Oral Answers to Questions

Rushanara Ali Excerpts

Tuesday 6th February 2024 Commons Chamber

[Nigel Huddleston]

Non-doms contributed about £8.5 billion in taxes in 2022, and have contributed to investment to the tune of £7 billion since 2012. The hon. Gentleman will be well aware that scrapping their status would not be risk-free in a world in which people can be quite mobile, and could damage the UK’s competitiveness. As for the need for other support, that is exactly why we have been reducing national insurance rates, for example.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

10. What recent assessment he has made of the potential impact of changes in mortgage interest rates during this Parliament on household disposable income.

[The Economic Secretary to the Treasury (Bim Afolami)]

Mortgage interest rates have fallen by more than 100 basis points from their peak in the summer. None the less, the Government have prioritised support for households that are vulnerable to cost of living pressures. We have introduced one of Europe’s largest support packages, and it is partly thanks to those measures that real incomes have proved more resilient than was anticipated. In the third quarter of 2023, real household disposable income per person was just 0.5% lower than in Q4 2019, versus the Office for Budget Responsibility’s autumn statement 2023 forecast that it would be almost 3% lower.

[Rushanara Ali]

I thank the Minister for his answer, but since his party’s disastrous mini-Budget fiasco under the previous Prime Minister, food prices have soared, extreme damage has been done to the economy and mortgages have skyrocketed. Every month 200,000 people are having to remortgage, the average monthly rate has risen by £240, and 1.6 million people will have to remortgage this year. Overall, after 14 years of a Conservative Government, people are more than £10,000 less well off than they were on pre-2010 trends. Is it not time that the Chancellor and his ministerial team looked again at the possibility of additional support for those who are facing mortgage and other financial distress? The Chancellor is frowning, but it is time that he took further action to support people in distress.

[Bim Afolami]

This Government have introduced one of Europe’s largest support packages, worth more than £100 billion during 2022 to 2025. That is an average of £3,700 per household. The point about mortgage rates is that they went up everywhere across the world, to a higher level than ours in many jurisdictions such as the United States. I have already mentioned the work that we have done on the mortgage charter, helping hundreds of thousands of people to manage their mortgages, but the critical thing that we need to do is bring inflation down. She needs to talk to her shadow Chancellor and the shadow Treasury team about their plans, which would make inflation higher.

Mortgage Market

Rushanara Ali Excerpts

Tuesday 13th June 2023 Commons Chamber

[Andrew Griffith]

My right hon. Friend—I congratulate him as well—is right to say that one factor is the level of Government borrowing. This Government have had to borrow unprecedented amounts due to the covid pandemic and the war in Ukraine, and to provide households with that support of about £3,300 over this year and last. That is one reason why one of our key priorities is to reduce the level of debt.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Minister likes to point out, as he has done again, that this is about international factors and covid—there are lots of other reasons given. However, the Government fail to mention the mini-Budget fiasco caused by the previous Chancellor and the former Prime Minister, with its direct consequence of mortgage increases, with millions of people suffering. Why does the Economic Secretary not come clean on this, as the former Prime Minister and former Chancellor, who presided over that chaos, have done? It is not time that he stopped whitewashing and faced the reality of what he and his Government are responsible for, which is causing misery to people’s lives?

[Andrew Griffith]

The hon. Lady needs to look at the facts and the numbers. Despite moving in alignment with other international markets—and interest rates have increased over time—interest rates even today for mortgage holders are lower than those reached in October last year. So we are dealing with a macroeconomic international trend, which we are seeing across all western economies. We are moving in alignment with them, but this Government will always prioritise support for households, which is one reason why we have come forward with such significant economic packages in the past two years.

IMF Economic Outlook

Rushanara Ali Excerpts

Tuesday 31st January 2023 Commons Chamber

[James Cartlidge]

The IMF always stresses the importance of sustainable growth. It is sustainable growth that matters, and, of course, my right hon. Friend is absolutely right: exports are crucial to that. The City and financial services are a massive UK success story. We want to build on that, which is why we have announced the Edinburgh reforms and further measures to strengthen UK financial services. We are quite clear that the future for this country is optimistic and we will get there by backing brilliant British business.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Minister talks about covid as if we were the only country to experience the pandemic. He talks about the Ukraine crisis as if the fuel costs are affecting only this country, but he fails to mention that the former Prime Minister and her Chancellor crashed the economy, and that that came on top of the uncertainties of the previous years, including the failure to get a decent deal after Brexit, which led to a 4% hit on UK output. That is £55 billion of fiscal consolidation because of the failure of his Government. When will he admit to that and face up to reality instead of misleading the British people?

[James Cartlidge]

On the contrary, the whole point of why we mention the pandemic is not to say that we are the only country affected, but to explain the global headwinds that we face as a country. The hon. Lady talks about energy costs, but the Office for Budget Responsibility’s forecast is that the energy price guarantee will reduce the peak of inflation in this country by 2.5%. Inflation is an issue and it is global, but we are taking strong measures to ensure we deliver the Prime Minister’s target of halving it.

Autumn Statement

Rushanara Ali Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

My right hon. Friend is absolutely right to focus on this issue, because every 1% increase in interest rates is about £850 more on the average mortgage, so it is hugely important to families up and down the country. The OBR has said that the measures that we have taken today will mean that inflation is lower than it would otherwise have been. That means that the Bank of England is under less pressure to increase interest rates, which for reasons that he knows are such a worry for so many families.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Governor of the Bank of England said yesterday to the Treasury Committee that the mini-Budget has damaged our reputation internationally. He told us:

“People have said, ‘We did not think the UK would do this.’”

Why does the Chancellor not accept that it is because his party has destroyed our economic credibility and crashed the economy that the British people are now having to pay, in tax rises and public service cuts, the £55 billion of consolidation that he is talking about?

[Jeremy Hunt]

I have been pretty straightforward about saying that there were mistakes in the mini-Budget, and within three weeks we reversed them. Long-term gilt yields, which are the thing that really drive the cost of borrowing for the country, are down to the levels they were at before the mini-Budget, and to try to say that all the problems we face now are a result of decisions that were reversed in three weeks does not stand any scrutiny at all.

Oral Answers to Questions

Rushanara Ali Excerpts

Tuesday 15th November 2022 Commons Chamber

[James Cartlidge]

The Government are committed to delivering cheaper, cleaner and more secure power. That is why we included onshore wind in the latest auction round for contracts for difference, which have delivered a 50% technology cost reduction since 2015. The Government recognise the range of community views on onshore wind, and it is important that we strike the right balance between community interests and securing a clean, green energy system for the future. That is why we have committed to consulting on developing local partnerships for supportive communities in England who wish to host new onshore wind infrastructure.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Jeremy Hunt)]

I will be speaking for rather a long time on Thursday—

[Jeremy Hunt]

May I start again and say that, subject to your agreement, Mr Speaker, I may be talking for rather a long time on Thursday, so I will be brief today? I will just say that, despite the difficulty of the package I will be announcing, I will sadly not be drinking any whisky as I do so.

[Rushanara Ali]

I thank the Chancellor for the work he is doing and congratulate him on his new post. We hope that he lasts the week, or maybe the fortnight. The Government scandalously allowed organised criminals and fraudsters to take billions of pounds of public money through covid loan fraud as a result of the lack of proper checks. Estimates suggest that that has cost taxpayers £33 billion. Why should hardworking people pay for the Prime Minister’s fraud failures when he was Chancellor, and for the mini-Budget fiasco of the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), who crashed the—

[Mr Speaker]

Order. These are topical questions and are meant to be brief.

Economic Responsibility and a Plan for Growth

Rushanara Ali Excerpts

Wednesday 19th October 2022 Commons Chamber

[Rachel Reeves]

The point is that the Government are leaving billions of pounds of unneeded and unnecessary borrowing on the table. Why leave that money on the table when even the energy giants are saying that they have more money than they know what to do with? All that money has been put on borrowing and debt to be paid back by current taxpayers. Tens of billions of pounds have been left on the table by this Tory Government.

It has always been a question of who pays for support with bills. The Conservatives always put it on the never-never, but in the end it is working people who pay the price. In August, Bloomberg reported that the Government’s estimates of energy company windfall profits in the UK over the next two years could be £170 billion. The last Chancellor disputed that and so did the one before, but neither of them confirmed the actual figure. Why not?

Labour’s fiscal rules would protect the economy and protect families. We should not borrow a penny more than is absolutely necessary. That is why our motion

“calls on the Government to publish the Office for Budget Responsibility forecasts immediately alongside Government estimates of windfall profits for the next two years from energy producers in the UK.”

Doing so is in the public interest. Refusal to publish will only confirm that the Government are again putting the profits of energy giants ahead of the sky-high bills for families, pensioners and businesses.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Does my hon. Friend agree that the Government have still not learned a single thing? If they had learned anything from their mismanagement, the Prime Minister and the new Chancellor would have committed to using the profits of energy companies. That is what they should be doing: as my hon. Friend says, the companies want to be taxed to pay for the Government’s failures, rather than the Government cutting public services and hiking mortgage interest. Does she also agree that the Government need to get their priorities straight when it comes to getting rid of the cap on bankers’ bonuses?

[Rachel Reeves]

As a member of the Treasury Committee, my hon. Friend understands the issues well. The chief executive of BP says that his company is like a cash machine at the moment. We should be ensuring that companies pay their fair share. The war in Ukraine and the illegal invasion of Ukraine mean windfall profits that they could never have dreamed of, but they also mean the highest bills ever for families and pensioners, so the energy companies should pay their fair share.

--- Later in debate ---

[Mr Perkins]

rose—

[Rushanara Ali]

rose—

[Barbara Keeley (Worsley and Eccles South) (Lab)]

rose—

--- Later in debate ---

[Andrew Griffith]

As I said a moment ago, we have just eight sitting days now until the statement. Part of my role is to stay in very close touch with our highly valued banking community, and to continue to drive the competitiveness of the United Kingdom as a place for the financial services sector to make the prodigious contribution to the economy that Conservative Members particularly value. As the Chancellor said, we will continue to prioritise fiscal stability, and the United Kingdom will always pay its way. We will fund our promises, and we remain committed to fiscal discipline. That means that we will do whatever is necessary to ensure that debt as a share of the economy comes down in the medium term.

[Rushanara Ali]

I know that the Minister is relatively new to the job; I hope that he lasts longer than some of his predecessors. The Bank of England has made it clear that the mini-Budget has caused a material risk to the UK’s financial stability. As has been said, our constituents’ mortgages have gone up, and will be going up by £500, and by up to £900 in London and the south-east. Will he tell us what his Government will do to bring down those mortgages rates, many of which will be a direct consequence of the mini-Budget’s failures and fiasco?

Cost of Living: Support for Young People

Rushanara Ali Excerpts

Tuesday 18th October 2022 Westminster Hall

[Fabian Hamilton]

I thank my hon. Friend for her intervention, because I am just about to describe what a difference it makes to increase universal credit in line with inflation, rather than in line with wages. Her point is very well made indeed. If universal credit rose in line with wages, young people in my constituency and throughout the country—

[Rushanara Ali (in the Chair)]

Order. We have to suspend for Divisions in the House. There will be 15 minutes for the first Division, and then 10 minutes for each subsequent Division. Today’s final debate will have injury time added for those Divisions.

--- Later in debate ---

[Richard Fuller]

I just have one more minute—I think that is correct.

[Rushanara Ali (in the Chair)]

You can take an intervention if you want to.

[Richard Fuller]

In that case I would love to.

Economic Update

Rushanara Ali Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

I absolutely want to give my right hon. Friend that reassurance and I thank him, as someone who has enormous experience of how the City works, for the advice that he gave me over the weekend. One of the best things about the economic structures that we have is the interaction between institutions that have independence and that are able to give independent advice and Treasury and the Government. It has helped to create stability and I hope that what I have said today will bolster that further.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I congratulate the Chancellor on his appointment and I hope that he lasts longer than his predecessors. Five million people will see their mortgages go up, and the mini-Budget fiasco means, on average, £500 more on payments and, in London, nearly £900. Can the Chancellor assure us that he will look at how he will take that additional Prime Minister’s mortgage premium off people’s bills and take action to protect them in these difficult times? If he cannot, should they send the bill to him?

[Jeremy Hunt]

We have an absolute responsibility as a Government to do everything we can to hold increases in mortgage rates down as much as is possible, insofar as the Government have an influence on them through their actions. That is why I have taken, I think, very strong and quick steps to demonstrate the Government’s commitment to fiscal balance, but we are in a world in which, unfortunately, interest rates are going up everywhere and everyone is having to deal with increases in mortgage rates. We are thinking about the challenge for people who have those mortgages, but I want to make sure that that does not happen as a result of actions by this Government.

Economic Situation

Rushanara Ali Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

I am grateful to my right hon. Friend for mentioning the international comparisons again. The unemployment figure in the UK is 3.5%—inexplicably, Opposition Members have not asked about that—which is the lowest in my lifetime and compares favourably with that in France, where it is more than double, at 7.3%, and Italy, where it is 7.8%. Even in Canada, it is 5.2%, so our unemployment figures compare favourably internationally. As for the growth figures he asked about, if the three years are taken together, the figure is 11.7%, which heads the G7. That is nearly four times higher than Germany, at 3.9%, over double the figure for Japan, at 5.1%, and higher than the figures for France, Italy, Canada and the USA.

My right hon. Friend asked about supply-side reforms to help his constituents. He will hear a lot more about them in the coming weeks, both directly from Secretaries of State and from the Chancellor in the medium-term fiscal plan, to explain how we will get regulatory burdens off the back of businesses to help them to grow and create the jobs for his constituents that he rightly wants to see.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The mini-Budget fiasco has caused a material risk to the UK’s financial stability, and the Bank of England has said that $1 trillion could have been erased from UK pension fund investments if it had not stepped in after the mini-Budget turmoil. So the Minister needs to heed the advice of the Chairman of the Treasury Committee and others across the House, and junk the tax cuts in the Budget. They are unfunded and they are creating chaos in the markets. We need to restore confidence so that our constituents do not suffer. The Minister needs to stop being arrogant and take heed, listen to the expertise and take action.

[Chris Philp]

If the hon. Lady objects so much to tax reductions, why did she vote for them yesterday?

Oral Answers to Questions

Rushanara Ali Excerpts

Tuesday 11th October 2022 Commons Chamber

[The Chief Secretary to the Treasury (Chris Philp)]

My hon. Friend is a tireless advocate for that and other projects in his constituency. I and perhaps colleagues from the Department for Transport would be delighted to meet him and his county council colleagues to discuss that important project.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Chancellor was warned that unfunded tax cuts would force the Bank of England to increase rates and that is exactly what has happened. The Bank of England has said today that, in effect, the mini-Budget has caused a material risk to Britain’s financial stability. Can the Chancellor explain how people are supposed to pay their mortgages, which have gone up by £500 on average and £900 in London? What is he going to do about it, because it is not acceptable that his incompetence is risking people’s livelihoods?

[Kwasi Kwarteng]

I have two points to make on that. First, the Bank of England certainly did not say that the mini-Budget increased risk. Secondly, as rates are rising throughout the world, there is exposure. That is precisely why we thought that it was absolutely right to have the energy intervention, which is for two years—let us not forget that the Labour plan was for only six months —and to reduce the burden on people by reducing taxes.