Oral Answers to Questions

Nigel Huddleston Excerpts

Tuesday 7th May 2024 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

17. What recent assessment he has made of the potential impact of his tax policies on living standards.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Thanks to a combination of national insurance cuts and above-inflation increases to thresholds since 2010, the average worker on £35,400 will pay more than £1,500 less in personal taxes this year. In addition, maintaining fuel duty rates at their current levels represents a further £13 billion benefit to households over the three years since the introduction of the freeze.

[Kerry McCarthy]

The Minister will know that people are still really struggling with the cost of living crisis. One way that the Government could help is by seeking a bespoke veterinary agreement with the EU. That would not only cut costs for businesses but stop food prices rising even more. A future Labour Government would do that, so why will the Government not commit to it?

[Nigel Huddleston]

The hon. Lady’s first comment was correct: everyone in this House recognises the extreme cost of living challenges over the past few years, and that is precisely why the Government have adopted the strategy of a laser focus on inflation, combined with tax cuts and, recently, national insurance cuts. We have a very constructive and positive relationship with the EU, and are always engaging with it on a variety of matters.

[Paul Blomfield]

In the run-up to last week’s elections, the Prime Minister never stopped talking about national insurance cuts, and the Minister talked about them again today, but the Government have been giving with one hand and taking away with the other. Does the Minister recognise that according to the Resolution Foundation, the combined impact of all the Government’s tax changes leaves workers who earn less than £26,000 a year worse off? Will he apologise to workers in South Yorkshire, whose average earnings are close to that level, for misrepresenting the position?

[Nigel Huddleston]

Of course we recognise the challenges for those on the lowest incomes, which is precisely why we have adopted a whole bunch of other measures, including on housing allowance. If the hon. Gentleman is so opposed to the national insurance cuts that we introduced, why did the Leader of the Opposition support them?

[Mr Speaker]

Congratulations, Mr Chishti, on your engagement at the weekend. You are not crossing the Floor, I understand.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Most definitely not!

It has just been said that there is a real cost of living challenge, and that is absolutely correct. A key part of that relates to the war in Ukraine, which poses real challenges for energy supplies to the United Kingdom. As a former Minister who applied sanctions to Russia and looked at the oil price cap, I know that we need to ensure that what happens in Ukraine is offset by actions that hold Russia to account and address the cost of living. The US has seized Russian assets to pay for the reconstruction of Ukraine; the UK should do the same. That would help ease the burden on the UK economy and the taxpayer.

[Nigel Huddleston]

It is always a pleasure to see my hon. Friend in his place. He raises a variety of really important issues that show precisely why we work across Government—there are multiple Departments involved—on matters relating to sanctions. The invasion of Ukraine has had an incredible impact around the world, not just in the UK. Everybody in this House should welcome the fact that, because of action taken by this Government and the Bank of England, and other measures, inflation is now falling and will soon hit target.

[Mr Speaker]

I call the Opposition spokesman.

[James Murray (Ealing North) (Lab/Co-op)]

The Conservatives’ decisions in this Parliament mean that the average family will face a tax bill that is £870 a year higher, and pensioner taxpayers will pay £960 a year more. The director of the Institute for Fiscal Studies said:

“This remains a Parliament of record tax rises.”

Higher taxes, squeezed living standards and weaker public services—that is the Conservatives’ legacy. Does the Minister understand why the country has lost confidence in them?

[Nigel Huddleston]

Many people in this country remember the abysmal economic performance of the last Labour Government. The tax-free allowance was £6,475; it is now £12,570. More than 1.5 million people have been taken out of paying income tax altogether. The Government have a focus: now that the economy is turning, we want to put more money into people’s pockets. That is exactly what we are doing with the national insurance cuts and other measures, and I am surprised that the hon. Gentleman does not welcome that.

[John Penrose (Weston-super-Mare) (Con)]

5. If he will use outcome evaluations to assess the effectiveness of the Public Sector Productivity Programme.

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[Andrew Rosindell (Romford) (Con)]

14. Whether he plans to reintroduce VAT-free shopping for international visitors.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

As stated in the spring Budget, the Government are considering the findings of the review by the Office for Budget Responsibility of VAT-free shopping, alongside industry representations and broader data. We continue to welcome further submissions and representations in response to those findings.

[Andrew Rosindell]

Data from Heathrow, the United Kingdom’s largest and busiest airport, shows that despite a near-full recovery in passenger volumes post lockdown, retail spend on affected goods is 32% below pre-pandemic levels. That figure is shocking. Heathrow airport joins hundreds of businesses in calling on the Government to reintroduce VAT-free shopping for tourists, or similar incentives. Will the Minister acknowledge the figures, listen to the industry and reinstate that popular policy, as British businesses are demanding?

[Nigel Huddleston]

My hon. Friend will be pleased to know that I will not only listen to the industry, but I met Heathrow just last week to hear its representations. The challenge is the way that modelling, and forecast and behavioural changes can be confidently assessed. Government estimates suggest that a worldwide scheme could cost as much as £2.5 billion. The challenge is the so-called deadweight cost that could happen by subsidising spending that otherwise would exist anyway, versus the incremental benefit that we could get from new visitors coming to the UK. Of course that is a behavioural change based on a tax change. It is based on a variety of assumptions, and therefore the modelling and assumptions underlying it vary, but I am listening to all representations.

[Mrs Heather Wheeler (South Derbyshire) (Con)]

16. What assessment he has made of the impact of raising the high income child benefit charge threshold on household incomes.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

The high income child benefit charge threshold was raised to £60,000 on 6 April 2024. The point at which child benefit is fully withdrawn was also increased to £80,000, and the Government estimate that that will take 170,000 families out of paying the charge in 2024-25. The Government also plan to administer HICBC on a household rather than an individual basis by April 2026.

[Mrs Wheeler]

I have been contacted by many South Derbyshire parents who are caught in this unfair situation. Can the Minister be even more precise about the savings that this will now mean for my affected constituents?

[Nigel Huddleston]

I thank my hon. Friend for her comments and continual interest in this area. The changes to the high income child benefit charge mean that almost half a million hard-working families will gain an average of £1,260 towards the cost of raising their children in 2024-25. She will recognise that that is a meaningful difference for her constituents, and for those across the country.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T1.   If he will make a statement on his departmental responsibilities.

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[Richard Burgon (Leeds East) (Lab)]

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?

[The Financial Secretary to the Treasury (Nigel Huddleston)]

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.

[Sir Jacob Rees-Mogg (North East Somerset) (Con)]

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?

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[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

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.

[Nigel Huddleston]

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.