Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Environment, Food and Rural Affairs:
To ask His Majesty's Government, following reports that water companies plan to raise customer bills by up to 70 per cent over the next five years, what assessment they have made of the impact of those rises on (1) household budgets, (2) consumer spending, and (3) overall economic stability; and what steps they are taking to mitigate any such challenges.
Answered by Lord Douglas-Miller - Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs)
The public have made it clear clean and plentiful water supply and environmental protection is a priority. New infrastructure will need to be paid for, and while water companies can attract private investment, this will also need to come from customer bills. There is a balance to be struck in terms of priorities – ensuring there is prioritised spending on infrastructure to reduce environmental harm and secure supplies for the future without unduly hitting billpayers with a big rise.
All water companies submitted their proposed business plans for Price Review 2024 to Ofwat in October 2023, which set out planned investment and proposed bill increases for 2025-2030. These are now undergoing scrutiny by the independent regulator Ofwat to ensure they meet the targets for environmental improvements and other obligations, whilst also offering value for money for consumers. As such, current reports of increases to bills over the next five years are not yet confirmed. Increases will be confirmed after Ofwat’s final determinations are published later this year, and new price controls will then come into force from 1st April 2025.
We are committed to a water sector that delivers for customers, the environment and wider society, and recognise that some households may struggle to pay their water bill in full. All water companies offer reduced bills for eligible customers via the WaterSure scheme and social tariffs as well as a range of other financial support measures. We are continuing to work with industry to explore options to improve existing social tariff arrangements.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Transport:
To ask His Majesty's Government what assessment they have made of the role of hydrogen technology in reducing aviation carbon emissions to net zero by 2050, and what steps they are taking to accelerate the adoption of hydrogen-powered aircraft.
Answered by Lord Davies of Gower - Parliamentary Under-Secretary (Department for Transport)
The Government’s Jet Zero Strategy, published in July 2022, set out our approach to achieving net zero UK aviation by 2050 through multiple different measures. The use of hydrogen is considered in the Zero Emission Flight chapter of the Strategy.
The Strategy anticipates that hydrogen will be first deployed in short haul aviation with recognised uncertainty on the potential for and timing of its scaling up for use in long haul. As with all measures in the Jet Zero Strategy the Government keeps the evidence base under regular review and any changes will be reflected in future updates to the Strategy.
Between 2013 and 2030, industry and government will invest over £5 billion to develop transformational aircraft technology through the Aerospace Technology Institute Programme. This includes co-investment in industry led projects to develop hydrogen aircraft in the UK.
In 2022 a Delivery Group of the government and industry forum the Jet Zero Council was established to accelerate the adoption of zero emission flight.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, further to the announcement by the Chancellor of the Exchequer on 2 March concerning the requirement by 2027 for pension funds to disclose how much they invest in British businesses, what steps they are taking to assess the potential consequences on overall competitiveness and attractiveness of the UK as an investment destination.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The Chancellor announced at Spring Budget that the government will introduce new requirements for Defined Contribution pension funds to disclose publicly their level of UK equity investments, working closely with the Financial Conduct Authority (the FCA) who share responsibility for setting requirements for the market. The FCA will consult in the Spring. The government will introduce equivalent requirements for Local Government Pension Scheme funds in England & Wales. The government will review what further action should be taken if the data does not demonstrate that UK equity allocations are increasing.
This complements the wider reforms that the Government and regulators are already undertaking to boost UK markets.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they are considering to mitigate the potential inflationary effects of the increase in the National Living Wage and the National Minimum Wage.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
In March 2020 the Office for Budget Responsibility estimated that meeting the National Living Wage target of 2/3rds of median earnings by 2024 would increase the level of consumer price inflation by less than 0.1 per cent across that period. Evidence shows employers respond to minimum wage increases in a variety of ways, most commonly by absorbing the additional cost and accepting lower profits.
Inflation reduces real incomes, creates uncertainty, and slows economic growth. It’s essential that the government continues with its efforts to keep inflation down. Inflation has more than halved, falling from its peak of 11.1% in October 2022 to 3.4% in February. The OBR forecasts that inflation will return to the 2% target in the second quarter of this year, a year earlier than forecast in November.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, following reports that the economy returned to growth in January after entering a recession in the second half of 2023, what steps they are taking to (1) support, and (2) sustain positive momentum in, sectors of the economy which have shown signs of growth in 2024.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The government is pursuing an ambitious policy agenda to increase growth and productivity across the economy. This includes making full expensing permanent, a tax cut to companies of over £10 billion a year, to ensure the UK has one of the most generous capital allowances regimes in the world and backing the UK’s priority growth sectors. At Spring Budget 2024, the government set out the next steps in delivering a £4.5 billion funding package for strategic manufacturing sectors over the five years to 2030 and announced over £1 billion of new tax reliefs for creative industries.
The IMF forecasts that the UK will have the third fastest cumulative growth in the G7 over the 2024-2028 period and the OBR expects that policies announced in the previous three fiscal events will increase the size of the economy by 0.7% by 2028-29.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, following reports that public expectations for inflation have fallen to the lowest level in over two years, what assessment they have made of the impact of falling expectations on (1) wage growth trends, and (2) employment dynamics; and what steps they are taking to address any potential challenges in sustaining wage growth while maintaining price stability.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Inflation has more than halved, falling from its peak of 11.1% in October 2022 to 3.4% in February 2024 and nominal whole economy total pay has fallen from a peak of 8.9% in the three months to June to 5.6% in the three months to January 2024.
In the three months to January 2024 the unemployment rate was 3.9%, up by 0.1ppt on the year but low by historical standards. The OBR forecast that there will be a moderate rise in unemployment to a peak of 4.5% in Q4 2024 before declining to 4.1% by 2028.
Whilst inflation has fallen it still remains above the 2% target. The Monetary Policy Committee (MPC) continues to have the government’s full support as it takes action to sustainably return it to target.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the Department for Levelling Up, Housing & Communities:
To ask His Majesty's Government, following reports that mortgages in arrears hit a seven-year high in the final quarter of 2023, what assessment they have made of the impact on (1) housing stability, and (2) homelessness rates.
Answered by Baroness Scott of Bybrook - Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)
The Government is closely monitoring levels of arrears and repossessions, which remain low by historic standards. Affordability assessment and stress testing of mortgage applications is helping ensure households do not move into arrears.
Lenders representing over 90% of the market have agreed to our Mortgage Charter, which includes new flexibilities to help customers manage their repayments over a short period. This is helping to support vulnerable households.
Financial Conduct Authority (FCA) rules require lenders to engage individually with their customers who are struggling or who are worried about their payments in order to provide tailored support.
The Government has also put in place measures aimed at helping people to avoid repossession, including Support for Mortgage Interest (SMI) loans, protection in the courts through the Pre-Action Protocol, and the Housing Loss Prevention Advice Service (HLPAS).
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of slowing wage growth on household finances and consumer spending; and what steps they are taking to mitigate any negative impact.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Real wages have increased for seven consecutive months and are 1.1% above their pre-pandemic level.
ONS retail sales volumes increased by 3.4% on the month in January, representing a full recovery of the decline seen in December 2023.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government, following the publication of the draft Payment Services (Amendment) Regulations 2024, what steps they are taking to introduce legal safeguards to protect consumer rights and ensure transparency in the process of delaying payments for further investigation.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
The government takes the issue of fraud very seriously and is dedicated to protecting the public from this devastating crime.
The government has published draft legislation that allows the sending of payments to be delayed where there are reasonable grounds to suspect fraud or dishonesty, and more time is needed to contact the customer or relevant third parties.
Subject to some exceptions to ensure Payment Service Providers (PSPs) meet other legal obligations, for example around tackling financial crime, PSPs will be obliged to inform the customer, set out the reasoning behind a delay, and what information or actions are needed to enable the PSP to decide whether to execute the payment.
The government intends to introduce this legislation in summer 2024 and, subject to Parliamentary approval, for it to come into force on 7 October 2024.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the potential (1) costs, and (2) benefits, of reintroducing tax-free shopping for international visitors, including the impact on (a) retail sales, (b) employment levels, and (c) economic recovery.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
As set out at Spring Budget 2024, the government is considering the findings of the OBR’s review of the original costing of the withdrawal of tax-free shopping, published in the Economic and Fiscal Outlook on 6 March, alongside industry representations and broader data. The government welcomes further submissions in response to the OBR’s findings.