Economic Growth

Roger Gale Excerpts

Tuesday 14th November 2023 Commons Chamber

[Mr Deputy Speaker (Sir Roger Gale)]

I inform the House that Mr Speaker has selected amendment (m) in the name of the Leader of the Opposition. I call Rachel Reeves.

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[Several hon. Members rose—]

[Mr Deputy Speaker (Sir Roger Gale)]

Order. Some 40 Members are seeking to contribute to the debate, and we have until 6.30 pm. After the Scottish National party spokesperson, I propose to introduce an immediate time limit of six minutes, which may have to fall to five. I call the SNP spokesperson.

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[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Treasury Committee.

Environmental, Social and Governance Developments

Roger Gale Excerpts

Monday 23rd October 2023 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Andrew Stephenson.)

[Mr Deputy Speaker (Sir Roger Gale)]

I am not sure whether the hon. Gentleman is aware, but one of the arcane practices is that because the Adjournment debate started before 10 o’clock, we had to move the motion again at 10. The hon. Gentleman has the Floor.

[Alexander Stafford]

Thank you for that guidance, Mr Deputy Speaker, and for explaining some of the wonderful aspects of this House.

I ask the Minister whether he will ensure that investors have a framework to separate the sustainable from the spurious, and whether he will take this chance to outline the full timetable for the taxonomy. He will have plenty of time to do so, as we have more time for this Adjournment debate. I look forward to a full and detailed timeline of when we will get this taxonomy. I am willing for him to intervene now if he so wishes. Clearly he does not.

Perhaps another, less discussed difficulty facing ESG is imbalance. The heavy focus has been on environmental considerations as being the most important, often at the cost of social and governance factors. Let me refer to one recent example of the consequences of failing to take that holistic approach. Dame Alison Rose is clearly a champion for socially sustainable business, particularly around gender equality. She is a torchbearer for women in business, having smashed the glass ceiling to become the first woman to lead a major UK bank. However, despite her very strong credentials in social sustainability and the progressive environmental policy of NatWest Group as a whole, under her leadership there was a clear failure in governance when discussing a customer’s private banking details with a journalist—I think that we all know the gentleman I am referring to.

I am sure that all Members will agree that it is right that Dame Alison resigned over that abject failure of governance, but I also know that many will join me in expressing our disappointment that the further empowering of women in business and entrepreneurship will suffer because of that failure of governance. Excelling in one area does not absolve someone from indiscretions in others. The E, S and G cannot and should not be separated; a failure in one is a failure in them all. Clearer metrics and frameworks, both within each strand of ESG and encompassing all three elements, will allow for better reporting and therefore better understanding for investors and companies. That will, in turn, return the trust that ESG has been lacking.

It is easy to oversimplify the true impact of more data and disclosures, and we cannot ignore the practical implications of such policies, particularly on smaller businesses and individual investors. Since the turn of the millennium there has been a 647% increase in ESG regulations, alongside miles of other red tape in all shapes and sizes. The disclosure burden on investors and businesses is bigger than at any previous point, leading to whole sectors and teams devoted to auditing every aspect of a business. The EU’s own research indicates that its disclosure requirements will cost large firms upwards of €100,000 a year in paperwork alone.

Likewise, the UK green taxonomy, when it is eventually published, will join about 30 other environmentally focused taxonomies across the globe, each needing different types of disclosures. Large companies may be able to absorb that, but it is a potentially lethal issue for small and medium-sized enterprises, which make up 99% of British businesses and have a far more limited staffing and budgetary ability to process those types of disclosures. In pushing for more comprehensive reporting frameworks, we should not bury small businesses under piles of paperwork.

Over the course of my time chairing the all-party parliamentary group, I have been delighted to meet many small businesses that want to integrate ESG into their practices. Many of them, however, have expressed to me their nerves about how to keep up with a continually changing regulatory landscape, and the addition of further disclosures hangs like a dark cloud, so how do we achieve better ESG reporting without overburdening businesses and, perhaps more importantly for those businesses, why should they engage in this space? How do we make ESG work for businesses rather than making businesses work for ESG?

In this debate, I have mostly spoken about ESG as a risk management tool that investors can use as part of their normal investment analysis. There are, however, many upsides for both businesses and the UK as a whole. I have already outlined how a business might utilise ESG to increase efficiency or improve its workforce. For the UK as a whole, though, SMEs are the perfect vehicle for public policy objectives to be achieved without the need for public sector financing or burdensome legislation.

The all-party parliamentary group’s latest report—on women in business, to be published tomorrow—is perhaps a good example. It is a sad fact that women are still under-represented in business today. That is not only a social problem; it also represents a £250 billion gap in our economy. Luckily, as in other areas, the private sector is far ahead of policymakers here. Thanks to private firms and independent groups, the UK has one of the highest levels of female representation on boards in the world; it is beaten only by countries that have legislated to force companies to adhere to quotas. Top-down government can make serious strides, but the home straight will always require us to rely on great British businesses. We cannot let them down.

ESG adds value to business, but it cannot become a barrier. Many Members will, like me, have heard concerning reports about some companies, particularly those involved in defence, being excluded from access to investment and capital on ESG grounds. As the Government’s defence Command Paper points out, there is no contradiction between investing along ESG principles and the defence industry.

I have already spoken about the concerning anti-ESG movement, much of it stemming from the view that a movement for divestment in such contentious businesses is because of a political stance. Again, I argue that that is a mischaracterisation of ESG. Instead, and like the Government, I believe that ESG allows investors to factor in the environmental, social and governance impacts of these firms into their decision-making process and helps firms to take action that will result in better returns. These factors should not be unduly taken out of context for political reasons.

Governments need to create an environment where businesses can disclose problem areas without the fear of backlash, so long as they are responsible. Good investors can be a driving force behind companies cleaning up their acts. We must continue to ensure that all businesses have access to the capital they need from reputable, interested investors. We have seen continued protests as part of an environmental campaign, calling for businesses to divest away from oil and gas. But that would actually be detrimental to the world’s overall climate ambitions.

Once contentious industries such as oil and gas, defence, tobacco or alcohol can no longer rely on investment from large, public companies that are open and clear about their business ethos, they will most likely leverage finance from less savoury investors. It is in our interests to engage, not divest, and make sure that trusted investors retain a hand on the wheel of these industries, to steer them to a more sustainable and better future.

The issue is not just about a handful of industries. When faced with challenges that may bring public and investor backlash, all firms need to feel secure that they are able to disclose bad practices and work to rectify them, rather than quietly divesting of the malpractice. I will give one example: the International Labour Organisation estimates that there are nearly 50 million modern slaves across the world today. It is almost impossible, therefore, for any large company not to use modern slavery at some point in its supply chain. As much as 20% of worldwide cotton production stems from slave-labour—Members in the Chamber today could be wearing slave-manufactured clothing.

What should a responsible clothing business do if it discovers that it has been accidentally buying slavery-produced goods? Should it quietly switch suppliers and hope that the next one does not have the same problem, or should it work with the supply chain to end the practice of slavery? Divestment for fear of repercussions will not solve environmental, social or governance problems, and companies should not be penalised for bringing accidental wrongdoings to light.

Making ESG work for businesses requires that they should be able to show investors what they are doing to tackle poor business practices without fearing that they will be left without access to capital. The frameworks we build must include room for transitional sustainability improvements, allowing investors and companies to own up to their failings and work to improve them, rather than divesting and passing the problem along.

Having outlined why we should be encouraging ESG, what problems we face in doing so and how it can help business, investors and the UK as a whole, we must now ask what real action we can take to achieve this. I have in this debate referred consistently to frameworks or metrics, which will give certainty and clarity, but what form should they take? Any framework needs to be credible, useable and, importantly, international. What is more, we need to act quickly to ensure that the UK is the go-to place for ESG. Will the Minister be sure to look into speeding up the publication of frameworks and regulations designed to restore trust in ESG?

The importance of credibility in a framework was confirmed by the EU’s recent green taxonomy failures. As Members will know, the EU decided to include natural gas in its green taxonomy, effectively allowing any product using energy derived from fossil fuels to claim it was “green.” That is perhaps the most serious and egregious example of greenwashing, and it completely undermines any pretence that the EU’s taxonomy can be relied upon to build the trust that I have been so clear we need. Our own framework, and certainly our own green taxonomy, must not have the same problem. Can the Minister assure me that any framework will be science-led, and that ensuring trust will be a key consideration in the design of those frameworks? We may be delayed in our green taxonomy, so ours may not be the first, but let us make it the best. Let us learn from the mistakes made by other countries so that the UK is the gold standard.

Going further, if the UK is to be the ultimate home for ESG, we need to create metrics for ESG criteria that are currently unquantifiable. Much of the work that has already taken place has gone into fleshing out areas with existing data, but in order to ensure that greenwashing cannot happen across any element of ESG, we need to drive forward progress on creating standardised metrics for areas such as biodiversity, community impacts, management structures and so much more. To ensure that the UK is truly world-leading, will the Minister be sure to speak to his colleagues at the Department for Environment, Food and Rural Affairs and the Department for Work and Pensions to create cross-governmental taskforces that will be able to create those types of framework?

Usability is also vital. As I have mentioned, particularly in reference to SMEs, burdening investors and businesses with extra regulation should not be the objective of any Government, let alone a robust Conservative Government. Any framework must allow for companies to disclose failures and work hard to redeem themselves. Companies’ work to achieve better results should be what they are judged by, rather than their failures. To encourage businesses to use ESG to their advantage along the lines that I have described, and so that the UK can leverage the firepower provided by our booming private sector, will the Minister ensure that making the UK an ESG hub will not have negative impacts on businesses and investors? We must look after SMEs.

Today’s supply chains, employees and financial flows span the world. It is our duty as policymakers to help British businesses and investors benefit from being part of the global economy. When it comes to ESG, that will mean working with the frameworks of our international partners and using our Brexit freedoms to design a system that allows for international co-operation. The Government’s signal earlier this year that we will be adopting wholesale the international financial reporting standards created by the International Sustainability Standards Board is a great start and will ensure that we remain international players, but I want us to be international leaders, especially as the EU will continue to build its own full disclosure system. Can the Minister confirm that we will continue along this path whenever possible?

ESG is not going away, and the UK should not be concerned about or discouraging of it. I must again pay tribute to the Government for already being proactive in creating a welcome environment for ESG, of which I know the Chancellor is already a keen advocate, but if we are to become the global home for ESG, we must move faster and do ever more. I hope that this place sees many more debates on the topic, and that we continue to open lines of communication and inquiry on one of the fastest growing sectors across the UK. As a home for ESG, we have strong foundations, but before we can fully welcome ESG inside, we must make sure that the structure is solid, or it risks total collapse.

Public Sector Exit Payments (Limitation) Bill

Roger Gale Excerpts

2nd reading
Friday 20th October 2023 Commons Chamber

Question (3 March) again proposed, That the Bill be now read a Second time.

[Mr Deputy Speaker (Sir Roger Gale)]

I call Sir Christopher Chope.

[Sir Christopher Chope (Christchurch) (Con)]

Mr Deputy Speaker, I had already finished speaking, and I think the Minister’s predecessor was in the middle of responding.

[Mr Deputy Speaker]

That is entirely my error. I did not have the pleasure of being here for the first part of the debate. I call the Minister.

Finance (No. 2) Bill

Roger Gale Excerpts

2nd reading
Wednesday 29th March 2023 Commons Chamber

[Craig Mackinlay]

My right hon. Friend highlights the problem that different countries could indeed game the system. The peculiarity here is the domestic top-up tax. Even if, under the UK calculation of profit, a business had a profit rate of more than 15%, it could be under 15% using the OECD way of calculating profit and therefore there would be a top-up tax. That is truly perverse. In accordance with UK tax law, perfect rates of corporation tax are being paid, but because it does not comply with these new strictures, of which there are hundreds of pages in this legislation, someone could find themselves paying a domestic top-up.

My concern is whether we will see a rash of new statutory instruments, as we have new external nation-UK tax treaties needing to be looked at and unwound. I wonder, too, whether any thought has been given to potential trade deals; I am given to understand that the US is looking quite negatively at countries that are looking to implement the OECD pillar 2 proposals.

I am just about to conclude, which I am sure will be a great relief to many. What would I like those on the Treasury Front Bench to look at carefully before we get to Committee stage, Report and beyond? I recommend that we strip out the multinational top-up tax clauses, or implement what other hon. Friends have suggested, a start date more in accordance with when the rest of the world thinks this is a great idea as well. Otherwise, as I have said before, we could be buying the Betamax when we should be waiting for VHS.

These measures occupy half of the Bill. I would like to hear assurances that for 2024-25 we can have the £1,000 as a general disregard threshold applied to dividend taxes under a simplification measure. However, given that the Bill runs to such a huge volume, I would like to hear more about how we are going to replace the Office of Tax Simplification. I think it would be fair to say that I know many of the characters in there—there were a number of ex-presidents of the Chartered Institute of Taxation. I do not know quite how wide a remit they had, but one has to assume they did not really get very far with tax simplification.

When I qualified as a chartered accountant in 1991, there was big talk about the tax law rewrite to change seven pages explaining first in, first out with perhaps one word, FIFO. We have a lot of verbiage in our tax system, and to address and simplify the 23,000 pages would aid everybody. Those are my brief observations on the Finance Bill.

[Mr Deputy Speaker (Sir Roger Gale)]

I notice that my two predecessors in the Chair this afternoon have paid tribute to Baroness Boothroyd, and I would like to do the same. Betty was one of the two great Speakers of my parliamentary lifetime, the other being Jack Weatherill—that is excluding the current Speaker, of course, who will no doubt take his own place in those annals. Not all Speakers have a facility with names and faces, and Betty freely admitted she was one who did not—something you may have noticed I sometimes suffer from myself. She just used to say, “You, lovey—no, no, not you, lovey; you, lovey.” Happily, I can remember Stewart Hosie’s name.

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[Several hon. Members rose—]

[Mr Deputy Speaker (Sir Roger Gale)]

Order. A significant number of right hon. and hon. Members still wish to take part in the debate. The debate is open-ended, but bitter experience has taught me that if you wish to retain the attention of the House, brevity is the order of the day.

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[Several hon. Members rose—]

[Mr Deputy Speaker (Sir Roger Gale)]

Order. There are still four Members waiting patiently to speak. We hope to start the winding-up speeches at 5.40 pm. It is a big ask. I expect you to be able to say what you need to say, but do your best.

Energy Trilemma

Roger Gale Excerpts

Thursday 23rd March 2023 Commons Chamber

[Ian Blackford]

I have talked about the Skilling report and the ability to get to 80 GW. There is the opportunity with tidal to provide the baseload. I argue on that basis that we probably do not need the investment in nuclear to get to where we need to get. One thing I referenced was that I did not believe there is any fantasy in the numbers we have from Skilling. They are eminently achievable on the roadmap that we talk about.

Let us look at some of the choices and where the money has to come from, and put that in the context of the debate we are having over the trilemma and the choices that many people are having to make because of the cost of energy. We know that a number of producers have made eye-watering profits as a consequence of high energy prices over the past year. This Government have rightly introduced a windfall tax. If we had wanted, we could have hypothecated some of that to make sure we were speeding up investment in renewables. We could have provided the £50 million that I am asking for on an annual basis so that we could fulfil that potential in tidal.

One aspect of the events of the past 12 months has been the enormous increase in share buy-backs from energy producers. In essence, what are share buy-backs? They are in effect a return of capital to shareholders. We have taxed the profits of the generators to some extent, but we have not taxed the return of cash to shareholders—windfall gains. On a one-off basis, we could have taxed share buy-backs in the same way that we tax dividends, and provided the ability to generate the investment that we need in our energy transition. That would have been the sensible thing to do.

Let me come back to the European Union, because there is already an €800 billion NextGenerationEU post-coronavirus pandemic recovery scheme. EU member states must reserve 37% of their spending for that green transition. About €100 billion of the EU’s 2021 to 2027 cohesion fund, which is dedicated to regional development, goes to green spending. Horizon Europe, the EU science and innovation programme, allocates €40 billion to green deal research and innovation, and industry partnerships. The investment I am asking for and that I believe we need in tidal has to be seen in the context of the scale of that investment.

On a subject that many of us discuss, carbon capture and storage, the EU has commenced its third round before the UK has come close to completing its second. We are all aware of the promises that have been made about carbon capture and storage in the north-east of Scotland. There are Members in this Chamber who are as passionate as I am about making sure it happens, and let us remember why. If we are serious about getting to our net zero targets—whether 2045 in Scotland or 2050 in this place—then carbon capture and storage has to happen.

We have failed to back carbon capture and storage, and the harsh reality is that the renewable energy budget has been cut by a third and there has been the cut to the ringfenced budget for tidal stream. We need to make sure that we create competitive advantages out of the bounty that we know is there. Let us come back again to the green industrial strategy, because if we are able to develop our green energy sources to the extent that I believe we can, we need to make sure there is a competitive advantage for our industries and the industries of the future.

We also need to make sure that our communities benefit from the investment that is taking place. To take my own home island of Skye, an enormous increase in investment is coming down the line over the next few years in wind generation. We will be producing many times the amount of energy that the island of Skye can absorb by itself, yet there is an additional cost to access the network from producing in such remote and rural areas. There is a double whammy: because of the nature of the regional distribution market, we pay the highest prices to get the electricity back again. It simply is not good enough, and the communities making legitimate sacrifices in producing that energy have to be compensated effectively.

While we are talking about onshore, offshore and tidal, we should not forget the opportunities we have with pumped hydro storage. I delighted that, this week, SSE has announced a £100 million investment in the biggest pumped hydro storage scheme in the United Kingdom for 40 years. The Coire Glas scheme will power over 3 million homes, more than doubling the United Kingdom’s electricity storage capacity. Again, it is demonstration of what can be done in providing the baseload that is so necessary.

We need to pose the question why—in what is, for Scotland and arguably for the UK, an energy-rich country—people are facing the kind of costs that they have done over the last year. The average household bill in Shetland, if I may refer to that, in October 2022 was £5,578, more than double the UK average of £2,500, according to evidence submitted to the House of Commons Scottish Affairs Committee by Shetland Islands Council. The latest available figures show that a third—33%—of households in remote and rural areas in Scotland are in extreme fuel poverty. That statistic has not been updated since 2019 due to covid, and therefore does not reflect the current cost of living crisis. There will have been a massive increase in the percentage of our households that are not just in fuel poverty, but in extreme fuel poverty.

The only place where the UK Government seem to be increasing investment is in nuclear energy, which is far more expensive than the renewable alternatives. The Institute for Public Policy Research said:

“If the Government are serious about reaping the benefits of the transition and levelling up, it should learn from Joe Biden, scale up public investment, and bring forward a serious strategy to build an economy that is prosperous, fair and green.”

The CBI said:

“The UK is falling behind rapidly—to the Americans and the Europeans, who are outspending and outsmarting us.”

The world faces an energy trilemma, but the UK faces a simple binary choice: will it continue to be left behind, or will we collectively work in humanity’s self-interest to tackle climate change and embrace the opportunity for green growth?

[Mr Deputy Speaker (Sir Roger Gale)]

I call David Duguid.

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[Several hon. Members rose—]

[Mr Deputy Speaker (Sir Roger Gale)]

I shall need to start the winding-up speeches at about 4.30 pm. Three Members are still waiting to speak. So far the speeches have been running at about 13 minutes, but I am afraid I must ask Members to confine themselves to about seven minutes if everyone is to get in.

Energy

Roger Gale Excerpts

Tuesday 7th March 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway)]

I beg to move,

That the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023, dated 19 February 2023, a copy of which was laid before this House on 21 February, be approved.

[Mr Deputy Speaker (Sir Roger Gale)]

With this we shall take the following motion:

That the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023, dated 22 February 2023, a copy of which was laid before this House on 23 February, be approved.

[Amanda Solloway]

The instruments were laid between 11 January and 23 February 2023, and their purpose is to ensure that benefits from the alternative fuel payment, both domestic and non-domestic, are passed through to consumers. Throughout this winter, the Government have delivered critical support to households, businesses and other non-domestic consumers in response to the unprecedented rise in energy prices. The Government brought forward emergency legislation on energy support, paving the way for this support package to be delivered rapidly across the entire United Kingdom.

The alternative fuel payments scheme provides support to households, organisations and businesses that do not use mains gas and use alternative fuels such as heating oil. Eligible domestic consumers using alternative fuels will receive a one-off fixed payment of £200. Non-domestic consumers will receive £150.

Charter for Budget Responsibility

Roger Gale Excerpts

Monday 6th February 2023 Commons Chamber

[Mr McFadden]

I suspect that the Bank of England will not be the only institution attacked by the right hon. Gentleman tonight, but I remind him that part of the purpose of the charter is to restore our faith in the economic institutions, after what happened less than six months ago.

The IMF has forecast that the UK will have the lowest growth among developed countries for the next two years: bottom of the league on the record and bottom of the league on the forecast. And yet still the Government come along tonight and table a debate supposedly designed to enhance their economic credentials.

Well, what will the effect on those credentials be of the re-emergence of the former Prime Minister at the weekend? I have to give her 10 out of 10 for timing. What better time to write an article saying that her mini-Budget was right all along than the day before the Chief Secretary has to come here and stand up for the Government’s fiscal stability record? What better moment for her to say to members of pension schemes that had to be put on life support as a result of her mini-Budget that it was not her fault? No contrition for trying to borrow from my constituents in Wolverhampton South East in order to pay for a tax cut for people earning over £150,000 a year; not a word of apology to the millions of mortgage holders left paying a Tory mortgage penalty because of the reckless irresponsibility of the Conservative party. Just when the Government were trying to bury the memory of that mini-Budget under 10 feet of concrete, up she pops—like one of those hands coming out of the swamp at the end of the film—to tell us it was all someone else’s fault.

For me, the best bit in the article was when, in a long list of culprits, other than the Government that actually introduced the mini-Budget, the former Prime Minister blamed the Treasury civil servants for not warning her about the impact on pension schemes. I had to ask myself, were these the same Treasury civil servants that she had spent the whole summer scorning and disparaging? Were they the same Treasury civil servants whose boss was shown the door on the first day of her premiership? In what world are we expected to believe that the former Prime Minister, her Chancellor and the Government would have listened to a word those civil servants said, when all along she defined them as being part of the problem and not part of the solution?

The real problem for the Prime Minister, the Chancellor and the Treasury is that this is not going away. The last Prime Minister is not a lone voice, and the more that Conservative Members realise the Government have nothing left in their tank and are resigned to managing decline, the louder the drumbeat will become; and it will be cheered on by the same newspapers that gave such a warm welcome to that mini-Budget in the first place. The Prime Minister, demonstrating the sureness of touch with which we have come to associate him by now, has labelled those on the Government Benches calling for tax cuts “idiots”. That is his phrase, not mine—about those on his own side. And yet today, fearful of them, the Prime Minister now says he will listen. Which is it? Are they idiots or is he listening? This weekend’s intervention, and those who cheer its argument, will have the Prime Minister and the Chancellor looking over their right shoulders every day between now and the election, when they should be focused on the needs of the country.

This debate is supposed to be about all of us swearing fealty to fiscal rules, but there is another problem: since this Government came to office, they have broken their fiscal rules 11 times. They have had even more sets of fiscal rules than they have had Chancellors and Prime Ministers over the past year. If you don’t like one set, don’t worry—there will be another one along in a while! The Chief Secretary himself outlined how these rules were different from the ones we debated this time last year in the George Osborne tribute debate of 2022, and each time we are expected to treat the new rules as though they were the ten commandments.

The second part of this is about respecting the role of the Office for Budget Responsibility. The document before us is very clear about that. It talks in great detail about the importance of that role. Indeed, when it was first launched, the Economic Secretary to the Treasury of the time set out the benefits of the OBR, making clear the value of its

“strong, credible, independently conducted official forecasts”—[Official Report, 14 February 2011; Vol. 523, c. 747.]

She said that the establishment of the OBR and its independence from the Treasury meant that

“Governments will be reticent about introducing policies that seem to take them off course”—[Official Report, 14 February 2011; Vol. 523, c. 749.]

Well, there was not much sign of that reticence last year as the Government crashed the economy, caused a run on the pound, caused mortgage rates to rise and put pensions on life support. Indeed, we had a real-time lesson in the cost of disparaging our institutions—institutions that the Conservative party used to care about. But tonight, even after that experience with chapter 4 of the charter, we are back to a hymn of praise for the OBR.

The real problem here is not just inconsistency, but credibility. I am afraid that the many-year record since the idea of this charter was first conceived a decade or more ago has meant that the Conservative party has now forfeited the right to call itself the party of sound management; it has forfeited the right to call itself the party of growth, because the record on growth has been abysmal; it has forfeited the right to call itself the party of low debt, because debt has rocketed; it has forfeited the claim to careful stewardship of the public finances, with billions lost in bounce back loan fraud, personal protective equipment waste and tawdry stories of one dodgy contract after another; and it has forfeited the right to call itself the party of low tax, because the tax burden is at its highest for decades.

What, after all that, has this been for? We have record waiting lists, trains that people cannot rely on, and delays and backlogs everywhere. In fact, there is not a single public service that runs better now than it did 13 years ago, when the Tories took office. Low growth and high tax for a worse outcome—that is the record. When people are faced with the question, “Are you and your family better off?”, the answer is no.

Two weeks ago, we had the Chancellor’s speech on the way forward. He had four Es, and more than one person said that the biggest E was for empty, because the real problem for the Conservatives is that, when it comes to growth, the only policy they reach for is unfunded and untargeted tax cuts, and when they tried that in September, it blew up in their faces. Growth is the right question for the country, but it does not come from the discredited idea of trickle-down economics. It comes from the efforts of all of us—from every businessperson with a new idea and the drive to make it happen, and from making sure we use the UK’s strengths to make the most of the green transition that is coming, rather than standing back and allowing those investments to go elsewhere. It comes from every teacher equipping a pupil with new skills and knowledge, and from not having 7 million people on NHS waiting lists, keeping many of them out of the labour market. Talking of former Prime Ministers, it does not come from saying “F*** business”, but from a modern partnership with business that brings in the long-term investment the country needs. Most of all, in a knowledge economy like today’s, growth has to come from everyone, not just from a tiny proportion of people at the top.

Fiscal stability is an essential foundation for what we have to do—I agree with the Chief Secretary on that—but it is not an end in itself. It has to be the foundation for meeting the challenges the country faces and for giving people a more prosperous future. After many years of this debate, we look less at the latest version of the rules and more at the gap between claim and reality, because after crashing the economy and leaving the British public to pay the bill, the Government have no credibility to come forward and claim to be the champions of fiscal stability.

The idea for this charter was born in another political time, as I said at the start, and if it did have a purpose, events since have rendered it an unconvincing exercise to say the least. It certainly has not kept the Government to their fiscal rules, which have been broken many times, and it is unlikely, particularly after recent months, to convince anyone outside this Chamber that the Government have got the economy back on track.

[Mr Deputy Speaker (Sir Roger Gale)]

If I may slightly abuse my position in this Chair, let me say that I only heard from the Minister on the Treasury Bench at the start of this debate of the death of Robert Key. He was a dear personal friend, an excellent and dedicated constituency Member of Parliament, and a first-rate Transport Minister. I know that those in the House who knew him will wish to share their thoughts with Sue and his family.

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

Thank you very much, Mr Deputy Speaker, and may I associate myself with those passionately expressed words from the Chair?

I did think there might be a few more people here this evening to talk about the charter for Budget responsibility, after we have had so much debate across the country about the Office for Budget Responsibility and its forecasts over the last year or so. This was the year when the Office for Budget Responsibility made it into the headlines on numerous occasions, so I thought there might have been a bit more of a heated debate. I listened to the words of the right hon. Member for Wolverhampton South East (Mr McFadden), and I am not sure I understand at the end of his speech whether the Opposition are in favour of tonight’s motion and of the charter. I am not sure whether they are in favour of Budget responsibility. In fact, I did not hear any suggestions at all for solutions to the criticisms that he raised.

This evening, I reiterate, for those who were not here in early 2010, the rationale for the setting up of the Office for Budget Responsibility. It was because, in the Treasury of 2008, 2009 and early 2010, it was far too easy for the Government simply to make their own forecasts and to mark their own homework. I think there is merit in having someone external to the Treasury and oblivious to ministerial pressure come up with a set of forecasts. We all acknowledge that none will be perfect, or have perfect foresight about the future, but that externality means there is a way of marking the Treasury work and the Treasury projections. A Chancellor can certainly make an argument about why they may take issue with some of the elements going into the forecast, and there is often a more dynamic quality to tax revenues than is perhaps put into some of the external forecasts referenced this evening. A Chancellor can certainly have a debate about the numbers, but we do need to remind ourselves of the importance of this process and its external nature.

The other point I want to raise is about the fiction, which the Treasury Committee highlighted in one of our recent reports, that clouds the Office for Budget Responsibility forecasts for fuel duty. Again, this practice goes back many Chancellors and many Governments, and it is about putting into the projections for future tax revenue a ratchet up every year of fuel duty, yet for the last 12 or 13 years, every Chancellor coming to the Dispatch Box has decided not to implement it. It would be astonishing—I note that the Chief Secretary gave me a little cheeky smile—to see what is currently projected for fuel duty in the Office for Budget Responsibility forecast, which is for an extra 12p to go on to fuel after the Budget if the Chancellor does nothing. I think we can all agree that that is fiction. I cannot see the Chancellor coming to the Dispatch Box on 15 March and increasing fuel duty by 12p—I would be astonished—because the temporary one-year reduction of 5p will expire and there is the cumulative impact of the ratchet over the years.

I just wanted to highlight that there is some element of a work of fiction in the Office for Budget Responsibility forecast. It would be healthier for all concerned if a more realistic approach could be taken to the forecast for fuel duty not just in the short term, but in the medium term, because I think we all recognise that there will have to be a change, as more and more people are buying electric cars, in how we tax transport and drivers. I also wanted to publicise how our Committee has come together on a cross-party basis to make that point.

[Mr Deputy Speaker]

I call the SNP spokesperson.

Stamp Duty Land Tax (Reduction) Bill

Roger Gale Excerpts

Committee stage
Tuesday 10th January 2023 Commons Chamber

[The Financial Secretary to the Treasury (Victoria Atkins)]

I beg to move amendment 1, page 1, line 2, leave out subsection (1) and insert—

“(1) This section makes modifications of Part 4 of the Finance Act 2003 in relation to any land transaction the effective date of which falls in the period (“the temporary relief period”)—

(a) beginning with 23 September 2022, and

(b) ending with 31 March 2025.”

This amendment provides that the relief from Stamp Duty Land Tax provided for by the Bill is only to apply until 31 March 2025.

[The Second Deputy Chairman of Ways and Means (Sir Roger Gale)]

With this it will be convenient to discuss the following:

Amendment (a) to amendment 1, after “transaction” insert

“(except in relation to additional dwellings)”.

This amendment is intended to remove the relief from stamp duty land tax for second homes (see Amendment 15 to leave out subsection (3)).

Amendment (b) to amendment 1, leave out “31 March 2025” and insert “31 March 2028”.

This amendment is intended to extend the temporary relief from Stamp Duty Land Tax so that it expires at or around the time as the frozen thresholds for Income Tax, Inheritance Tax and National Insurance are due to expire.

Government amendments 2 and 3.

Amendment 15, page 1, line 13, leave out subsection (3).

This amendment is intended to remove the relief from stamp duty land tax for second homes (see Amendment (a) to Gov 1).

Government amendments 4 to 12.

Clause stand part.

Government amendment 13.

Clause 2 stand part.

New clause 1—Comparison of temporary and permanent relief—

“(1) The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of the change in Government policy on stamp duty land from—

(a) the Plan for Growth published on 23 September 2022, to

(b) the Autumn Statement published on 17 November 2022.

(2) This review must include—

(a) an assessment of the costs of implementing the change in policy referred to in subsection (1) for the Government, the property industry, and homebuyers;

(b) an assessment of any wider costs and impacts of the change in policy referred to in subsection (1) on the housing market; and

(c) what measures the Government is planning to ease the impact on tax revenues, home purchases and the housing market of the reduction in stamp duty land tax coming to an abrupt end on 31 March 2025.”

This new clause would require the Government to publish a review of the change in Government policy to make the relief in this Bill temporary instead of permanent.

New clause 2—Review: first-home buyers—

“The Chancellor of the Exchequer must conduct a twice-yearly review of the impact of this Act on the number of people buying their first home and must publish a report of this review at six-month intervals.”

This new clause is to ensure that a regular report is made on the impact of the proposed Act on the number of people buying their first home.

New clause 3—Review: second homes in National Parks and Areas of Natural Beauty—

“The Chancellor of the Exchequer must publish an annual report on the impact of this Act on the number of second homes in National Parks and Areas of Natural Beauty.”

This new clause would require that an annual report is published on the impact of the Bill on the number of second or subsequent homes in National Parks and Areas of Natural Beauty.

New clause 4—Review: house prices in rural areas—

“The Chancellor of the Exchequer must publish an annual review of the impact of this Act on house prices in rural areas.”

This new clause would require that an annual review is published on the impact of the Bill on house prices in rural areas.

New clause 6—Review: availability of affordable housing and the private rented sector—

“The Chancellor of the Exchequer must conduct an assessment into, and publish a report on, the impact of this Act on the housing market, including (1) the impact on the availability of affordable housing and (2) the private rented sector.”

This new clause would require the Chancellor of the Exchequer to conduct an assessment into the impact of the Bill on the housing market, including the availability of affordable housing and the private rented sector.

New clause 7—Report on effect of temporary relief—

“(1) The Chancellor of the Exchequer must, three months before expiry of the temporary relief period, publish an assessment of the impacts of the temporary relief provided by this Act.

(2) This assessment must include an assessment of the impacts on—

(a) the volume and value of housing transactions on the housing market,

(b) any wider costs for the Government, property industry, housing market and/or homebuyers, and

(c) tax revenues.

(3) The assessment must make a recommendation as to whether the temporary relief period should expire or whether the House of Commons should consult on extending it or making it permanent.”

This new clause would require the Government to publish an assessment of the impacts of the temporary tax relief and a recommendation before the temporary relief period comes to an end.

Government amendment 14.

[Victoria Atkins]

It is a pleasure to serve under your chairmanship, Sir Roger.

At the autumn statement, my right hon. Friend the Chancellor set out set out how the Government are dealing with the global economic challenges that we face. The consequences of Putin’s illegal invasion of Ukraine and the covid-19 pandemic mean that we must be fiscally responsible while supporting the economy and encouraging our businesses to grow and our constituents to thrive. We need a balanced approach to support our objectives, which includes helping people get on to and move up the housing ladder—and indeed to downsize.

--- Later in debate ---

[Several hon. Members rose—]

[The Second Deputy Chairman of Ways and Means (Sir Roger Gale)]

Order. The shadow Minister may be slightly perplexed as to why I did not call her first, but the hon. Member for Westmorland and Lonsdale (Tim Farron) had indicated to me that he wished to press new clause 3 to a Division, so I thought it might be helpful for her to hear his arguments before being called to speak.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

Thank you, Sir Roger. It is a pleasure to serve under your chairship this afternoon. I was not perplexed at all.

When we debated the Bill on Second Reading in October, the stamp duty cut that it seeks to introduce was one of the last few measures to have survived from the Tories’ reckless mini-Budget in September. As we said at the time, we oppose the stamp duty cut because it would not be the right way to spend public money and would not be responsible. On the back of 13 years of economic stagnation, our economy has just suffered long-term damage from the Tories’ recklessness at the end of last year. We made it clear that spending £1.7 billion a year on the proposed stamp duty cut simply could not be justified.

In October, as hon. Members may remember, there was a last-minute flip-flop in parliamentary business. Four days before we were due to debate all stages of the Bill, the Leader of the House announced that we would debate only its Second Reading. No reason was given for that last-minute change to parliamentary business, so we speculated that the decision might have been intended to give the new Prime Minister and his Chancellor the chance to change their mind about these stamp duty changes. That is indeed what has happened.

Rather than reversing the stamp duty cut altogether, however, the Government’s amendments seek only to impose a time limit on it. Ministers could have used the breathing space since last October to do the right thing and scrap the stamp duty cut, but instead the Chancellor proposes only a partial U-turn. Government amendment 1 will amend clause 1, imposing a sunset date of 31 March 2025. The Government’s other amendments, which are consequential on that change, include an amendment to the name of the Bill.

The Opposition remain opposed to the stamp duty cut. Even if Government amendments 1 to 14 are agreed to, the Bill will still represent a failure by the Conservatives to spend money wisely.

We are not talking about a small amount of money: the Government’s own figures make the Bill’s price tag clear. Even if the stamp duty cut is time-limited, it will still cost taxpayers £3.2 billion. We are serious about spending public money wisely, and the Government should be as well. For that reason we will vote against the Bill on Third Reading even if it has been amended, but before we reach that stage we still want to use this Committee stage to interrogate the Government on some of the detail, and to urge them at least to amend its provisions if they are not willing to drop it entirely.

Non-domestic Energy Support

Roger Gale Excerpts

Monday 9th January 2023 Commons Chamber

[The Exchequer Secretary to the Treasury (James Cartlidge)]

With permission, Mr Deputy Speaker, I will make a statement on how the Government are continuing to support businesses, charities and the public sector with their energy bills. Before I outline how we are helping businesses, I remind the House why we are in this position.

Although wholesale energy prices are now falling, some businesses are still exposed to higher energy bills after Putin’s illegal invasion of Ukraine pushed prices far above their historical averages. Putin’s military aggression has put households and businesses across Europe and beyond under serious financial pressure. For that reason, we have already provided a package of support for non-domestic users through this winter that is worth £18 billion, as per the figures certified by the Office for Budget Responsibility at the autumn statement.

The energy bill relief scheme gave a direct discount on energy costs for all eligible businesses. It lessened the shock of the immediate increase in prices; it gave businesses the certainty they needed to plan for the winter; and it is one of the most generous packages in Europe. It comes on top of our support for households, including the energy price guarantee worth £900 this winter according to the OBR, which further helped to support consumers and the businesses that rely on them. I remind hon. Members that that followed unprecedented business support during the pandemic.

The Government are proud to have helped businesses through a twin combination of unprecedented shocks that nobody could have expected a few years ago. We will always do what is necessary to keep the economy and the British people secure, which is why the Prime Minister has been clear that we will halve inflation this year to ease the cost of living and give people financial security before returning it to target. That is also why we unleashed the furlough scheme, which avoided 2 million forecast job losses; a groundbreaking vaccine roll-out, which saved lives and ensured the safe reopening of our economy; grants for pubs, shops and other retail businesses; and now, humanitarian and military aid to Ukraine as it fights for democracy, with the UK giving more than any other nation bar the US. All those steps have been right, but all have come at a significant combined cost, leaving our national debt standing at £2.48 trillion or 98.7% of GDP.

To secure the future of public services, we have committed to get national debt falling, including two new fiscal rules—that the UK’s national debt must fall as a share of GDP by the fifth year of a rolling five-year period, and that public sector borrowing in the same year must be below 3% of GDP.

As we look to the next steps in supporting businesses, it is therefore in our national economic interest that we chart a path to withdrawing such support and restoring fiscal sustainability, but in a sensible and fair way that strikes a balance between supporting businesses now and protecting taxpayers’ exposure to volatile energy markets. As my right hon. Friend the Chancellor said at the autumn statement, one of our key economic priorities is stability, and we cannot have stability without financial prudence. So all Members must recognise that there is a balance to be struck, and it is not sustainable for the Exchequer to continue to support large numbers of businesses at the current level.

No Government—no responsible, serious Government —anywhere in world can permanently shield businesses from this energy price shock, and we must cap the taxpayer’s exposure to volatile energy prices. We have also been clear throughout that such levels of support were time-limited and intended as a bridge to allow businesses to acclimatise. Firms need to adapt and invest in energy efficiency to remain viable, and as they do so, we will be at their side to help, including with £6 billion of additional investment to cut the UK’s overall energy use.

Yet we remain fully alive to the fact that businesses would be facing a cliff edge as support comes to an end. To avoid this, we are going to provide a further package of transitional support, so today I can confirm a new energy bills discount scheme for businesses, charities and the public sector. Up to £5.5 billion will be made available from the end of the energy bill relief scheme period on 31 March until 31 March 2024.

The Chancellor has been working with the key industry stakeholders to get this right. We heard that they needed a 12-month rather than six-month scheme. We have listened and, as a result, I confirm that we will be providing a year’s worth of support for all non-domestic bills beyond the current six-month scheme. This will give certainty and ongoing assistance to businesses locked into contracts signed before recent substantial falls in the wholesale price, and provide others with reassurance against the risk of prices rising again. It is different from the previous energy bill relief scheme, but provides long-term certainty for businesses and reflects how the scale of the challenge has changed since September last year.

From 1 April 2023 to 31 March 2024, non-domestic customers that have a contract with a licensed energy supplier will see a unit discount of up to £6.97 per megawatt-hour automatically applied to their gas bill and a unit discount of up to £19.61 per megawatt-hour applied to their electricity bill, except for those already benefiting from lower energy prices. This means a typical pub can expect a taxpayer-funded discount of up to £2,300 over 12 months and a typical small retail store will get up to £400 off its annual energy bill.

We also recognise that some businesses, especially intensive users such as major manufacturers, are highly exposed to both energy prices and international competition, which means they are unable to pass through or absorb all of these costs. I can therefore confirm that the Government are targeting a substantially higher level of support beyond April 2023 to energy and trade-intensive sectors, providing a major boost for the manufacturing sector. Businesses in scope will receive a gas and electricity bill discount based on a price threshold that will be capped by a maximum unit discount of £40 per megawatt-hour for gas and £89.10 per megawatt-hour for electricity. This discount will only apply to 70% of energy volumes. These firms will continue to be supported at source, based on a price threshold of £99 per megawatt-hour for gas and £185 per megawatt-hour for electricity. This means a typical medium-sized manufacturer would expect to receive nearly £700,000 of direct support over 12 months.

This comes on top of the £13.6 billion of support for firms with business rates over the next five years, a UK-wide £2.4 billion fuel duty cut this year and the protection from full corporation tax rises for businesses making profits of less than £250,000, with those making profits of less than £50,000—the vast majority—not facing any rate rise at all.

I have set out how this transitional support will reduce overall as a cost to the Exchequer while remaining significant at a time of elevated energy costs and providing certainty for a further 12 months. However, I have also been clear that, just as we withdrew covid support when we moved to a position of living with the pandemic following the success of our vaccination efforts, this energy support is deliberately transitional in nature. That means that in due course we will move unambiguously to a point where there is no universal support for businesses with energy bills from the taxpayer.

Ultimately, it is in the national economic interest that we move to a position where the Government do not routinely subsidise UK businesses. It is not for the Government to habitually pay the bills of businesses any more than it is for the Government to tell businesses how to turn a profit, and it cannot be that the taxpayer props up failing or unproductive firms. Instead, we must protect the forces of free enterprise and entrepreneurialism that have led to our economic success for generations. [Interruption.] Labour Members do not understand free enterprise and entrepreneurialism, and I do not think many of them have ever run a business.

The approach I have outlined today does just that: it is fair in balancing the needs of non-household energy users with the need for prudence and a restoration of competitiveness, and it shows that this Government remain committed to supporting businesses, charities and the public sector through these challenging times. I commend this statement to the House.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the shadow Minister.

--- Later in debate ---

[James Cartlidge]

I am grateful to the hon. Lady. She asked what happened to the review. Well, I am making a statement about the results of the review, and the policy decisions that we have come to a conclusion on, based on the review and consulting all the key stakeholders in business and industry and also the voluntary sector, who I spoke to only this week.

The hon. Lady used the word “criminal” to describe the announcement today. I think that is a little over the top. We are continuing to provide significant support for businesses. We have a universal scheme, plus the targeted support for energy and trade-intensive sectors, with significant expenditure of up to £5.5 billion. We must balance this, however. She talked about failing to support business, but I remind the House that at this precise moment we are in the middle of a six-month scheme worth £18 billion, which is an extraordinary sum.

The hon. Lady said that we have somehow betrayed hospitality. The last statement I made, the day before the House rose for the Christmas recess, was that we would be freezing alcohol duty for another six months. We have supported pubs throughout the pandemic. To a typical pub, this will be worth about £2,300 in support over the next 12 months. Beer duty is now at the lowest real-terms level for 30 years, having been cut or frozen in nine of the last 10 Budgets, and spirits duty is at the lowest level in real terms since 1918, and of course we have extended the discount on business rates for the hospitality sector—previously it was 50% and we are increasing it to 75%. So there is a huge amount of support for hospitality.

The hon. Lady called for energy security. I agree that the long-term answer to this problem is investment in energy security; it is about having robust British energy, and we should look at the figures on that. Only a few days ago we heard from the BBC that in 2022 we had a record level of wind production in this country producing electricity: almost 27%, with just 1.5% from coal compared with 43% from coal in 2013. No other country is making that sort of progress. I am proud as an East Anglian MP to say that offshore wind has made a massive contribution; we have the largest array of offshore wind in Europe. We are delivering energy security and, as the Chancellor said in his statement, we are going to keep doing it, investing in nuclear and putting other investment in place, backing contracts for difference.

I will make one final point. A few days ago the Leader of the Opposition said that it was no longer the time for the big Government cheque book and that we need to put the cheque book away. I am not sure that his Front-Bench Members have got the memo, because there is a balance to be struck here: we need fiscal prudence. The underlying problem for the country is inflation: inflation is the reason why people are experiencing cost of living problems. If we want to get a grip of inflation, we need to set a path for fiscal sustainability, because the problem with what the hon. Lady is suggesting is that it implies not just getting the Government cheque book out again, contrary to the words of the Leader of the Opposition, but getting a blank cheque book out. The problem with that is that if a Labour Government start writing blank cheques, we know where that ends up: with them writing a letter saying there is no money left, and bankrupting the country. We must balance prudence with supporting businesses and the voluntary and public sectors with their energy bills. We have done that today as a result of our review, and I believe this is the right balance of policy for the House.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

I welcome the Minister’s announcement. He rightly points out that President Putin has, by illegally invading Ukraine, effectively weaponised the cost of energy against western economies, and he is right to highlight that we have been able to withstand that attack with £18 billion of support over this six-month period.

We now have a gas price close to where it stood before the invasion of Ukraine, and businesses across the country have realised the big risk they face in terms of their energy costs. Will the Minister encourage them not to pass on the cost of higher energy through inflation to their customers, and instead call for the wholesale price of energy to feed through more swiftly to the retail price our businesses pay?

[James Cartlidge]

I think this is the first time I have taken a question from my hon. Friend since her appointment to the chairmanship of the Treasury Committee and I congratulate her belatedly on her success. She makes the good point that wholesale prices have fallen significantly. The gas price is back to where it was before the invasion. Of course, we should be clear that before the invasion it was still elevated in relative terms historically, not least because there was an increase in energy prices following the reopening of the economy after the pandemic. Of course, we do not want prices to be passed on to customers in terms of inflation—that is the last thing we want to see—but I should stress that one reason why we are giving extra support to energy and trade-intensive sectors is that, because they tend to trade internationally, they are particularly exposed to those price pressures and find it harder than other companies that are energy intensive but not trade exposed to pass on those high prices.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Scottish National party spokesman.

[Stewart Hosie (Dundee East) (SNP)]

Happy new year, Mr Deputy Speaker.

I thank the Minister for his statement and for early sight of it, although I suspect businesses will be as underwhelmed and disappointed by it as they were frustrated by the delay in making it. I am disappointed that the higher level of discount will be removed after March this year, which is less than three months away; it does not give businesses the time or opportunity to plan.

There is also a degree of sleight of hand. I do not think the public will buy the £5.5 billion budgeted between March 2023 and March 2024 being portrayed as a year’s worth of support given that, as the Minister said, the cost of the package for six months to March this year came in at £18 billion. To dress that up as fiscal prudence simply will not wash.

The key thing is that the Minister said that no Government anywhere in the world can permanently shield business from the energy price shock—that mirrors what the Chancellor said a few days ago—and he went on to say that levels of support were time limited and intended as a bridge to allow businesses to acclimatise. May we have an assurance, however, that if this turns out to be not a short-term price shock but a medium-term price problem, this package and the level of the discount will be reviewed before next winter so that we do not have businesses that manage to survive this year falling over next December, January or February because they cannot afford to heat or light or power their workshops?

--- Later in debate ---

[James Cartlidge]

My right hon. and learned Friend asks an excellent question. Through the review, we have heard of issues in and around the pricing and availability of non-domestic tariffs, including increased standing charges, prohibitive contract renewal terms such as those he referred to and, in some cases, decisions by individual suppliers to withdraw from supplying particular sectors. Ofgem and the Department for Business, Energy and Industrial Strategy are working urgently to understand those issues, and Ofgem is launching a deeper review of the market. I can confirm that today, the Chancellor has written to Ofgem, asking it to do that work with the utmost urgency and to update him in time for the Budget. The Government recognise the importance of that work to many pubs, restaurants and other businesses that feel they are not getting a fair deal from their suppliers.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Business, Energy and Industrial Strategy Committee.

[Darren Jones (Bristol North West) (Lab)]

We know from the design of the domestic scheme that people in particular circumstances are not being helped as the Government perhaps intended. Will the Minister therefore confirm that the Government will tweak the design of this policy in the same way that they did the domestic scheme where there are legitimate cases of businesses not being helped as Ministers intended?

0.7% Official Development Assistance Target

Roger Gale Excerpts

Tuesday 8th June 2021 Commons Chamber

[Sir Roger Gale (North Thanet) (Con) [V]]

I want to touch on the two core aspects of this: the political and the humanitarian. Dealing first with the political, we are promoting global Britain, we are told. Once again, we are proudly taking our place on the world stage, we are told, and that is right and good. However, if we are going to do that, we have to be able to hold our heads high, and I cannot see how damaging some of the poorest people in the world will enable us to do that.

Politically as significant is the fact that where we leave a vacuum, others will fill that vacuum. Those others will be China, the Russian Federation and Russia’s client states, Azerbaijan and Belarus. I wonder how many colleagues are prepared to see the emerging democracies turn to communist dictators for assistance, because we have pulled the rug out from under them.

Secondly, the humanitarian effect has been touched on over and over again. In 38 years—tomorrow—in this House of Commons, I have been privileged to travel fairly widely to some of the poorest regions of the world. I assume that the former Foreign Secretary, now the Prime Minister, during his time in his previous office, was able to do that. I am quite sure that the Chancellor of the Exchequer is a widely travelled man. I suppose that they, like me, will have seen, smelt and tasted the death that comes from poverty and starvation, and seen the misery of young girls having to walk miles every day to fetch foul water. Now, to see the opportunities taken away from those young people around the world is, I believe, unforgivable.

Yes, of course we have run up a huge debt in the course of the covid crisis, but put that in perspective. We are talking about a cut upon a cut. As my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) said in his opening remarks, this was designed to scale against a reduction in gross national income. By reducing the figure from 0.7% to 0.5%, we are exacerbating that cut. In so doing, we are hitting what used to be known as the bottom billion, the 1 billion people in this world who live on less than $1 a day, a figure that the United Nations believes to be the sign of abject poverty.

I want our Prime Minister to be able to go to the G7 with his head held high. I extol the virtues of our contribution to COVAX, but this cut that has been put forward by the Treasury is unforgivable and it must be reversed next year.