Topical Questions

On Friday, the Office for National Statistics published an update to the UK’s GDP growth figures, which shows that the UK economy was 0.6% larger than pre-pandemic levels by the fourth quarter of 2021. It means that our economy had the fastest recovery from the pandemic of any large European economy, thanks to decisions such as furlough that protected millions of jobs. For that growth to continue, we need to halve inflation, which I am pleased to report is now nearly 40% below its 11% peak. I can also tell the House that I will deliver the autumn statement on 22 November.

Staying on the subject of pubs, Carshalton and Wallington is also lucky to be home to some excellent pubs, including the Hope, which is this year’s Campaign for Real Ale Greater London pub of the year recipient. Will the Chancellor expand a bit more on the work that the Treasury is doing to support pubs not just in the tax system but further afield, and will he join me in wishing Carshalton and Wallington’s pubs good luck in the local pub of the year competition later on?

I very much wish my hon. Friend’s local pubs the best of luck in that competition, second only to my desire to encourage South West Surrey pubs to do well. I want to reassure him that we believe that pubs are central to our national life. That is why we have provided relief on business rates of up to 75% for pubs, and as we heard earlier, the Brexit pubs guarantee helps on their duty pricing.

I call the shadow Chancellor.

Last week, thousands of parents were told that their children’s schools were unsafe and at risk of collapse. The defining image of 13 years of Conservative government: classrooms propped up to stop the ceilings from falling in. Capital budgets have halved in real terms since 2010, with warnings ignored and repair programmes slashed. Do this Conservative Government take any responsibility for any of this?

Let me start by reassuring the right hon. Lady that the vast majority of pupils in the 156 schools affected are at school normally, and we are acting fast to minimise the impact on the rest.

Let me answer the more general question that the right hon. Lady raised. Yes, we made cuts in spending in 2010 because, as she knows well, the last Labour Government left this country with an economic crisis. Despite that crisis, the Department for Education budget has gone up by 15% in real terms, and overall capital spend—

Order. This is topicals. All your colleagues on both sides of the House want to get in. Topicals are meant to be very short, not a full debate between both sides. I say to everybody: think about others. I think we can move on. I call Rachel Reeves.

I will repeat: capital budgets have halved in real terms since 2010. I understand—indeed, I know—that in the lead-up to the 2021 spending review, the Department for Education made a submission to the Treasury about the dangers of the deteriorating school estate, including from reinforced autoclaved aerated concrete. Those warnings were ignored by the then Chancellor—the current Prime Minister—and we have seen the consequences, so will today’s Chancellor do the right thing and publish the Department for Education’s submission to the last spending review?

Capital spending at the Department for Education went up 16% in real terms in that review. Is the difference not that, with the fastest recovery in Europe, the Conservatives build an economy that can pay for our schools and hospitals, and Labour runs out of money?

It is very simply this: since 2010, we have become the strongest economy in Europe in film and television, life sciences and technology, and the opportunities are great with a Conservative Government.

I do not accept that characterisation at all. I do understand the impact of mesothelioma, as my father died of it, but this Government have invested £15 billion to keep schools safe since 2015, and the Chancellor has set out other figures as well.

I thank my hon. Friend for his question, which I take very seriously. Just to put it in context, last year HMRC received 38 million telephone calls; around 3 million of those were to do the simplest of tasks, which can be done digitally if at all possible. If we are able to move people on to digital channels, that will free up at least 500 people to help with more complex tax affairs and help the most vulnerable. This is a period of transition for the organisation, and one that we take very seriously.

We stepped in during the energy crisis with £94 billion of support, including the energy price guarantee, which effectively paid for half of people’s energy bills. That was important while energy prices were high; wholesale gas prices have now come down.

During the summer, we announced that we have given directions to the Financial Conduct Authority in respect of access to cash: it should be no more than 1 mile in an urban area, and no more than 3 miles in my hon. Friend’s rural constituency of North Warwickshire. That is the first time that the statutory right of access to cash has existed in law.

I have not heard that matter raised before, but I am very happy to take it back and correspond with the hon. Lady on it. Obviously, we have taken advice on the state pension age and have made clear our policies previously, but I am happy to look at any specific cases she raises.

My hon. Friend is absolutely right to raise that issue. I actually had a breakfast with clean energy industry representatives this morning to discuss their concerns. There is a huge amount of potential investment, and he is right to say that maximising the use of our own oil and gas reserves during transition is a vital part of our energy security policy.

Will the Chancellor consider introducing a windfall tax on banks’ excess profits? The profits of the big four banks for the first half of this year were up 700% compared with 2020, yet the Bank of England is forecast to pay out as much as £42 billion in interest on reserves to banks in 2023, at the same time as the Government have cut the level of surcharge on banks’ profits by 60%.

With millions of British jobs dependent on financial services, including an estimated 20,000 jobs in Brighton and Hove, I hope the hon. Lady will join me in celebrating a sustainably profitable financial sector. It is only that that gives us the ability to invest in skills and technology.

I call the Chair of the Treasury Committee.

Will the Economic Secretary update the House on the progress he is making to enable our constituents to access personalised financial guidance if they are among the 93% of our constituents who cannot afford regulated financial advice?

My hon. Friend, the Chair of the Treasury Committee, makes a really important point about what is called the advice gap. Treasury officials, the FCA and I are consulting on that, and I will publish an update this autumn.

It has been revealed that Integrated Debt Services, a company set up by the UK Government to recover personal debt, saw its profits increase by a staggering 132% last year. Do Ministers think it is right that this company should be able to profit to that extent out of the misery of the cost of living crisis?

The hon. Gentleman is referring to a company that works with the Government’s Crown Commercial Service and that works on debt across central Government. It has to operate within a very specific framework and, indeed, it is regulated by the Financial Conduct Authority. I very much understand the point he has raised, and I will be making inquiries on that point myself.

Research and development tax credits are vital to help businesses grow and invest, but I have received a large number of complaints from businesses across Essex saying that they are facing complexities and delays in processing claims with HMRC. May I please ask the Minister to meet me and some of these businesses to work through the delays and ensure that these businesses can continue to thrive and grow, because they are vital to our economic growth?

I would be delighted to meet my right hon. Friend and those businesses. In fact, the UK is leading world economies with our focus on life sciences and on tech. In that little golden triangle between Oxford, Cambridge and London, we have more tech businesses than anywhere else on the planet other than New York and silicon valley. I hear the cheers opposite, so keen are Labour Members to support British business, but I would be delighted to meet her and to underline the support that this Government give to such important businesses.

I welcome the new focus on engaging pension funds with productive investment, after many years when regulation has pushed the funds into Government gilts instead, but does the Minister have proposals specifically to secure those investments for UK businesses rather than their going overseas?

The right hon. Member makes a significant contribution to the debate about the nation’s pension funds. Our objective to increase investment—to drive increased returns for pension savers, but also to benefit the wider economy—stops short of mandating. There is a philosophical difference between this side of the House and the Opposition. We do not believe it is right for the Chancellor to tell pension funds where to invest, but it is our job to knock down barriers, frictions and impedances to pension funds investing in brilliant British companies.

The Economic Secretary told my hon. Friend the Member for North Warwickshire (Craig Tracey) that he is going to underwrite the statutory right of access to cash, but 6,000 bank branches will have closed by the end of the year, leaving only 4,000 in place, and 15,000 ATMs have closed in the last five years. How is he going to make sure that this actually happens, rather than it just being an empty promise?

The FCA has significant sanctions in respect of the closure of ATMs that would leave communities without the right of free access to cash. On the closure of bank branches, we are seeing a significant change, and I hope my right hon. Friend would respect the fact that technology is changing and consumer patterns are changing. During the recess, I had the privilege of visiting the excellent community banking hub in Brixham, which I think is a brilliant opportunity. There should be more than 100 on their way, and that is my objective.

Does the Chancellor accept that many people see income tax rates at the moment as exceptionally punitive, and does he also accept that there is a need to move as quickly as possible into a growth-based economy and to supercharge our economy in the United Kingdom?

As a Conservative, I want to bring taxes down as soon as we can afford to do so, and I am very proud that for the first time ever people can earn £1,000 a month without paying a penny of tax or national insurance.

As we want to expand our financial services industry not only in this country but abroad, we need to build confidence among consumers that the right thing to do is invest. Does my hon. Friend therefore agree that it is vital that regulators respond to and deal with complaints to them and actually impose sanctions against those who breach the regulations?

Yes, I agree with my hon. Friend on this matter. It is one reason why we have beefed up the role of the financial regulators review commissioner, and we will also be requiring the regulators to publish regular operating metrics on their performance, to give consumers the trust they need.

Back in 2017, both the Treasury and the Financial Conduct Authority knew there were problems with the prepaid funeral plan market. Since then, my constituent Gary Godwin of Nantyglo lost over £6,000 to the collapse of a company called Safe Hands. Across the UK, thousands more have lost millions of pounds altogether. Will the Minister please meet me to discuss this scandal and Mr Godwin’s case?

Yes, I will be very happy to meet the hon. Gentleman. What happened with Safe Hands is a scandal, and that is why we have enlarged the regulatory perimeter to bring those who seek to sell funeral plans within the regulatory conduct.

Over the summer ports have been bidding to the Government’s infrastructure fund to help them get ready for the delivery of the new floating offshore wind industry. May I encourage Ministers to look favourably on the bids from the Celtic sea ports of Milford Haven and Port Talbot, because those two ports are key to unlocking the enormous economic benefits of this new clean energy industry?

I am absolutely happy to do that, and I agree with my right hon. Friend about the enormous potential of those areas.

Some GP practices are at risk of being priced out of city centres, including in places like St Albans, because of outdated Treasury rules that prevent integrated care boards from spending the money they want to on a GP practice location. Health Ministers have confirmed to me that their officials are happy to work with Treasury officials. May I ask for a personal assurance from Treasury Ministers that they will encourage their officials to look at this and resolve it by the end of this year at the absolute latest?

Dialogue is ongoing on this matter and I can confirm that we will continue to work on this in the coming weeks.

Andy Haldane, the former Bank of England chief economist, recently said in a Sky News interview that the Bank of England kept on printing money for longer than it needed to. It is clear that central banks across the world have been addicted to cheap money and that this has contributed to inflation across the world. Does the Chancellor agree that printing cheap and easy money has not been without consequence, and instead our monetary policy must focus on important growth factors such as productivity?

I agree with what my hon. Friend says. The Bank of England itself has said there were problems with its inflation forecasting. It is learning the lessons from that and we must support it every step of the way as it brings down inflation.

Sorry I was late today, Mr Speaker: British Airways cancelled my flight.

When the Chancellor’s predecessor, now the Prime Minister, was Chancellor there was huge fraud in the bounce back loans. Has he got any of that money back yet?

We are always ferociously determined to recover money obtained through fraud, but because of those bounce back loans we have the fastest recovery of any major European country.

I have recently been contacted by several self-employed constituents expressing concern about heavy fines being imposed for filing tax returns late even though no moneys are owed. Will the Treasury meet me with a view, perhaps, to reviewing this policy?

I will of course be happy to meet my hon. Friend. I hope he understands that I cannot intervene personally in any case, but I will of course look at the general principle he sets out and see whether there are systemic issues here.