Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with which providers he has held recent discussions on uprating of savings rates; and when these discussions took place.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
On the 28 of June the Chancellor met with regulators including the Financial Conduct Authority. An agreement was secured to ensure that regulators act urgently in areas where consumers need most support and to ensure they are treated fairly. The Chancellor also regularly meets with senior bank representatives, and discusses a range of issues; as reported in the press he raised savings rates with bank chief executives at his mortgages roundtable on 23 of June.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of requiring savings account providers to pass on interest rate rises in full to savings customers.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The pricing of products, including savings accounts, is a commercial matter for firms in which the Government does not intervene. However, the Chancellor has made clear his expectation that savers benefit from rising interest rates. He has tasked the Financial Conduct Authority to report later this month on how the savings market is supporting savers to benefit from higher interest rate.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made with Cabinet colleagues of the potential merits of removing VAT from energy suppliers standing charges.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited by both legal and fiscal considerations.
The Government recognises that families should not have to bear all of the VAT costs they incur to meet their needs, with domestic fuels such as gas, electricity and heating oil already subject to the reduced rate of VAT at 5 per cent of VAT.
The Government's package of support to help households with their energy bills is more generous than an additional VAT cut on the standing charges for domestic fuel and power, and there would be no guarantee that suppliers would pass on the discounts from this relief to all customers.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to page 6 of the Working Paper by the International Monetary Fund entitled Euro Area Inflation after the Pandemic and Energy Shock: Import Prices, Profits and Wages, published June 2023, what assessment he has made of the implications for his policies of the analysis by the Fund of the potential effect of the level of corporate profits on real wages; and if he will take steps to limit the potential inflationary impact of corporate profits on wage growth.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.
That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the finding in the International Monetary Fund working paper entitled Euro Area Inflation after the Pandemic and Energy Shock: Import Prices, Profits and Wages, published in June 2023, that (a) domestic profits account for around 45 per cent and (b) labour costs account for around 25 per cent of inflation in the Euro area, if he will take steps to reduce the potential impact of corporate profit on levels of inflation.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.
That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the finding in the Bank for International Settlements' Annual Economic Report, published in June 2023, that some catch-up in wages would be compatible with inflation returning to target if firms accept a reduction in profits, if he will take steps to reduce the potential impact of corporate profit on levels of inflation.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.
That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the finding in the Bank for International Settlements' Annual Economic Report, published in June 2023, that firms are now more reluctant to accept profit squeezes and will pass on cost pressures to prices more readily, if he will take steps to reduce the potential impact of corporate profit on levels of inflation.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.
That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of establishing a mechanism to monitor the potential impact of (a) corporate profit levels and (b) dividend and buyback payments on inflation
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.
That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the potential impact of levels of (a) corporate profit, (b) share dividends and (c) share buybacks on inflation.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.
That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference paragraph 39 of the Bank of England Monetary Policy Committee's Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 21 June 2023, what assessment he has made of the potential implications for his policies of that report's predictions for the rate of average weekly earnings growth for the rest of 2023.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The latest Office for National Statistics data indicates that annual total pay growth (including bonuses) was 6.5% in the three months to April.
The National Living and Minimum Wage rate was adjusted this April, in line with the recommendation from the independent Low Pay Commission (LPC). In light of this, we expect to see over 2 million workers earn a pay rise, and a further 4 million workers could indirectly benefit from said rise. We expect this increase to the minimum wage will put more money in the pockets of over 2.5 million of the lowest-paid people in the country.
The Government’s priority is halving inflation this year, on the path back to the target of 2% CPI. Our commitment to this target is iron-clad and it applies at all times. The Bank of England has the Government's full support as they take action to return inflation to this target through their independent monetary policy decisions, in line with the primacy of price stability in the Government’s monetary policy objective. The Monetary Policy Committee will continue to monitor closely indications of persistent inflationary pressures in the economy as a whole, including the tightness of labour market conditions and the behaviour of wage growth and services price inflation.