Financial Markets and Monetary Policy

Jim Shannon Excerpts

Wednesday 5th July 2023 Commons Chamber

[Sir Robert Syms (Poole) (Con)]

It is a pleasure to be here and to see the Treasury Minister on the Front Bench for the debate. I appreciate that many of these matters are dealt with by the Bank of England, but that is part of the reason why I will raise a number of points.

I voted against quite a lot of lockdown, with one of the strong reasons being that if 7 to 9 million people were sitting at home and, at the same time, the Bank of England was printing substantial sums of money, there might well be consequences. We can see in inflation, the strikes and a number of other things the pernicious effect of money printing and inflation in the British economy.

During lockdown, the Government took on a substantial amount of debt. Many people who were sitting at home were paid reduced salaries, but they could not spend the money, so they built up substantial savings. There are debates among economists about the amount of those savings. Some think it is 4% of GDP; others 8%. The Office for Budget Responsibility puts the figure at around £228 billion. That has been powering the economy over the past several months. The OBR initially predicted that we would have a recession, but the economy has shrugged that off. It is highly likely that this year we will not have a reversal. We may have a cost of living crisis in pay and inflation, but there is still a substantial amount of money flowing through the British economy.

The amount of money printed and the fact that people were not producing anything have created a problem. As we saw from headlines last week, one of the reasons that inflation is sticky is that money is still flowing through the economy. Headlines last week reported that package holidays were more expensive because they were not being discounted. Second-hand cars are going for quite a high rate. Although hospitality has had problems with high energy bills, it is difficult in many areas to book a restaurant or a hotel. The discounting that we would normally see at certain times of year is not happening, which is why inflation has not fallen as much as we expected. Nevertheless, supermarkets suggested today that food prices are starting to fall, and energy prices are falling. I think it highly likely that inflation will fall, although it will be a little delayed.

There is a lot of money swishing around in the British economy. The Bank has been pushed into raising interest rates. The thing about interest rates is that, unlike 20 years ago when most people had variable rates, a lot of people are now on fixed-rate mortgages, especially those with larger mortgages. Therefore, there will be a lag, as there always is when interest rates are put up, but this time it will be substantial. My concern is that most of the impact of raising interest rates on the economy has not yet been felt. Every now and again, the Bank will feel pressured to keep raising rates, particularly at a time when financial markets test the Bank and we have a 24-hour news cycle. That will be a problem for the British economy because raising rates will not make much difference to the next financial year, but will have a big effect in 2025.

A number of people have expressed concern that we may have overkill in raising rates. Andrew Haldane, the Bank of England’s chief economist a while back—a very good economist with a good finger on the pulse of the British economy—is worried that the Bank will overdo it. David Smith wrote a good article in The Times today, in which he said “a little patience” needs to be shown. We will have a testing time over the next 12 to 18 months, because raising rates will not show up much in reduced spending in the shops, and there will be various pressures on the Bank to act.

What we actually need is masterful inactivity and a lack of action, to let things continue. We will have a fall in inflation. We will probably go to real interest rates, which we do not have at the moment. The Bank needs to keep calm, have patience and allow inflation to fall, and that will do the job that needs to be done, but it will take a particular while. There is pressure in the markets. Today, two-year gilts were sold at 5.668%, which is the highest for 20 years. The markets will keep on testing the Bank.

That is my first concern. I know that the Chancellor of the Exchequer rightly has regular meetings with the Governor of the Bank, although I am not sure they have cocoa or a glass of claret. The message from the Treasury and from Parliament has been, “Be patient. Do not get yourself pushed into raising rates and causing a major reversal in 18 months or two years’ time.” In the short term, there will be an effect on the economy in terms of housebuilding and the construction industry, but I suspect it will not have much of an impact on budgets until that time passes.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for raising this complex matter. He is outlining the issues for the banks and talking about ensuring patience and balance. My constituents tell me that they are worried about mortgage increases, as I am sure are his constituents and everyone here tonight. They worry about all the things he refers to, as well as increasing prices. What would he say to those worried constituents who might not have such patience and do not know whether they will have possession of their house in a year’s time?

[Sir Robert Syms]

Interest rates are a very blunt instrument and I am sure many people are worried. I hope that if inflation picks up trajectory and goes down, we will start to see interest rates top off and that some with fixed mortgages—many have quite long fixed mortgages—will feel much more relaxed. To pay tribute to the Chancellor, he has, with the lenders and in a very competent way, produced a very good package of forbearance for those who may have problems with mortgages. The Government have, in many respects, set a very stable environment for the economy, but there are worries. My principal worry about the Bank, independent as it is, is that it may overdo interest rate rises.

My second point concerns quantitative easing and quantitative tightening. Clearly, we did more QE than was probably needed, but we are where we are and it needs to be reversed. If you are going to try to eat an elephant, you have to do it one bite at a time. It will take us 20 to 25 years to reduce the stock of bonds that the Bank of England holds, and what I do not understand is why the Government are not having a more active discussion with the Bank about when it will sell the bonds. We have a situation where the Bank has put up interest rates, that leads to a fall in bonds and at the same time the Bank sells bonds, creating a loss that it passes on to the Treasury. Whereas if it waits three or four months, inflation is likely to fall and some pressure may come off bonds, and that may mean that it is able to sell bonds for a slightly higher amount.

Now, whether there is a sort of hair-shirted virility symbol in doing that, I think selling bonds into a market where you will lose more than you would otherwise do is not really very good husbandry. Ultimately, although the Bank holds the debt, as the Government are the underwriter of the debt, it is a little bit like saying to your estate agent, “Go and sell the house, I don’t care what the price is.” The Government should have a view so that when we discuss things with the Bank, we ought to try to do our best to minimise the losses on quantitative easing as we reverse the process. Some projections say that over the next 20 years the loss could be £100 billion. Well, if we are very careful in how we get rid of the bonds and it is a £90 billion loss, then that is a win.

Mrs Thatcher always had a problem that when she was trying to control broad money there were no instruments apart from higher interest rates, but if we have this stock of bonds over the next 20 years, it might well be that it could form a part of policy that we either speed up or slow down to reduce broad money. It might be something that can be used in policy terms. My view is that the Debt Management Office—which has an interest because it has to sell Government debt, and the Bank of England selling it at the same time does not help—the Governor of the Bank of England and the Chancellor really ought to sit down a couple of times a year and agree a joint letter that sets out the parameters for how they will unscramble quantitative easing with a quantitative tightening programme, which I think the markets would understand. I do not think anybody would think we were infringing on the independence of the Bank of England if we were actually trying to ensure that the taxpayer gets best value.

On almost anything, any budget or taxation, the Treasury is very careful in approving things. This could be a big budget item each year for the next several years, so I do not know why we are taking a relatively benign attitude of saying to the Bank, “Just sell it and we’ll pay the bills.” I should say that I was a Lord Commissioner for a while and I signed some of the documents that indemnified the Bank. [Interruption.] There is probably another Lord Commissioner laughing, but we ought to pay quite careful attention to how we unscramble this. Those who read the column by my right hon. Friend the Member for Wokingham (John Redwood) will know that he has raised this matter a number of times. It is worth raising, because we are at the early point of unscrambling quantitative easing, and slightly more interaction between the Government and the Bank of England is necessary.

My final point is about money supply. During the pandemic, we were printing money at 20%. Then the money supply dropped a little, to about 15%, and now it has dropped very substantially. M2 is nearly into negative territory, and according to the last Bank of England estimate, M3X and M4X are growing by between 1% and 2%. Too much money in the economy is a bad thing because it creates inflation, but too little money in the economy is a bad thing because it can cause a credit crunch. In his book on the Wall Street crash, John Kenneth Galbraith pointed out that the principal reason for the major worldwide depression was the fact that money in the United States economy declined by a third. That is what pushed the economy over the edge, because the banking system essentially collapsed.

We have gone from an over-exuberant money supply situation to one in which money supply is barely growing. This is not unique to Britain; it is a feature in the eurozone and in the United States, and we know that the eurozone will have further problems. Those countries still have differentials in productivity and trade imbalances, and there is money swishing through their system as well. There was even some discussion about the Bundesbank having to be bailed out because of bonds it has bought—and, unlike the Bank of England, it cannot print money because it does not have a currency.

There is a worldwide problem. Money supply is falling in the United States, in Europe and in the United Kingdom. If we assume the normal 18 months to two years, that takes us into 2025. My principal point is that if we raise interest rates, which has an impact after a long lag that will hit at the end of 2024 and the beginning of 2025, and if we have a reduction in monetary growth and credit which has an impact at the end of 2024 and the beginning of 2025, there will be two interactions that could cause growth to hit a brick wall.

The economy has changed substantially over the years. We now have internet banking, money flows very freely, and we have digital currencies. I think we ought to be looking much more carefully at what is going on in the British economy, and, indeed, at how money supply affects real output. However, I think we also need a monetary policy; I do not think we should withdraw completely and allow the Bank of England to determine these matters, and that may require us to look at levers to ensure that credit and monetary growth go up.

What I really want to do this evening is to put it on the record for those at the Treasury that if they read Twitter, they will find that many monetarist economists are beginning to think that the decline in money will cause severe economic dislocation. The rule of thumb is that there should be a smooth transition of money, not sharp falls or sharp rises, and I fear that we are not getting a smooth transition of money. As I have said, that is a feature of all the various zones, and it is something that the Government need to pay attention to and not ignore.

The Government do not mention money supply very much. The Bank of England has started to talk about it again, but I suspect that we have to learn what Mrs Thatcher would have told us some years ago: that money is very important, and it is a very important part of economic policy. We cannot totally vacate it and leave it to central bankers. One reason I always opposed the euro was that I did not think the problems of the world could be solved by unelected central bankers, and I think some of that goes for our own unelected central bankers.

The next time the Minister sees the Chancellor, I hope he will ask him to read the report of this debate and reflect on the fact that there is a problem with money supply. We may be going into a new era, although I do not know whether the supply will continue to be negative or whether it will pick up, and the Chancellor needs to have discussions with other actors in this area. If we are not careful, the combination of the lag on interest rates and the current credit squeeze could give an incoming Conservative Government a real nightmare in due course, in terms of the way in which they manage the economy. So let us give these matters a little thought.

I look forward to the Minister’s reply. Probably, in accordance with the normal Treasury line at the moment, he will reply by not saying very much, but I am sure he has listened.

Mortgage and Rental Costs

Jim Shannon Excerpts

Tuesday 27th June 2023 Commons Chamber

[Rachel Reeves]

I very much thank my hon. Friend for that intervention. She is absolutely right: the people being hit are those who are having to re-mortgage; those who are on floating rates and are just seeing their payments automatically go up; first-time buyers who want to be on the housing ladder but, because of this bombshell, are not able to get on it; and renters, who are paying the higher mortgage payments of their landlords. She is right to say that we need Labour’s renters charter, in order to do a number of things, including ending no-fault evictions.

Families facing the increasing squeeze from their rising mortgages are now having to confront that stress and anxiety day in, day out. For many, this will mean that their family holidays are cancelled this year; they will watch hard-earned savings drain away; and they will decide that they can no longer afford to spend money on days out with friends and family. For others, it could be much worse, with them not moving up the housing ladder, but slipping down it, through no fault of their own. The scale of the impact of all of this is devastating.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Lady and the Labour party for bringing this debate forward. Every one of us, including my constituents, is dealing with the same problems. Some people contacted me last week to say that their mortgage rates are going up from £400 to £800, while others have said that theirs are going up from £600 to £1,200. It is just impossible to find that amount of money. Does she think that perhaps the Government—I look to them when I say this—should be looking at mortgage tax relief? That is one direct method of helping people to retain their houses and their dream of home ownership, and to survive this crisis.

[Rachel Reeves]

The hon. Gentleman speaks powerfully and I recognise those stories of people seeing their mortgages double because of what is happening. I will come on to the solutions proposed by the Labour party, but it is important that money is not injected into the economy at this time. If that happened, interest rates would go up even more, crippling the hopes and opportunities of exactly those we want to help. I will come on to the solutions that we propose shortly.

Over the next few years, 7.5 million families will be hit by the Tory mortgage bombshell, month after month after month. That is why it is essential that greater mortgage flexibility and support from lenders must be mandatory, not voluntary as the Government have put forward.

Consumer champion Martin Lewis warned the Government about mortgage market issues last year, and he now says “the timebomb has exploded”, yet under the Government’s scheme, 1 million households are missing out. What is the Government’s response to them? Tough? It is up to the discretion and the goodwill of their lender? That is not good enough.

Although it is welcome, as I said, that many lenders are stepping up and doing the right thing, the scheme cannot be voluntary. That is why, when Labour set out our mortgage package last week, we made sure that that would be compulsory, across the board, and required of lenders. That is right: required of lenders. Without that clarity and confidence, families are rightly anxious about what comes next and how it will affect them.

Mortgage Charter

Jim Shannon Excerpts

Monday 26th June 2023 Commons Chamber

[Jeremy Hunt]

The hon. Gentleman is right to draw attention to that issue, and I simply say that the biggest measure in the spring Budget was the childcare measure that will mean families with young children can get up to £6,500 of help with their childcare costs to help them go back to work. That will help those families and help to tackle inflation.

[Jim Shannon (Strangford) (DUP)]

I thank the Chancellor for his statement and for the clear help he is trying to provide. I very much welcome the move to ensure that, in the extreme situation of a repossession, there will be a minimum of 12 months from the first missed payment. Can he confirm whether it will be 12 months from any first missed payment or 12 months from a specific time? Some people may have missed a payment, say, five months ago and missed none since. If they lose their job or become ill, will this extension and compassion be shown if more than one payment is missed within a year? How will the Chancellor ensure that his goal of giving people time in exceptional circumstances is not circumvented by the banks and others?

[Jeremy Hunt]

The hon. Gentleman is right to raise this issue. I reassure him that banks are required by the FCA to offer a tailored solution to people who get into arrears, specific to their circumstances, to make sure that precisely the kind of thing he worries about does not happen.

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 20th June 2023 Commons Chamber

The Chancellor of the Exchequer was asked—

[Jim Shannon (Strangford) (DUP)]

1. Whether he has held discussions with banks on the costs of implementation of Financial Ombudsman Service decisions.

[The Economic Secretary to the Treasury (Andrew Griffith)]

The Financial Ombudsman Service offers a proportionate and informal resolution of disputes that is cost-free for consumers. Where it upholds a complaint against a firm, it can award redress for that concern to that consumer. I work very closely with my officials and with the Financial Ombudsman Service to make sure consumers have the justice they require.

[Jim Shannon]

I thank the Minister for that that response. This has been an ongoing issue in the House for some time, and I spoke to some of the Minister’s colleagues beforehand. The Chancellor and the Minister will know that the parliamentary ombudsman found that 1 million Equitable Life savers lost money as a direct result of Government decisions. Why, then, are the Government holding themselves to a different standard and ignoring the wishes of the parliamentary ombudsman, having paid victims of the Equitable Life scandal only 22% of the money they lost from their pension funds? I say that with great respect, but I do think we need an answer.

[Andrew Griffith]

I respect the hon. Member for raising this issue. It has however, been raised many times before in this House, and answered from this Dispatch Box as well.

--- Later in debate ---

[Mr Speaker]

I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

I do not have a question.

[Mr Speaker]

Right, let us move on.

Bank Closures: Stoke-on-Trent North

Jim Shannon Excerpts

Wednesday 14th June 2023 Westminster Hall

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

I beg to move,

That this House has considered bank closures in Stoke-on-Trent North constituency.

It is a pleasure to serve under your chairmanship, Ms Nokes. I am grateful to Mr Speaker for permitting the debate, and I thank right hon. and hon. Friends, including the Minister, for attending. There is one Member who would like to be here—my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell), whose constituency is also suffering a closure—and he is hoping to join us later, and I place on the record my thanks for my hon. Friend’s support.

Banks are at the very heart of local communities, and they provide the most vulnerable people in society with vital services and support with their money. Banks have been at the centre of high streets up and down this great country for generations, drawing people to the local area, which has the added benefit of increasing footfall for local businesses. In Stoke-on-Trent North, Kidsgrove and Talke, we have a Lloyds in Tunstall and a Barclays in Kidsgrove, but constituents tell me that they feel there is already a significant lack of access to in-person banking services, which impacts the most vulnerable in our communities—the elderly and the disabled—disproportionately.

According to Which?, 86% of banks have closed in Stoke-on-Trent North, Kidsgrove and Talke since 2015, which in my opinion justifies my constituents’ concerns. At the national level too, there has been a significant number of closures: between June 2015 and January 2023, 5,391 bank branches closed in the United Kingdom, which is a shocking 54 per month. This year, regrettably, the pace of closure has not relented, with 114 HSBC, 95 Barclays, 52 NatWest and 23 Lloyds branches closing their doors, leaving gaping holes in local high streets and local communities.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this matter forward. My constituency has had 11 banks close, which is similar to the experience in Stoke. When it comes to closing banks and the effect that has, does he agree that there never seems to be any consideration given to elderly people who depend on the old system of using cash and cheque books, face-to-face interviews and talking with bank staff?

[Jonathan Gullis]

The hon. Gentleman is absolutely right not only about the elderly, but about people who do not have online access, or have no desire to have it, or who do not understand the modern technology about which we have the benefit of learning in this day and age. Such people have a natural mistrust of online banking because they are fearful of scammers and the online hoaxes that have sadly become all too apparent in our criminal justice system. If the Barclays closure goes ahead, Stoke-on-Trent North, Kidsgrove and Talke will be left with just one high street bank, which is simply not good enough.

I am pleased to have secured the debate given the terrible news that Barclays has announced its intention to close the Kidsgrove branch on 11 August. That decision will leave that great town without a single bank and leave the community isolated from vital in-person banking services, which provide local people with reassurance and confidence with respect to their money, particularly during a cost of living crisis.

It is right to point out that digitalisation has transformed the way that families and businesses deposit, withdraw and save their money, and in Stoke-on-Trent we have been rolling out brand-new 5G broadband, which is increasing our connectivity, and which will undoubtedly make online banking more effective. The digital revolution means that banks are innovating, and Barclays points out in its argument for closing the branch that

“the way people bank today is unrecognisable from 50 years ago”.

However, it is of paramount importance that we do not let digitalisation exclude people in our community from banking services.

The services that bank branches provide are most important for vulnerable members of society, and closures impact them the most. One of my constituents, Dawn from Kidsgrove, told me that her father, who is an elderly customer, would find it “impossible” to travel to Crewe or to Hanley to visit a Barclays branch, that his deafness means he cannot use telephone banking, and that he is not confident enough to use internet banking.

As the Chief Secretary to the Treasury pointed out in the 2020 access to cash call for evidence:

“exclusion from banking services can have a detrimental impact on people’s lives. Whilst card payments and other payments services are becoming increasingly popular, the evidence shows that a significant proportion of the UK population continues to rely on cash in their day to day lives.”

The Financial Conduct Authority states that banks are expected to carefully consider the impact of planned branch closures on the everyday banking and cash access needs of their customers, and to take particular care for their most vulnerable customers.

I have launched a petition to save Barclays branch from closure, and it has nearly 450 signatures already. That shows the strength of local feeling that Barclays is not upholding its responsibility to look after its most vulnerable customers.

Mortgage Market

Jim Shannon Excerpts

Tuesday 13th June 2023 Commons Chamber

[Madam Deputy Speaker]

No, you are not. That question is finished. There is a danger that the House might not be able to hear the question from the hon. Member for Strangford (Jim Shannon).

[Jim Shannon (Strangford) (DUP)]

There is no danger of that when you are in the Chair, Madam Deputy Speaker.

I thank the Minister for his answers to some very difficult questions. It has been said that 1.5 million households, including some of my Strangford constituents, are set to come off fixed mortgage deals this year and face a sharp rise in their monthly repayments—up to 1.56 percentage points from Tuesday. Has the Minister made an assessment of the impact on those who are considering buying their first house in the next year or so, and will he assure the House that discussions are taking place with local banks on what we can do to support people through the process of buying their first homes amid shocking price increases?

[Andrew Griffith]

Let me be clear: the Government understand—I understand—the anxiety of those who have a mortgage, those who have invested in their home and those who wish to do so. That is why we will do everything we can—be it providing financial support to the tune of £94 billion, or making good decisions about our stewardship of the economy and not coming up with unfunded spending commitments—to ensure that we get back, as quickly as possible, to a world of falling interest rates and falling inflation, and support those who wish to buy a home above their head.

Cryptocurrency Regulation

Jim Shannon Excerpts

Tuesday 13th June 2023 Westminster Hall

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

I beg to move,

That this House has considered the regulation of cryptocurrency.

It is a pleasure to serve under your chairmanship for the first time, Mrs Harris, and to see you in your rightful place.

As chair of the crypto and digital assets all-party parliamentary group, I am delighted to be able to talk about the potential of the UK cryptocurrency and digital asset sector, and the need for clear regulation to protect consumers, which should be at the core of everything we do, and to support investment.

Just over a year ago, in April 2022, the UK Government set out their landmark vision to make the United Kingdom the global hub for cryptocurrency investment, committing to creating the right conditions for cryptocurrency and digital asset businesses to set up and scale up in the UK. Shortly afterwards, in August 2022, the APPG launched an inquiry to better understand the opportunities that a regulated industry could bring to the UK, as well as the challenges and potential barriers for Government in making their vision for the UK a reality.

Just last week, we published our report “Realising Government’s vision for the UK to become a global hub for cryptocurrency & fintech innovation”. Our inquiry looked at a number of key areas, including the potential for the UK to be a global hub for investment; the UK’s approach to regulation and the role of UK regulators in consumer protection; the potential offered by central bank digital currencies; and the risks of economic crime. We heard views from operators, regulators, industry experts and the general public—the Advertising Standards Authority, Innovate Finance, the City of London Corporation, the Payment Systems Regulator, the Royal United Services Institute, the Law Commission and many others—on the need for regulation of this ever-growing sector. I put on the record my thanks for their input and help in formulating our recommendations.

The APPG’s report is the first on cryptocurrency and the digital assets industry compiled jointly by MPs and Members of the House of Lords, and I thank colleagues in both Houses for their invaluable contributions. We set out more than 50 recommendations, which we hope will establish a foundation for further discussion. The Minister will be pleased to hear that I will not go through them all today, but I will focus on some of the report’s key findings.

It is clear from our work so far that the growth of cryptocurrency and digital assets presents a number of potential opportunities and that the UK is well placed to realise them, but that will require cross-Government strategic planning.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing the debate—we have become good friends in the House—and I thank her for all she does on this topic. Reports in 2019 indicated that Colu, a tech firm based in Israel, had developed a potential new cryptocurrency for Belfast City Council. There has been much discussion in this place of how cryptocurrency will be regulated across the UK. Does she agree that for the United Kingdom to become a leading force in crypto, regulation must be UK-wide, led centrally from Westminster, and that UK-wide discussion is the only way to achieve safe regulation?

[Dr Cameron]

I thank the hon. Member for his contribution. Yes, much of this will be led by the Treasury, and I imagine that regulation will be streamlined right across the United Kingdom. I am pleased to hear about developments in Northern Ireland; there have been many in Scotland, too. I spoke to Scotcoin not that long ago. This area has enthused and motivated people right across the United Kingdom, and it is important that we collaborate in order to realise its potential.

Oral Answers to Questions

Jim Shannon Excerpts

Tuesday 9th May 2023 Commons Chamber

[John Glen]

My hon. Friend is tireless in his advocacy for his constituents. The areas of England that are eligible to host an investment zone were identified through a rigorous analytical assessment that reviewed every place in England and shortlisted based on their strengths in innovation, productivity, potential and levelling up need, as well as the strength of local leadership, knowledge assets and sectoral strengths.

The borderlands area is already benefiting from the £452 million borderlands growth deal, which was signed just two years ago and aims to create 5,500 jobs. My hon. Friend is also familiar with the recent £134 million investment signed off through the housing infrastructure fund, leading to 10,325 homes in St Cuthbert’s garden village.

[Jim Shannon (Strangford) (DUP)]

The Minister mentioned the four investment zones, including one for Northern Ireland, in his opening answer. Of course I make a plea for my constituency, as everyone will. What discussions has he had with the Department of Finance back home about a potential investment zone in Strangford, to ensure that people in my constituency can have the same opportunities as people across the United Kingdom?

[John Glen]

I think the whole House will agree that the hon. Gentleman must be the most effective advocate for his constituents. We will see what happens. There will be a rigorous process, including wide consultation, and we expect to have an outcome that benefits his constituents and people across Northern Ireland.

Finance (No. 2) Bill

Jim Shannon Excerpts

Committee of the whole House
Tuesday 18th April 2023 Commons Chamber

[Victoria Atkins]

I acknowledge my right hon. Friend’s experience, not only at the Dispatch Box but, importantly, in the world of accountancy and business. I reassure him that the Treasury keeps all taxes under review. He is right to draw attention to clause 6, which maintains the small profits rate because, precisely as he says, we want to encourage small businesses that are in the first flourishes of profit and help them to build.

There are two measures that I hope will reassure my right hon. Friend. First, the small profits rate means that 70% of businesses will see no increase at all in their corporation tax charges. Because of the threshold that he describes, a further 20% will fall into that spectrum, so only 10% of businesses will face the full 25% rate. If they invest in their businesses and in plant and productivity, as we very much want and encourage them to, they will—depending on their returns—be eligible either for the full expensing capital allowance that the Chancellor announced alongside this measure at the spring Budget or for the annual investment allowance. This Budget was very much about encouraging growth and encouraging the small businesses on which my right hon. Friend the Member for North West Hampshire (Kit Malthouse) so rightly focuses, but we are doing so as part of a responsible fiscal approach and making sure that those with the broadest shoulders bear the greatest burden of tax.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for outlining the provisions on corporation tax. Obviously corporation tax will be the same everywhere, but in the light of the peculiar circumstances in Northern Ireland—the region is much more under pressure when it comes to jobs—can she reassure me and my constituents back home that small businesses in Northern Ireland will feel the benefits of what she is putting forward?

Fuel Costs: Rural Households and Communities

Jim Shannon Excerpts

Wednesday 29th March 2023 Westminster Hall

[Angela Crawley]

The hon. Lady is absolutely right. Although I welcome the fact that the Government recognised that there is a need, the response has been too slow. In reality, people, especially pensioners, had no more money on which to draw to pay up front. That has had a knock-on effect on many households, in particular many of mine in rural Clydesdale.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for bringing this subject forward. I agree with her, but it is not just about fuel; it is also about rural isolation. Does she agree that rural social isolation in the farming community is compounded by the rise in fuel costs? Going to young farmers’ club events, or something similar, does not boil down to finding time; it is about whether people have the resources to go. We need not only look at rural households and their fuel costs, but offer greater support to the farming community than it currently receives.

[Angela Crawley]

I thank the hon. Member, as always, for his intervention. He makes an important point. I am truly blessed to be the representative for Lanark and Hamilton East, which is home to a very wide and diverse community, including Clydesdale, the Clyde valley, which has a large population of farms. That community has been adversely affected by these costs.

With all due respect to the Government, there is little that can be done in retrospect to ease the impact this issue has had on livelihoods. Issuing alternative fuel payments months after households have already put fuel orders on credit cards or taken money out of savings to cover the costs does not make sense. It is all well and good for households that have wriggle room or back-up savings, but many do not, as we all know. Rural households are often occupied by pensioners reliant on their pension as their only source of income. They may not have the means to stretch their budget any further.

There are still households that are eligible for the alternative fuel payment but have not yet received it. The picture is even bleaker for those who are not connected to the gas grid and rely on electricity to heat their homes. They are not eligible for the alternative fuel payments, despite the latest fuel poverty statistics indicating that households using electricity as a main source of fuel for heating have the highest likelihood of experiencing fuel poverty.