Category: Economy

  • Angela Rayner – 2021 Comments on Treasury Select Committee Report on Greensill

    Angela Rayner – 2021 Comments on Treasury Select Committee Report on Greensill

    The comments made by Angela Rayner, the Leader of the Labour Party, on 20 July 2021.

    The fact that David Cameron apparently did not break any rules during the Greensill scandal proves that the rules that are supposed to regulate lobbying are completely unfit for purpose.

    The ACOBA system is pointless and toothless. As this case shows, it causes more harm than good by giving a veil of legitimacy to the rampant cronyism, sleaze and dodgy lobbying that is polluting our democracy under the Tories.

    Labour will ban former Ministers from lobbying government for at least five years after they leave office, and overhaul the current broken system and replace it with an Integrity and Ethics Commission that will close the revolving door and stamp out sleaze.

  • Rishi Sunak – 2021 Fiscal Risks Report Statement

    Rishi Sunak – 2021 Fiscal Risks Report Statement

    The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 6 July 2021.

    In accordance with the charter for budget responsibility, the OBR has today published its third fiscal risks report (FRR). FRR 2021 provides an update on the risks identified in previous reports, alongside focused coverage of three areas of fiscal risk: the coronavirus pandemic, climate change, and the cost of Government debt. I am grateful to the Budget Responsibility Committee, and staff of the OBR, for their work in preparing this report, which ensures that the UK continues to be at the forefront of fiscal transparency and management during these unprecedented times. The report was laid before Parliament earlier today and copies are available in the Vote Office. The Government will respond formally to FRR 2021 within the next year.

    The UK has experienced two “once-in-a-generation” economic shocks in just over a decade, and the challenges faced by the UK since the start of the pandemic have been substantial. Action taken over the last decade to restore the public finances to health enabled the Government to fund a comprehensive package of support for the economy when most needed. The report notes that our direct support to businesses helped keep many of our employers afloat, kept insolvencies in check and avoided the kind of credit crunch that occurred during the financial crisis. The Government have acted on a scale unmatched in recent history to protect people’s jobs and livelihoods and to support businesses and public services across the UK. Taking into account the significant support confirmed at spending review 2020 and Budget 2021, total announced support for the economy in response to covid-19 is £352 billion across 2020-21 and 2021-22.

    The report highlights the range of spending choices and risks we face, particularly relating to pandemic spending. These will be considered at the spending review. As the report notes, spending is increasing in cash terms, real terms, and as a share of GDP overall. Total managed expenditure is forecast to rise by 2.1% of GDP between 2019-20 and 2024-25. Core departmental spending is set to grow at an average of over 3% in real terms over this Parliament. Our plans will deliver the largest real-terms increase in departmental spending for any full Parliament this century.

    It is clear that unmitigated climate change is another significant fiscal risk and decarbonisation is essential for sustainable long-term growth and therefore also for the health of the public finances. The fiscal consequences of transition to net zero will need to be managed in line with the Government’s broader fiscal strategy. The Government will publish our net zero strategy later this year, which will set out more detail on how we will meet our net zero target.

    The pandemic and the Government’s necessary policy response has led to an unprecedented increase in Government borrowing and debt; FRR 2021 illustrates how this has made the public finances more sensitive to changes in interest rates. While borrowing costs are affordable now, interest rates and inflation may not stay low forever. The OBR’s latest forecast recognises that the Government’s current fiscal plans deliver a stable medium-term outlook for public sector net debt, but as I set out at that Budget, we need to pay close attention to the affordability of that debt.

    The risks discussed by the OBR in this report underline the importance of returning our public finances to a more sustainable path. The report finds that, in the face of many potential fiscal risks,

    “fiscal space may be the single most valuable risk management tool”.

    That is why the Government set out at Budget 2021 a plan for returning the public finances to a more sustainable path. It is vital that we rebuild fiscal space to ensure that the Government can maintain fiscal resilience to respond as future risks materialise, continue to invest in excellent public services and give businesses and citizens across the UK the certainty that comes with knowing we can and will support them.

  • Kwasi Kwarteng – 2021 Statement on Stellantis Investment at Ellesmere Port

    Kwasi Kwarteng – 2021 Statement on Stellantis Investment at Ellesmere Port

    The statement made by Kwasi Kwarteng, the Secretary of State for Business, Energy and Industrial Strategy, in the House of Commons on 6 July 2021.

    I am delighted to welcome the confirmation by Stellantis of a transformational investment at its Vauxhall plant in Ellesmere Port, which will see the site become the first mass volume, fully battery electric vehicle plant in the UK and Europe. Stellantis have committed to investing more than £100 million to transition the plant to produce a new generation of electric vehicles, safeguarding the future of the site and its supply chain for the next decade.

    This announcement demonstrates that our net zero ambitions are being welcomed and matched by business, as we work towards increasing the manufacture of electric vehicles in the UK. The Government are committed to ensuring we continue to be one of the best locations in the world for automotive manufacturing and are working closely with the sector to make sure it remains competitive, attracts investment, and protects and creates jobs.

    Just over six months ago we presented the Prime Minister’s 10-point plan for a green industrial revolution, setting an ambitious road map for transforming our economy, unlocking investment and levelling up the regions. The plan included a commitment to phase out the sale of new petrol and diesel cars and vans by 2030. The decision by Stellantis to invest in electrification in the UK, alongside recent announcements by Nissan and Envision in Sunderland, are excellent illustrations of business and the Government working together to achieve decarbonisation within the sector.

    I was pleased to inform the House in June of the strong consumer growth over the past year, which our strategy is helping to drive. As of March 2021, battery electric vehicle sales stood at 7.7% of the market, up 88% on a year earlier, while plug-in hybrid vehicles sales were 6.1%, an increase of 152%. Changing consumer habits such as the way we shop have also driven a strong increase in demand for light commercial vehicles, and this announcement will help transition the fleet with a new vehicle produced here in the UK. This investment will grow domestic production of electric commercial vehicles, help reduce our reliance on imports and play an important part in reducing emissions in towns and cities across the country.

    I am sure Members will agree that this is an important announcement for Cheshire, Merseyside and the north-west of England, which secures the continued presence of a key anchor for the local and regional economy. This significant investment has been secured thanks to a strong partnership approach between Stellantis and the Government, alongside Cheshire West and Chester Council, and the Cheshire and Warrington local enterprise partnership to maximise the benefits of the transformation of the plant to the wider local economy.

    This news will be welcomed by the workforce at Ellesmere Port and is a testament to their skills and hard work. The Ellesmere Port plant has been a crucial part of automotive manufacturing in the UK since it first opened nearly 60 years ago. This announcement means that that milestone will be marked next year with the production of its first all-electric vehicle—building a sound future on Vauxhall’s proud legacy.

    Today’s announcement is further proof that there is a bright future for automotive manufacturing in this country. The Government are committed to supporting this transition including £500 million to support the electrification of UK vehicles and their supply chains, as part of a wider commitment of up to £1 billion. As Secretary of State I will continue to champion the sector, ensuring that we make the most of the opportunities of the transition to zero-emission vehicles and attract further investment, boost innovation and sustain tens of thousands of jobs in manufacturing and the supply chain.

  • Bridget Phillipson – 2021 Comments on Latest GDP Figures

    Bridget Phillipson – 2021 Comments on Latest GDP Figures

    The comments made by Bridget Phillipson on 9 July 2021.

    After causing the UK to experience the worst economic crisis in the G7, the Conservatives should be getting the economy powering on all cylinders. Instead, this morning’s growth data shows how fragile the UK’s economic recovery is.

    Instead of the Conservatives’ failure to secure the recovery, Labour’s plan to buy, make and sell more in Britain would mean seizing new opportunities to shape a new future for Britain. This would give people new skills and jobs here in the UK, bring security and resilience back to our economy and public services and help our high streets to thrive again.

  • Alister Jack – 2021 Comments on Scottish GDP Figures

    Alister Jack – 2021 Comments on Scottish GDP Figures

    The comments made by Alister Jack, the Secretary of State for Scotland, on 23 June 2021.

    The UK Government has taken swift and robust action to deal with the pandemic. We have supported more than 900,000 Scottish jobs, given thousands of businesses vital loans, and VAT cuts have kept firms in the hardest hit sectors afloat.

    On top of this direct support, the Scottish Government has received more than £14.5 billion in additional funding. And the successful UK-Government-funded vaccine programme is giving us optimism for the future.

    We are beginning to emerge from these uncertain times, and three consecutive months of growth is encouraging. But we know we still have a huge amount to do to recover our economy, and that families and businesses across Scotland still need our help.

    A strong and stable recovery is the UK Government’s sole priority. Growth deals across Scotland have seen investment of £1.5 billion and our new UK-wide funding programmes will benefit communities right across the UK.

  • Rishi Sunak – 2021 Statement on the UK Infrastructure Bank

    Rishi Sunak – 2021 Statement on the UK Infrastructure Bank

    The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 17 June 2021.

    The UK Infrastructure Bank has begun operating in an interim form and is open for business.

    The bank, owned and backed by the taxpayer, will support and enable private and public investment in infrastructure, with core objectives to help tackle climate change, particularly meeting our net zero emissions target by 2050, and to support regional and local economic growth. The Government and the bank have also set out the institution’s investment principles today which will guide how it delivers its objectives.

    HM Treasury and the UK Infrastructure Bank have entered into a keep well agreement to ensure that the bank has sufficient funds to be able to meet its payment obligations in full as they fall due.

    The UKIB will be headquartered in Leeds, and will operate across the whole of the UK, supporting projects in England, Scotland, Wales and Northern Ireland. Over the coming months, the bank will continue to build its capability and capacity as it establishes itself as an independent institution.

    The Government are also publishing the bank’s initial framework document, which sets out the institution’s relationship to the Government.

    A copy of the framework document, alongside an unexecuted copy of the “Keep Well Agreement”, which has information redacted on the basis that it contains either commercially sensitive or personal data, will be placed in the Library of the House.

     

  • Rachel Reeves – 2021 Speech on the State of the Economy

    Rachel Reeves – 2021 Speech on the State of the Economy

    The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, on 16 June 2021.

    Five years ago, my friend and colleague Jo Cox was murdered. There is not a day goes by when I do not think of her, and I know that on both sides of the House she is missed dearly.

    All the way through this pandemic we have said that the economic and health responses must go together. That means keeping support in place for as long as the public health measures demand it. When the public health restrictions are extended, as they were by the Prime Minister on Monday, the economic support should be extended too; otherwise we risk falling at the final hurdle. Having spent billions of pounds supporting the economy, it would be tragic to see thousands of businesses go to the wall just because the Government withdrew support a few weeks too soon. We are not calling for forever support, but for economic support that matches the timetable for opening up that the Government have set. That is the right thing for business, for workers, and for our economy too.

    Let us be clear about why we are here today: the Government’s delay in putting India on to the red list has allowed a dangerous new variant to enter our country. That is why we have the highest covid infection rate per person across the whole of Europe—all because the Prime Minister wanted his VIP trip to India. It was vain and short-sighted and has been devastating for public health. As well as the health impact, our assessment, using Office for National Statistics data, tells us that the delay in reopening will cost the UK economy £4.7 billion. That is money that is not being spent in British businesses at a crucial time in our recovery. That £4.7 billion would have been used by businesses to pay commercial rents, to pay people’s wages, to invest, to take on new staff, and to pay taxes into the Treasury as well.

    Of course I welcome what the Chief Secretary has to say today on commercial evictions, but the truth is that if the Chancellor believed that this economic package was enough, he would be here announcing it himself. Whatever this is, it is not doing “whatever it takes” to support British businesses and our economy. Given that the Government have moved the goalposts, let me ask the Chief Secretary why Ministers have not delayed the employer contributions to furlough, due to start on 1 July. Employers are being asked to pay more when they cannot even properly open for business.

    The vast majority of the 1.8 million people still on furlough are in the very sectors most affected by the ongoing restrictions: hospitality, live events and travel. On 1 July, loans to those businesses start having to be repaid. The self-employed and those excluded from financial support will be worried about their futures. Grants are ending, business rate bills are arriving and furlough is tapering off—all immediately after the Government have announced an extension to restrictions. How on earth can the Treasury justify turning off support and sending businesses new tax bills when the Government are saying that those businesses cannot even open?

    On Monday, the Prime Minister told the country that we need to learn to live with the virus. Where is the much-needed plan that would enable us to do that? Where is the plan for greater ventilation in workplaces, including public buildings and schools? Where is the plan to shift contact tracing to a local level, where we know it works best—not in a centralised, Serco-led call centre? Where is the proper support for people needing to self-isolate? Those are all essential measures to save lives and livelihoods, and to avoid the stop-start approach that has characterised the Government’s response to the pandemic.

    Given the WhatsApp messages from the Prime Minister about his own Health Secretary that have been revealed today—Madam Deputy Speaker, I will use more diplomatic language than the Prime Minister could manage—how can we have confidence in Government Ministers when the Prime Minister thinks that the person in charge of the pandemic response is “hopeless”?

    Mr Toby Perkins (Chesterfield) (Lab)

    Not just “hopeless”.

    Rachel Reeves

    Not just “hopeless”. People have given up so much over the last year. We have pulled together and shown the best of our country. People have done everything that was asked of them and much, much more. We should not be in this position today. Businesses and workers do not deserve to have the rug pulled from under their feet at the eleventh hour. We want to see businesses make it through the pandemic and thrive again, because they are an important part of what makes our country so great and they are essential for our economic recovery. We need them and they need us today. That is why the economic support we have should match the health restrictions that are still in place, and that is what the Government have failed to deliver today.

  • Steve Barclay – 2021 Statement on the State of the Economy

    Steve Barclay – 2021 Statement on the State of the Economy

    The statement made by Steve Barclay, the Chief Secretary to the Treasury, on 16 June 2021.

    Before I make my statement, I add my appreciation to that of colleagues for Sir Roy Stone and the contribution he has made during his time in the House.

    There is little doubt that the four-week extension to restrictions announced on Monday will present additional challenges to thousands of people and businesses across the country. That is why at the Budget we went long and erred on the side of additional support. The package of support from my right hon. Friend the Chancellor was designed to accommodate short delays such as this. Indeed, he told the House at that time that we were

    “extending our support well beyond the end of the road map to accommodate even the most cautious view about the time that it might take to exit the restrictions.”—[Official Report, 3 March 2021; Vol. 690, c. 255.]

    Most of our economic support schemes do not end until September or after, providing crucial continuity and certainty for businesses and families—something that was welcomed by business leaders and sector leaders when it was announced. They praised the reassurance provided for the long term.

    Let me remind the House of the scale of support we have announced for British households and businesses over the past 15 months: £352 billion. We have protected jobs, with 11.5 million unique jobs supported by the furlough scheme, which will be in place until the end of September. At the Budget, we also extended the self-employment income support scheme, supporting nearly 3 million self-employed people and taking the total expected support offered through the scheme to nearly £3 billion.

    Businesses have been supported, too, with tax cuts, deferrals, loan schemes and cash grants worth over £100 billion. Our restart grants, worth up to £18,000 from April, have helped Britain’s businesses to get going, at a cost of £5 billion. Some £2.1 billion of discretionary grant funding has been provided for councils to help their local businesses. Last financial year, we provided an unprecedented 100% business rates holiday for all eligible businesses in the retail, hospitality and leisure centres—a tax cut worth £10 billion. This financial year, over 90% of these businesses will receive a 75% cut in their business rates bill across the year to March 2022, and we have extended the 5% reduced rate of VAT for a further six months. The loan guarantee schemes, including the bounce back loan scheme, have provided £70 billion of loans to 1.5 million companies.

    We have provided targeted sectoral support, too. At the Budget, for instance, we provided an additional £700 million to support local and national arts, culture and sports institutions as they reopen. That is on top of the £1.57 billion culture recovery fund, bringing our total support for sports and culture to more than £2 billion, with about £600 million yet to be distributed. It is businesses that will create jobs and grow the economy, and we have stood behind them since day one of this crisis.

    Just as we have supported jobs and businesses, so have we supported livelihoods too: the temporary £20 uplift to universal credit will continue until the end of September; we increased the national living wage to £8.91 from April and extended it to those over 23; we have increased the local housing allowance for housing benefit, meaning that more than 1.5 million households have benefited from an additional £600 a year, on average; and we provided a £670 million hardship fund to help more than 3 million people keep up with their council bills. This comprehensive package has helped to protect millions of jobs, businesses and livelihoods, and our plan is working. GDP is outperforming expectations: unemployment is forecast to be much lower than previously feared; consumer confidence has returned to pre-crisis levels; businesses insolvencies in 2020 were actually lower than in 2019; and signs in the labour market are encouraging, with 5.5 million fewer people on the furlough than in April 2020. In fact, figures released by Her Majesty’s Revenue and Customs just yesterday showed that the number of people employed has risen by more than 400,000 since November. Of course, covid has impacted different sectors in very different ways, and some particularly acutely, but it should be welcome news to everyone in this House that the early signs are of a recovery in our labour market.

    This plan has come at a cost, albeit one that has reduced economic scarring that would have been inflicted otherwise by covid. Last year saw the highest peacetime level of borrowing on record—£300 billion. We are forecast to borrow a further £234 billion this year and a further £107 billion next year, and at a higher level of debt the public finances are more vulnerable to changes in inflation and interest rates. Indeed, a sustained increase in inflation and interest rates of just 1% would increase debt interest level spending by more than £25 billion in 2025-26. As a result, at the next spending review, we will keep the public finances on a sustainable medium-term path, maintaining the trajectory established at the Budget, so that we have the resilience we need to respond to any future challenges.

    A huge and comprehensive economic shock has been met with a huge and comprehensive response—one that is working. I am pleased, however, to be able to make one further announcement today. Many businesses have accrued debts to landlords during the pandemic. Because of the threat that posed to jobs, we introduced protections to prevent the eviction of commercial tenants due to non-payment of rent. It is the Government’s firm position that landlords and their tenants should continue to resolve those debts through negotiations, and I welcome the various industry-led schemes already in place, and those being developed, to provide resolutions through arbitration. But in recognition of the importance of jobs in the many affected businesses at the heart of local communities, we launched a call for evidence in April on further actions to take to resolve those debts. As a result of that call for evidence, the Government now plan to introduce legislation to support the orderly resolution of these debts that have resulted from covid-19 business closures. We will introduce legislation in this parliamentary Session to establish a backstop so that where commercial negotiations between tenants and landlords are not successful, tenants and landlords go into binding arbitration. Until that legislation is on the statute book, existing measures will remain in place, including extending the current moratorium to protect commercial tenants from eviction to 25 March 2022.

    To be clear, all tenants should start to pay rent again in accordance with the terms of their lease, or as otherwise agreed with their landlord, as soon as restrictions are removed on their sector if they are not already doing so. We believe that that strikes the right balance between protecting landlords and supporting the businesses that are most in need. Based on the successful Australian approach, it sets out a long-term solution to the resolution of covid-19 rent, ensuring that many variable businesses can continue to operate and that debts accrued as a result of the pandemic are quickly resolved to mutual benefit. I thank those on both sides of the issue for their constructive engagement.

    Striking the right balance, just as we are doing with commercial rents, has been the key to our approach all along, and it will continue to shape our approach in the weeks ahead.

  • Ed Miliband – 2021 Comments on Economic Support for Businesses

    Ed Miliband – 2021 Comments on Economic Support for Businesses

    The comments made by Ed Miliband, the Shadow Business Secretary, on 10 June 2021.

    Businesses have operated under historic uncertainty during this crisis, worsened by details of economic support playing catch up with public health announcements.

    Now once again, businesses are in the dark, with a perfect storm of financial pinch points brewing and no reassurance from government that economic measures will remain in step with possible changes to the roadmap.

    It is right we remain guided by the science to tackle this virus, but businesses should absolutely not be paying the price for the Government’s poor handling of our borders and the new variant.

    We’ve got to back businesses on our high streets and safeguard the recovery of local economies. Businesses should not have to worry for even one day that economic support will be pulled away whilst restrictions remain in place.

  • Rachel Reeves – 2021 Comments on G7 Deal on Multinational Taxation

    Rachel Reeves – 2021 Comments on G7 Deal on Multinational Taxation

    The comments made by Rachel Reeves, the Shadow Chancellor of the Exchequer, on 5 June 2021.

    It’s encouraging to see these first moves towards a global pact on tax avoidance.

    But this government has spent the last few weeks actively watering down what was initially intended to be an ambitious 21% rate of global minimum corporate tax.

    That would have brought £131 million extra a week to Britain for our NHS and other public services, while also stopping our high streets being aggressively undercut.

    This government must now show leadership, push for a 21% rate in negotiations, and use the money to fund our schools and our NHS.