way that pension taxes used to work. Doctors themselves have welcomed the Budget warmly and as potentially transformative for the NHS.
On behalf of all the residents of Rother Valley and especially Dinnington, I thank the Chancellor for the £12 million that we got in the Budget out of the new fund for capital regeneration projects to revitalise our high street, taking out the burnt-out building and rejuvenating the whole high street. Of course, there are other high streets across Rother Valley, such as in Maltby, Thurcroft and Swallownest, that also need help. Can the Chancellor therefore look favourably on future applications for those high streets so that they, too, can get the money that Dinnington has so necessarily got?
I hesitate, because my hon. Friend is so effective in campaigning for his constituency. I am glad that we were able to confirm that extra £20 million in the Budget. We will continue to look with a constructive mindset at all the many bids that he brings forward to the Treasury.
At the same time as the Chancellor has been dishing out tax cuts for the pensions of the richest earners, the Tories are considering making millions of people work even longer than they had planned before they can get their state pension. Will the Chancellor today rule out changing the state pension timetable?
What the hon. Member forgets is that it is not just doctors or, indeed, millionaires who want to save for a decent pension pot; it is ordinary people, and that is who we are on the side of in this Government. When it comes to reforms to the state pension age, we follow a process that balances the interests of taxpayers and the interests of pensioners, and also looks at life expectancy.
Given that the Chancellor has protected the new hospitals budget, may I express the huge frustration of my constituents at delays in the announcement that the RAAC-ravaged—reinforced autoclaved aerated concrete-ravaged—Queen Elizabeth Hospital in King’s Lynn will be part of the programme and urge that decisions are announced as soon as possible?
Given that I answered this question five weeks ago, I admire my hon. Friend’s consistency. I very much regret that we have not been able to make that decision yet. As I think I said last time, it is a matter for the Secretary of State for Health and Social Care, and conversations have developed. We have made a commitment on the quantum of money, and I will leave it for my colleague to make that announcement imminently.
The head of the Institute for Fiscal Studies has said of the Chancellor:
“Continuing to muddle through, massage the figures, and implement poorly designed policies will only make the problems worse.”
That is a pretty damning verdict on his Budget, is it not?
It would be if his comment had not been quoted out of context, as the hon. Gentleman just did, because he also said that he could see in the Budget a growth plan and he strongly welcomed measures such as the childcare reform.
In the light of the current pressures on the international banking system, can the Chancellor give an assurance about and an update on the actions he will be taking to ensure that credit flows to small and medium-sized enterprises, our rural businesses and, indeed, start-ups, because at the end of the day they should never be penalised for the misdemeanours of large banks?
Yes, I can give my right hon. Friend that assurance. This Government are very keen to make sure that there is a strong flow of credit to the very smallest businesses in society.
OBR analysis of last week’s Budget has shown that there will be no real-terms growth in public services in 2023-24 and just 1% in 2024-25. Given the recent Patriotic Millionaires UK survey showing that more than seven in 10 millionaires want to have a fair tax on their wealth—by wealth, we are talking about £10 million of investable assets—will the Chancellor look at this?
What I say to the hon. Lady, whom I greatly respect, is that we did a lot for public services in the autumn statement, including a £3 billion increase in the annual schools budget and an £8 billion increase in the annual health and care budget. We are always focusing on public services, and we do support a progressive tax system.[This section has been corrected on
Will the Chancellor tweak the childcare initiative to enable families in which one parent wants to care for children full-time to have a realistic prospect of being able to afford to do so?
We think these reforms will make a big difference to all parents. Our priority is parents who want to work and who are prevented from working by the expense of the current system. I would remind my right hon. Friend that we still have a 15-hour free childcare offer for all parents, irrespective of whether they work, for three and four-year-olds.
Researchers at Warwick University and the London School of Economics estimate that the non-dom regime denies the Exchequer about £3.2 billion per year. Why did the Chancellor not take steps to abolish that in last week’s Budget, instead of creating more hoops for universal credit claimants to jump through?
We have looked very carefully at this, because we know that many in the House have been citing this figure. What concerns us about that analysis is that the study does not appear to take into account the behavioural ramifications of changing the current regime or of making it less competitive than that of our international partners. We do have to remind ourselves that non-domiciled taxpayers pay UK tax on their UK earnings to the tune of £7.9 billion.
The Leader of the Opposition led his charge against the Budget by saying that the UK was the sick man of Europe, yet the IMF shows that the UK had the fastest-growing economy in the G7 not just last year but the year before, and that since the Conservatives came to power in 2010 the UK has had the fastest-growing economy of the major economies in Europe. Does my right hon. Friend the Chancellor agree that, although there are clearly major economic challenges, there are many reasons—not least the tech sector in South Cambridgeshire—to be confident about the future of the UK economy?
I completely agree and, thanks to the brilliant efforts of the tech sector in South Cambridgeshire, we have now become the third largest tech sector in the world, after the United States and China, thanks to the Conservative Government.
My constituent Fiona Cooper was seeking to close the national insurance contribution gaps in her pension just before retirement and was frustrated that the advice she got about her missing years from HMRC needed validating by the Department for Work and Pensions. Does the Chancellor agree that one set of numbers is the cornerstone of any enterprise, and is he also frustrated that she has been advised that she will need to close full years before she can close part years?
If the hon. Gentleman would like to write to me about this, I will look into it, but I remind him that I issued a written ministerial statement recently, extending the deadlines precisely to help women in the situation he describes.
The Chancellor and I sat for three years on the Health Committee hearing evidence of just how restrictive the pension rules were for the likes of doctors. The fact that he has now been able to make that change is fantastic. Will he take that approach to dealing with some of the other red tape around retention and recruitment for other professions in the health service because, as the British Medical Association said, it is making a real difference?
Few people know as much about this issue as my hon. Friend, given his background in the NHS. He is right, and I know that my right hon. Friend the Secretary of State for Health and Social Care is looking closely at the issue of retention, which has an equally important role to play.
Industry stakeholders have been clear that Ministers must now focus on long-term solutions to support people with ongoing high energy prices through improved home energy efficiency. What steps will Ministers take to support households with the rising costs of energy in the long term?
The hon. Lady makes an excellent point. We have put in place a huge amount of support to help people through this immediate challenge with their energy bills, but we do need to think long term. That is why the Chancellor has put in place the 15% target to reduce energy consumption in both domestic and non-domestic buildings, but alongside that, and crucially, we have to increase the supply of UK energy, both renewables and in the North sea.
Thanks to the quick thinking and quick moves by the Chancellor, the Prime Minister and the Treasury, the tech sector was saved from almost certain oblivion, and at no cost to the taxpayer. Can my right hon. Friend confirm that he is still ambitious for the tech sector, and can he confirm that the merger with HSBC will ensure that our fantastic tech sector, especially our start-ups, will have access to the funding they need?
My hon. Friend is right. We have a very good solution to the Silicon Valley bank issue with the HSBC takeover. In the long run, we would like our brilliant tech superstar companies to have more choice about how they finance their expansion, and we will bring forward plans to make sure that happens.
On a point of order, Mr Speaker. The Minister said to me in her response that the Chief Secretary had just confirmed with her that we had signed the memorandum of understanding on regulatory co-operation with the EU. Could you please advise me whether she meant that both sides had signed and the agreement has been secured with the EU? I cannot find the details anywhere. Can you advise me where MPs are able to see the agreement?
Further to that point of order, Mr Speaker. I can confirm that we have always been ready to sign the MOU, from two years ago—[Interruption.] Well, we have made it very clear to the EU that we are ready to sign. It is a matter for it to come to the table, and we very much hope it will be able to do that. What happened was that as the Financial Secretary came to the Dispatch Box she did not quite hear exactly what I said, and for that I apologise on behalf of the Government. It was my fault.
I think that clears it up. The answer was no.