Finance (No. 2) Bill

Sarah Olney Excerpts

2nd reading
Wednesday 29th March 2023 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

Households across the country are under immense financial pressure. Mortgage bills are up, the cost of the weekly shop is up, taxes are up and energy prices are up, yet the Bill offers no immediate help with the cost of living.

The Prime Minister has repeatedly promised to halve inflation this year, but the Bill does nothing to deliver on that goal. Instead of using the measures available to tackle rampant inflation, the Government are forcing countless shops, pubs and restaurants to pass increased costs on to their customers by slashing energy support for businesses by 85%. The price of clothes, food and a drink at the local pub will all go up because the Government are cutting support. Recent statistics emphasise the direct impact that increased costs for businesses have in fuelling inflation.

Last month, the rate jumped up to 10.4%, driven largely by the cost of food and alcohol in hospitality venues, but that jump was not mirrored globally. Inflation eased to 6% in the United States and to 8.5% in the eurozone, so why is the UK suffering from persistently higher rates of inflation than other large economies? The Government would like to pin the blame solely on external factors, but they are actively choosing not to tackle rising prices by supporting businesses with their energy costs. If the Government wish to be congratulated when inflation falls, they must also take responsibility when it rises.

The impact of the Government’s failure to tackle inflation is not only felt through increased prices in the shops. Earlier this month, the Bank of England raised interest rates for the 10th consecutive time, causing further misery for millions of mortgage holders who face soaring monthly payments. In my constituency alone, 15,000 mortgage holders are now vulnerable to soaring costs because of the Conservative chaos.

The Government could be doing so much more to support families with the immediate pressures of the cost of living. The Minister claims the Government are extending support with energy bills, but that is simply not true. People will pay more for their energy this year than they did last year, not less, even though gas prices are falling. In three months’ time, there will be no extra help in place whatsoever—the £400 discount is also gone. Fuel poverty will get worse, not better.

The Liberal Democrats would cut energy bills by £500, taking them back to the level they were at last April. The Government even had unspent funds available to do that, but they simply chose not to. The Liberal Democrats would also introduce targeted support for the most vulnerable households by doubling the warm home discount and the winter fuel allowance, as well as setting up an emergency home insulation programme to bring energy bills down in the long term. To fund additional support, we would implement a proper windfall tax on the super-profits of the oil and gas giants by raising the rate and abolishing the fossil fuel investment loophole—fair taxation that would redistribute windfall profits to directly benefit households.

Not only have the Government failed to get a grip of the cost of living crisis; they are hitting hard-working families with unfair tax rises, penalising people for every extra pound they earn at a time when wages are already declining in value. Meanwhile, households have seen no benefit from the increased taxes they pay. Schools and hospitals are stretched to breaking point, with no room left in their budgets to cover essential running costs, let alone to fund vital repairs to crumbling infrastructure. The Bill completely ignores our crumbling public services, condemning them to further decline.

The Chancellor has spoken of re-engaging economically inactive people in the labour market, but the Government have no plans to fix NHS backlogs and social care staff shortages, which is essential to reduce the nearly 2.5 million workers out of work due to ill health. They cannot fix workforce problems with people with ill health if they do not fix the NHS and social care. The Government just do not seem to get that.

Above all, the Bill fails yet again to implement measures that would deliver strong, sustainable and fair growth for the UK economy. Business investment in the UK is the lowest in the G7. We urgently need to boost private sector investment in our businesses to get on the path to sustained growth. The Conservatives’ policy on that has failed badly. The lack of industrial strategy and their constant flip-flopping on tax and investment rules have not achieved the growth they promised us.

The business community has been vocal about the damage caused by the Government’s decision to scrap research and development tax credits for SMEs in the autumn statement. I was therefore disappointed by the lack of movement in that area in the Bill. I urge Treasury Ministers to reconsider their policy and to reinstate the R&D tax credits for SMEs in full. Such incentives are vital to enable small businesses to fully explore the opportunities opening up, particularly in the digital sphere, artificial intelligence and robots, and to ensure that the UK can continue to be a powerhouse of technical innovation.

The Government should also explore other tax incentives proven to boost productivity, such as tax breaks for training, digital investment and upgrades to energy efficiency. Instead, we have another temporary measure that fails to give businesses the confidence to make investment plans for the future.

Despite its 450 pages, the Bill offers nothing to support households or businesses with immediate cost of living pressures. Families are looking to the Government for support, but they are met with unfair tax hikes and crumbling public services, all the while being left to suffer the effects of rampant inflation, soaring interest rates and declining wages. The Liberal Democrats are calling for more support with energy bills, both for households to deal with the cost of living and for businesses to help curb inflation. We are calling for a proper plan for fair and sustainable economic growth, and urgent action to clear NHS backlogs and to ensure that those suffering from ill health are able to access the care that they need to return to the workforce. The Bill fails to address those points, and the Liberal Democrats will vote against it.

Silicon Valley Bank

Sarah Olney Excerpts

Monday 13th March 2023 Commons Chamber

[Andrew Griffith]

I am not going to offer my hon. Friend that guarantee, as that would not be prudent or the right thing to do. I can guarantee that this Government will do everything possible to reconcile the needs of protecting customers, protecting financial stability and protecting the taxpayer. It is of great note that we were able to do that in this transaction, and if such an issue were ever unfortunately to reoccur, all our energy would be devoted to precisely the same ends.

[Sarah Olney (Richmond Park) (LD)]

I very much welcome the purchase of Silicon Valley Bank UK by HSBC this morning, not least because I am a former employee of a company that had exposure to the bank on both sides of the Atlantic and whose chief executive officer was one of the signatories to the letter sent to the Chancellor on Saturday. Statements were made by the UK bank on Thursday and Friday, and if depositors had relied on the assertions made in those statements, and if the purchase had not gone through this morning, those depositors would have incurred losses. Will the Minister confirm whether that constitutes a breach of the regulations? If it does, will there be any sanctions for people identified as having committed those breaches?

[Andrew Griffith]

I am delighted that the hon. Lady’s constituents benefit from the certainty. It was a terrible weekend for everybody who was a depositor or who was in some way dependent on SVB UK. That is why it was so important that we not just achieved this outcome and that the regulatory structure and laws laid down by Parliament allowed us to do so, but that we were able to act decisively. I welcome the fact that another great British bank, HSBC, has stepped in, and I wish it and all the employees well.

It would be inappropriate for me to comment on particular things that were said. Fortunately, we are in the position that every depositor has been made whole, and therefore that issue does not arise.

IMF Economic Outlook

Sarah Olney Excerpts

Tuesday 31st January 2023 Commons Chamber

[James Cartlidge]

My right hon. Friend speaks with great expertise as both a former Secretary of State and a Select Committee Chair, and he is absolutely right. Whatever forecasts say, we have a clear strategy for long-term growth in this country that comes from supporting high-growth sectors. I am glad he mentioned the Chancellor’s speech on Friday, which spoke about the fact that we are only the third economy in the world with $1 trillion tech sector—I know the shadow Chancellor does not like that fact, but we are—and we should be proud of that. Of course we want to build further on that. That is how we will deliver strong, sustainable growth in every part of the United Kingdom.

[Sarah Olney (Richmond Park) (LD)]

The UK economy has faced a triple whammy in recent days: the IMF forecast saying that the UK is the only major economy that will slide into recession this year, an Office for National Statistics survey setting out the true horror of this winter of discontent, and insolvency figures out today showing that more companies are going bust than at any point since the 2009 crisis. Can the Minister tell me when and where the Brexit benefits will begin?

[James Cartlidge]

I am grateful to the hon. Lady, as ever. Of course she misses out the fact that we have the lowest unemployment for the best part of 50 years. We should all be very proud of that. We know the scars caused by high unemployment and we know that when the pandemic started, unemployment was predicted to finish 2 million higher than it ended up because of the measures taken by this Government and by the Prime Minister when he was Chancellor, with furlough and so on. We will continue to support households. The hon. Lady talks about a winter of discontent, but, as I said, we are providing £1,300 of support for a typical family with their energy bills this winter. That shows we are on their side, but we need to go further, and we do that by delivering on the target to halve inflation.

Non-domestic Energy Support

Sarah Olney Excerpts

Monday 9th January 2023 Commons Chamber

[James Cartlidge]

My right hon. Friend asks an important question. Like him, as an MP representing an East Anglian arable constituency, I am aware of the importance of such businesses to the wider agricultural sector. As I said to the hon. Member for Bristol East (Kerry McCarthy), we will be publishing a list on gov.uk showing those energy and trade-intensive industries that are eligible for the higher level of support; I refer him to that. I am also happy to write to him to confirm it exactly, because within one sector there will be a range of different types of industry that may qualify.

[Sarah Olney (Richmond Park) (LD)]

At the end of October, I had a meeting with a number of publicans in my constituency. They were looking forward to strong demand during the World cup and over Christmas, but they were deeply, deeply concerned about what would happen between January and March in particular. They were desperate for clarity on support for fuel bills. The fuel bills issue is the biggest issue they are experiencing, although it sits alongside other pressures such as staff shortages, supply chains and so on. What consultation did the Treasury have with UKHospitality and other bodies before making today’s statement and the new policy on fuel bills? What discussions did it have with UKHospitality about other potential forms of support for the sector as it comes through the crucial first quarter of 2023, which will be so challenging?

[James Cartlidge]

All I can say is that I suspect pubs did get a boost from the World cup. I wish it had run for longer, but I am afraid that is beyond my control. We very much enjoyed the tournament none the less. I understand the challenges facing hospitality. In my statement on our last but one sitting day of 2022, I announced the six-month extension of the freeze on alcohol duty. This has been a particularly challenging time for pubs. As the hon. Lady knows, we are in the middle of the £18 billion EBRS support, which has helped pubs in particular. We have been clear that we have continued what is effectively a universal scheme, notwithstanding the specific extra support for the energy and trade-intensive sectors. UKHospitality has been included in that consultation. That has happened at an official level, but also through the Chancellor and me, with the voluntary sector and others. We continue to engage very closely with UKHospitality through our Department, the Department for Business, Energy and Industrial Strategy and others on those matters.

Financial Services and Markets Bill

Sarah Olney Excerpts

Report stage
Wednesday 7th December 2022 Commons Chamber

[Richard Fuller]

I am afraid I cannot give way because of your desire to get on, Madam Deputy Speaker, which I completely agree with.

Amendments 1 and 4 bring in the importance of transparency for those two regulators, the FCA and the PRA. We do not want to see regulators going away into a secret room, not telling anyone what the cost-benefit analysis is, and then coming out and saying, “We’ve decided it is X.” We need true transparency on their deliberations and on the opinions that they have received. I am very specific in those amendments.

The hon. Member for Hampstead and Kilburn (Tulip Siddiq), the shadow spokesperson, who is not in her place, spoke about her concerns about the intervention power, which I think she completely mislabelled as a dangerous thought—I think it is a fairly reasonable thought. In her absence, I will just say to those on the Opposition Front Bench that what looks good in an era of declining yield curves and quantitative easing in a democratic country may look differently in an era of rising yields and quantitative tightening.

My amendments are quite specific. The Minister has been supportive throughout the process and I look forward very much to hearing his conclusions in his summing-up.

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats recognise the importance of good regulation. Well-designed, effectively administered, properly enforced regulation creates a level playing between competitors and instils confidence in consumers and players in all markets. As the Liberal Democrats’ Treasury and business spokesperson, I have spoken to many businesses in many sectors, including in the City, and I have not found anywhere an appetite for the sweeping away of regulations often advocated by Members on the Conservative Benches. Everywhere I hear calls for effective regulation, properly administered.

[Andrew Griffith]

Would the hon. Lady be able to identify any Member of this House who has talked about the merits of sweeping away regulation? That is not the position of the Government.

[Sarah Olney]

With respect, I did not say it was the position of the Government, but the Minister cannot deny that it has been advocated for on many occasions during the referendum campaign and on many occasions since. I think he is being disingenuous.

Although the Liberal Democrats welcome some aspects of the Bill that will update the regulatory framework for financial services, we remain concerned by the lack of accountability of the regulators to Parliament and by the potential impact of this Bill on financial stability. The Government have described this Bill as a once-in-a-generation opportunity to reshape financial regulation, but as currently written the Bill lacks ambition and inspiration. In particular, it is a missed opportunity to create a regulatory framework that turbocharges the green agenda and strengthens protections for victims of fraud.

My fundamental concern with the drafting of the Bill is how it undermines the role of Parliament while extending significant new powers to both regulators and the Treasury. As ever, the devil is in the detail, which will be largely hidden within secondary legislation that will not receive parliamentary scrutiny or oversight. Accountability and transparency are the cornerstone of effective regulation. It is vital that those principles are upheld to maintain national and international confidence in the UK’s financial services sector and to improve the operational performance of regulators.

The Bill did not previously contain sufficient powers to require the regulators to report on their performance against their objectives. I am therefore pleased that the Government have made some steps towards improving accountability and transparency though the addition of new clause 17. However, the new clause still does not go far enough in establishing parliamentary oversight of the regulators. Regulators’ powers are granted by Parliament, and that is who they should be accountable to—not to a Minister who may only be in place for a matter of weeks.

I remain concerned that the new statutory objective on international competitiveness could increase risk-taking in the financial services sector. We do not need to be reminded of just how damaging that sort of behaviour can be. I am particularly concerned that the secondary objective of competitiveness will negatively impact the regulator’s delivery of its primary objective of ensuring financial stability.

Our amendments (a) and (b) to new clause 17 would place additional requirements on the regulators to report on the delivery of their objectives, including with an assessment of the impact of the Bill on financial stability. If the last few months have proved anything, it is that volatility in financial markets has a very real and direct impact on households, so I urge the Government to think about how the Bill can be strengthened to ensure that financial stability remains at the forefront of regulators’ activities.

I am pleased to see that a number of amendments on green finance have been tabled, but it is disappointing to see the Conservatives’ lack of ambition in that area. We have such an opportunity to be a leading global centre for green finance, but the Bill does nothing to facilitate that. There is an increasing appetite among investors to support the green transition, but British businesses often struggle to access the green capital they need. New clause 33, tabled in my name, would place a requirement on the regulators to report on ways in which they have promoted and incentivised green finance and green investment. Time is running out for us to lead the world on this, and I urge the Government to commit to a green finance strategy and to start thinking seriously about how a regulatory framework can mobilise green finance.

Russia: UK Companies

Sarah Olney Excerpts

Wednesday 7th December 2022 Commons Chamber

[James Cartlidge]

I am grateful to my hon. Friend, who speaks with great expertise on these matters. The key point is that the action in relation to oil was agreed at G7 level with Australia. He talked about the review, and it is very much about the constant dialogue we have with international partners—that is where we will be reviewing these things. Obviously, it is a step we have only just taken, but I am happy to confirm that, as ever, the Treasury keeps all these matters under review.

[Sarah Olney (Richmond Park) (LD)]

On 17 November, my hon. Friend the Member for St Albans (Daisy Cooper) asked the Prime Minister whether he agreed that

“private citizens in the UK should follow the example of several British businesses and sell any shares they have in businesses that still operate in Russia”.—[Official Report, 17 November 2022; Vol. 722, c. 837.]

For some reason, the Prime Minister was unable to give my hon. Friend an answer on that occasion, so I wonder whether the Minister might be able to answer that question today.

[James Cartlidge]

That is an important point and I understand why the hon. Lady asks about it. In March the Prime Minister—as Chancellor—set out our very strong position on urging companies to divest, making it clear that there was no further case for investing in Russia. As for what happens with individual shareholdings, I said that I would not comment on specific companies and, to be fair, the hon. Lady has not asked me to. However, as I hope we can all acknowledge, it is not necessarily straightforward to divest. We want companies to do that, but as I said to the right hon. Member for Barking (Dame Margaret Hodge), if firms divest their shares, they have to be clear that any new owners will comply with the sanctions regime and that they will not be sold on to an entity or individual who is part of the regime. It is not straightforward, but that does not mean that we do not want every possible step to be taken to divest.

Finance Bill

Sarah Olney Excerpts

Committee stage
Wednesday 30th November 2022 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

I feel that I should first explain why I have a teddy bear on the Bench beside me, because various people have been making eyes at me. The bear is the prize for my Christmas card competition. As I am en route between the gift shop and having a photograph taken with the Prime Minister, I thought that I would sit him there.

As I said on Second Reading, I very much welcome the whole thrust of this Bill, which is needed to balance the books. I will not repeat what I said then, but I have a few comments on some of the amendments. First, amendment 2 to clause 5, tabled by the hon. Member for Richmond Park (Sarah Olney), is about trying to publish the number of taxpayers who get caught in higher rate bands as a result of this Bill. I very much welcome tax transparency, and I very much welcome His Majesty’s Revenue and Customs telling people how much tax they will pay. There are many measures that we could take to promote tax transparency, but I can say with a high degree of confidence that, if this amendment were to pass, HMRC would not need to write to one single member of the public, because it is fundamentally based on a complete misunderstanding of how fiscal drag works.

The Bill keeps the personal allowance and the higher rate thresholds as they are, so somebody earning, say, £12,000 a year will not pay the base standard rate of income tax now and they will not pay it next year. The way that fiscal drag works is that people get pay rises, which push them into a higher rate band than if they had not got that pay rise, but that is not as a result of a change in the Bill. The wording of the amendment says that

“they have become liable to pay the basic rate of income tax (when they were not previously so liable)”.

It is mathematically impossible to have someone not liable at the moment who will then become liable as a result of the Bill.

[Sarah Olney (Richmond Park) (LD)]

I just want to clarify that what we are talking about in this amendment is where people are getting pay rises, and even though most people are not getting inflation-rate pay rises, they are nevertheless getting higher cash rises than they normally would have done because of the rate of inflation. For some people that will mean that they will paying income tax for the first time if their rise takes them above the personal allowance threshold, or, indeed, if it takes them above the higher rate threshold. That is what the amendment is designed to address—the fact that there will now be some people paying 40% tax on their increased salary, which, if the thresholds had risen in line with inflation, they would not have done. I am pleased to have had the opportunity to clarify that.

[Anthony Browne]

I am well aware of how fiscal drag works. I have been studying it, reporting on it and commenting on it for about 20 years. My point was that, as the amendment is worded, the person would have become liable to pay the base rate of income tax when they were not previously so liable. If they are not liable now, they will not become liable as a result of this Bill. The hon. Lady could have changed the wording of the amendment—she would need to go to lawyers to work out the wording—but, as it stands, literally no one falls into that category. The one category in which people could end up in higher tax bands as a result of the Bill is not actually mentioned, which is the lowering of the threshold for the additional rate of tax from £150,000 a year to £125,000 a year. So for example, if a person was earning £130,000 a year, they would not be liable for the additional rate of income tax—the 45p rate—now, but they will be as a result of the Bill. However, the hon. Lady’s amendment does not mention that; it mentions the standard rate and the lower rate, for which the thresholds are kept stable.

New clause 8 has not been selected, but the hon. Members for Ealing North (James Murray) and for Gordon (Richard Thomson) both talked about non-doms. I just point out that there is a lot about non-doms that I would tidy up. It is clearly not a perfect system, and I do not think that anybody would defend it. None the less, it was there throughout the time of the last Labour Government. They did many reviews on it—I remember those reviews—and they sort of tinkered with it a little bit, but fundamentally left it the same. They agreed with the arguments currently put out by the Government that it is an overall net gain for the UK economy and for the UK taxpayer.

Energy (oil and gas) profits levy

Sarah Olney Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

This is a cost of chaos Budget. Everyone is now paying the price for Conservative incompetence. This Conservative Government crashed our economy with their reckless, unfunded tax cuts. They have presided over years of low growth, low investment and declining productivity, and now they are eroding our public services and hiking taxes on ordinary people, all while slashing taxes on the big banks and refusing to close the windfall tax loophole that has allowed Shell to avoid paying a single penny.

The British people need a Government with a plan for a fairer economy that can secure future prosperity.

[Dr Fox]

Will the hon. Lady give way?

[Sarah Olney]

I will not give way, as the right hon. Gentleman has just spoken.

The British people need a Government who truly value public services, and who focus on removing barriers to economic growth by tackling workforce issues and rebuilding trade, yet all we have instead is Conservative chaos and incompetence. Thanks to the Conservatives’ economic mismanagement, Britain is getting poorer; we are all getting poorer.

Families across the UK are set for the largest fall in living standards since records began. The coming months will see family budgets put under extreme pressure. Mortgage payments are set to explode, doubling to their highest level on record next year. Energy bills will be almost £2,000 a year higher than they were in 2021, and the weekly shop is becoming more and more expensive. This is simply unmanageable with the tax rises announced by the Chancellor.

The Conservatives’ disastrous mini-Budget cost the public finances £30 billion, and now the Government have hiked taxes by £24 billion, forcing the public to clean up their mess. Everyone will be hit by unfair stealth tax rises, and more than 5 million people will be dragged into a higher band as a result, yet they will not see any benefit from the higher taxes they pay.

The Conservative Government are trying to pin the blame for all our economic woes on global factors, but the fact is these global challenges are hitting the UK harder than other major economies. We are set for the worst GDP decline in Europe next year, we are the only G7 country to have a smaller economy than before the pandemic and we have the third lowest growth forecast in the OECD.

Businesses are also really struggling right now. Conservative chaos and incompetence are forcing small businesses to suffer under crippling uncertainty, and many have already closed their doors. Last week, I spoke to a group of independent publicans in my constituency, and every single one had grave concerns about the future viability of their business. One publican told me that their current situation is 10 times worse than during the pandemic, because this time round they have no support from the Government. The business rates relief announced in the autumn statement is cold comfort to a sector that was promised a fundamental review of the unfair rates system. The previous reduction of VAT to 5% gave hospitality a lifeline during the pandemic, and the publicans I speak to say that a return to this rate would provide much-needed relief in the new year as the cost of living really starts to bite.

Publicans also need urgent clarity on energy bill support after April, as they will not be able to survive without continued assistance. I urge the Government to listen to the concerns of the hospitality sector, which is so integral to business, British industry and local communities. I would welcome a statement from the Minister for Enterprise, Markets and Small Business, the hon. Member for Thirsk and Malton (Kevin Hollinrake), on the steps the Government will take to support hospitality in the months ahead.

I was pleased to hear the Chancellor finally acknowledge workforce constraints in his speech last Thursday. Economic inactivity is a huge barrier to growth, and I welcome the review of the issues holding back workforce participation. In his review, I urge the Secretary of State for Work and Pensions to consider the impact of our inadequate childcare system on women’s participation in the labour market.

The Conservatives must also accept that their failure to deliver effective public services has led to a dramatic increase in the number of people who are long-term sick. The OBR forecasts that an additional 1.1 million people will need health and disability benefits in four years’ time, taking the number registered as unable to work to a record high of 3.5 million.

The UK’s labour shortages cannot be filled by a review of workforce participation alone. We must also look at our broken visa and immigration system, and acknowledge the impact that Brexit has had on our labour market. Brexit has also been disastrous for UK trade. Rather than opening up opportunities for global trade, businesses have been inundated with red tape. The OBR forecasts that the UK’s trade intensity will be 15% lower in the long term than if we had remained in the EU. Trade is vital for economic growth. It is way beyond time that the Government finally got a grip and started rebuilding our trading relationships.

The Liberal Democrats are the only party with a comprehensive plan to rebuild trust and co-operation with Europe, to rebuild ties with our largest trading partner and to grow our economy. The Conservatives have no plan for future prosperity. We need a plan for an innovation-led economy aligned to net zero; one that sustains economic growth and fuels a fairer society with high-quality public services. Instead, the Conservatives have inflicted higher taxes and weaker public services on everyone, all without a proper mandate and all to pay for the damage that they caused in the first place.

Autumn Statement

Sarah Olney Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

I thank my hon. Friend the Father of the House. He is right. What I have discovered in the short time that I have been doing this job is that although one might arrive thinking that decisions about money are about numbers and spreadsheets, they are actually about values. Today, I have tried to express our values not just as a Conservative party but as a country. That means protecting the most vulnerable.

[Sarah Olney (Richmond Park) (LD)]

This cost-of-chaos Budget will cause untold pain for everyone, with soaring mortgages, unfair tax hikes and further cuts to our struggling public services. This Conservative Government have plunged the economy into chaos, and now they are forcing ordinary families to pay for their incompetence. For an average family, it will mean thousands of pounds in increased taxes and bills, yet their local services are being cut while their real-terms pay is decreasing. My question to the Chancellor is simple: who voted for this? It certainly was not the British people.

[Jeremy Hunt]

I think the hon. Lady must have written her speech before actually listening to what I said. She talked about soaring mortgages, but she might have heard the OBR confirm today that because of the decisions we have taken, inflation will be lower, and that means less pressure on interest rates and less pressure on mortgages. The truth is that the people of this country voted for a Conservative Government because they know that we will take the tough and difficult decisions necessary to deal with a global pandemic, a global energy crisis and a global economic crisis, and that is what we have done today.

UK Infrastructure Bank Bill [Lords]

Sarah Olney Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

I welcome the Chief Secretary back to the Dispatch Box; it is genuinely a pleasure to see him back. It is quite ironic that we are here today to discuss setting up or reinstating something that was previously working well, because that rather mirrors his career. As has been mentioned, we had a green investment bank—it was a Liberal Democrat creation during the coalition Government years—and what we are really doing is setting it up again. It was sold off to the private sector, as the right hon. Member for Dundee East (Stewart Hosie) mentioned, and it made £144 million in profit for its new Australian owners last year, which just goes to show what an important role is being played by our funding partners for our climate change objectives.

The Liberal Democrats believe that it was a short-sighted move to sell off the green investment bank in the first place, so we very much welcome this Bill to set up something similar again. However, we worry that it might be too little and too late to make a real impact. Over the past seven years, numerous opportunities will have been missed to make substantial investments that could have made a real difference in progressing towards our net zero targets.

One of our big concerns is that the infrastructure finance that will be made available through the bank is very small in comparison with the challenges that we face with climate change and with levelling up. The bank will therefore need to mobilise a huge volume of private finance to meet the Government’s infrastructure goals and international climate goals. The bank has £22 billion of financial capacity over the next five years, but the Institute of Chartered Accountants has estimated that we will need £40 billion of investment per year to deliver net zero by 2050, and the Office for Budget Responsibility has projected that £1.4 trillion of investment will be needed by 2050 to deliver our climate change objectives. We really need the bank to be a success and mobilise those funds if we are to honour our climate commitments.

The Bill rightly identifies tackling climate change and achieving net zero as its strategic objectives, alongside supporting regional and local economic growth. However, as Liberal Democrat colleagues in the Lords have expressed, there is a need for a joined-up approach to protecting our environment, with biodiversity included as an objective alongside climate change. Since the Government sold off the green investment bank, the markets have failed to deliver on developing floating offshore wind, electric vehicle charging infrastructure, marine and tidal energy, broadband roll-out, carbon capture and storage or insulation—there is such a long list. So many green technologies could have been supported via the continuation of the green investment bank.

We want more ambition from the Government on the green agenda. We would like to see net zero achieved by 2045 rather than 2050, with a proper green industrial strategy so that we have a long-term plan in place. We want bold action to fire up net zero, from new targets for zero-carbon flight to new industrial strategies for hydrogen and power cabling and a major restructuring of the UK economic model to ensure that it is fit for the future.

To achieve climate targets, we need to limit warming to 1.5° by 2030. I welcome the Government’s concession in the other place that they will include investment in energy efficiency in the bank’s remit, as they have repeatedly failed to decarbonise our housing stock and take steps to reduce fuel poverty, but it is important to remember that effective investment requires much more than making money available. We need to ensure that finance is channelled into developing the skills needed to enable a green transition and help British businesses to become global leaders in key future technologies.

In 2012, the green investment bank was created. Ten years later, we are starting again, but the Liberal Democrats wish the project well. We want the Bill to proceed swiftly through the Commons and the bank to be successful.