Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to paragraph 23 of the Bank of England Monetary Policy Committee's Monetary Policy Summary and the 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 increases in annual pay growth in (a) higher-paid sectors and (b) lower-paid sectors.
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.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to make the annual public sector pay review body recommendation the minimum amount that is offered for public sector pay awards.
Answered by John Glen
The Pay Review Body (PRB) process has operated for over four decades. It is a neutral process in which all parties play a role. Last year, this process resulted in the highest uplifts for public sector workers in over twenty years.
The Government continues to appreciate and value the independent advice of the PRBs.
The Government will consider the PRB reports for the 2023/24 pay year and awards will be announced in due course once the Government responds to the reports in the normal way.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the confidence of (a) employer and (b) employee representatives in the public sector pay review body process.
Answered by John Glen
The Pay Review Body (PRB) process has operated for over four decades. It is a neutral process in which all parties play a role. Last year, this process resulted in the highest uplifts for public sector workers in over twenty years.
The Government continues to appreciate and value the independent advice of the PRBs.
The Government will consider the PRB reports for the 2023/24 pay year and awards will be announced in due course once the Government responds to the reports in the normal way.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to hold direct negotiations with trades unions on 2023-24 public sector pay awards.
Answered by John Glen
The Pay Review Body (PRB) process has operated for over four decades. It is a neutral process in which all parties play a role. Last year, this process resulted in the highest uplifts for public sector workers in over twenty years.
The Government continues to appreciate and value the independent advice of the PRBs.
The Government will consider the PRB reports for the 2023/24 pay year and awards will be announced in due course once the Government responds to the reports in the normal way.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential implications for his policies on public sector pay awards of the increase in the Bank of England base rate to five per cent.
Answered by John Glen
The independent Pay Review Bodies (PRBs) provide recommendations on the pay awards for most frontline workforces including teachers, armed forces, and police officers. The PRBs consider a range of evidence when forming their recommendations, including the economic context facing the UK; and the Government’s inflation target.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the letter from the Chancellor of the Exchequer to the Governor of the Bank of England of 22 June 2023, what steps he is taking to help ensure that decreases in input costs are passed on to consumers.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
On 22 June 2023, the Chancellor of the Exchequer wrote to the Governor of the Bank of England recognising that high inflation is the greatest immediate economic challenge to address. The Chancellor of the Exchequer met with regulator Chief Executive Officers on 28 June 2023 to discuss what action they are taking to mitigate the impacts of high inflation and support the most vulnerable. He asked regulators to take immediate action in areas where their sectors can do more to help consumers.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make assessment of the potential implications for his Department’s policies of comments made by Karen Ward from the Chancellor’s Economic Advisory Council on 21 June 2023 on the potential effect of a recession on inflation.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Government recognises the challenges facing households due to the rising cost of living. Halving inflation by the end of this year is one of the Government’s key priorities. High inflation is also bad for the economy, in order to have high sustainable growth, we must first have low inflation. The Chancellor supports the independent Monetary Policy Committee of the Bank of England in raising interest rates, and doing whatever is necessary to drive down inflation and bring it back to the 2% target. The Office for Budget Responsibility (OBR) is the UK's official forecaster, and they will assess the changes in the macroeconomic outlook including the implications of Government policy, at the next fiscal event.
The Chancellor set up the Economic Advisory Council (EAC) as a forum to discuss issues in the economy, including the growth outlook and market conditions. Recent meetings have discussed short-term support to help the economy through 2023, and longer-term measures to grow the UK economy, as well how to increase labour market participation. A log of substantive contact was published in April here, which includes a brief summary of discussions for each meeting.
Asked by: Beth Winter (Labour - Cynon Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether the Treasury Economic Advisory Council has had recent discussions on the potential merits of the Bank of England creating a recession.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Government recognises the challenges facing households due to the rising cost of living. Halving inflation by the end of this year is one of the Government’s key priorities. High inflation is also bad for the economy, in order to have high sustainable growth, we must first have low inflation. The Chancellor supports the independent Monetary Policy Committee of the Bank of England in raising interest rates, and doing whatever is necessary to drive down inflation and bring it back to the 2% target. The Office for Budget Responsibility (OBR) is the UK's official forecaster, and they will assess the changes in the macroeconomic outlook including the implications of Government policy, at the next fiscal event.
The Chancellor set up the Economic Advisory Council (EAC) as a forum to discuss issues in the economy, including the growth outlook and market conditions. Recent meetings have discussed short-term support to help the economy through 2023, and longer-term measures to grow the UK economy, as well how to increase labour market participation. A log of substantive contact was published in April here, which includes a brief summary of discussions for each meeting.
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 a UK equivalent of the French Government's 'anti-inflation quarter' initiative.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Chancellor regularly engages with his French counterpart on matters of shared interest, which has included policy approaches to managing inflation.
High inflation is not a challenge that is unique to the UK, with many advanced economies having seen record levels during the past 18 months. Food inflation in the UK is in line with other European countries and is lower than in Germany – so the UK is not alone in being impacted by this. We are helping the most vulnerable – who are the worst affected by rising food prices – by providing cost-of-living support worth an average of £3300 per household over this year and last.
The Prime Minister has set out that halving inflation this year is one of his highest priorities, and the fiscal approach the government set out at the Spring Budget will help achieve this objective. The Office for Budget Responsibility (OBR) forecast that inflation will more than halve this year, falling to 2.9% by the end of 2023, before sustainably returning to target by the end of the forecast.
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 (a) design, (b) implementation and (c) impact on food price inflation of the French Government's anti-inflation quarter initiative.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Chancellor regularly engages with his French counterpart on matters of shared interest, which has included policy approaches to managing inflation.
High inflation is not a challenge that is unique to the UK, with many advanced economies having seen record levels during the past 18 months. Food inflation in the UK is in line with other European countries and is lower than in Germany – so the UK is not alone in being impacted by this. We are helping the most vulnerable – who are the worst affected by rising food prices – by providing cost-of-living support worth an average of £3300 per household over this year and last.
The Prime Minister has set out that halving inflation this year is one of his highest priorities, and the fiscal approach the government set out at the Spring Budget will help achieve this objective. The Office for Budget Responsibility (OBR) forecast that inflation will more than halve this year, falling to 2.9% by the end of 2023, before sustainably returning to target by the end of the forecast.