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.
T6. The Government’s plans for a carbon border adjustment mechanism will create a level playing field for British manufacturers facing un-green, high-carbon competition from abroad, but to comply with free trade rules, the CBAM must be an environmental measure, rather than revenue-raising trade protectionism. Will Ministers confirm that it will be fiscally neutral and that any net receipts will be returned to taxpayers, perhaps even by cutting fuel duty or green levies on energy bills?
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.
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?
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.
T8. The taskforce on nature-related financial disclosures came out with its framework last year. I would like an update on where we are with the International Sustainability Standards Board approach, because just as it has been a huge success for companies and for UK plc to switch to the recommendations of the taskforce on climate-related financial disclosure, it is vital for our planet that we also start to have the TNFD framework as standard right across the board.
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.
T2. We have all seen it: the richest Prime Minister in history has spent the weekend telling the public that his plan is working. Well, it is not working for people in Leeds East, whose taxes are going through the roof while our public services are on their knees. Would a better plan not be to go after the tax dodgers, rather than making ordinary people pay the price for this Government’s abject failures?
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.
T3. According to the Bank of England, a typical family remortgaging this year will pay £240 a year more in mortgage payments. Does the Chancellor accept that even if the Bank cuts rates, those homeowners will still be paying a penalty because the Government crashed the economy?
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.