Will the Minister confirm the IMF figures that in 2020 to 2022—that important three-year period after we left the EU—the UK was the fastest growing economy of the G7? The Opposition’s forecast that the UK might be a poorer performer this year is just a forecast, and most forecasts are usually wrong.
As always, my right hon. Friend is on the money. The point is that forecasts predict many different things. I have been in the Treasury for nearly five years; forecasts for every fiscal event rarely prove to be true at the next fiscal event.
We must continue to focus on taking the right decisions, decision by decision, and prove those forecasters wrong. That means long-term, sustainable and healthy growth that pays for our NHS and schools, finds jobs for young people and provides a safety net for older people, all while making our country one of the most prosperous in the world. It also means reducing debt, which we are on track to do. In fact, because of the decisions we have taken and the improved outlook for the public finances, underlying debt in five years’ time is now forecast to be nearly three percentage points lower than back in the autumn. That means more money for our public services and a lower burden on future generations—deeply held Conservative values, which we put into practice today. It is these steps that will make our country and our people better off. We are also taking action to shelter the most vulnerable while we achieve these longer-term ambitions for the economy.
In the Budget, we announced that the energy price guarantee would remain at £2,500 per year until July 2023. That was funded in part by the energy profits levy that this Government introduced last year, recognising that profit levels in the sector had increased significantly due to very high oil and gas prices caused by global circumstances, including of course Russia’s invasion of Ukraine. The levy is expected to raise just under £26 billion between 2022-23 and 2027-28, on top of around £25 billion in tax receipts from the sector in the same period through the permanent tax regime. The energy price guarantee measure will save the average family a further £160 on top of the energy support measures already announced, bringing total Government support for energy bills to £1,500 for the typical household since October 2022.
It is worth recapping those measures. This Government have helped all domestic electricity customers with £400 off their energy bills through the energy bills support scheme. The energy bills support scheme alternative funding provides £400 to around 900,000 households that are not supplied by domestic electricity contracts and are unable to receive support automatically through the energy bills support scheme.
Our support has not stopped there. Alongside holding down energy bills, freezing fuel duty and increasing universal credit, we are giving up to £900 in cost of living payments to households on means-tested benefits. Starting from today, over 8 million families across the UK will receive the first £301 cost of living payment from the Government. That is the first of up to three payments for those on means-tested benefits, totalling £900 through 2023-24. Those entitled do not need to apply for the payment or do anything to receive it. The payments will be accompanied by a payment of £150 for people on eligible disability benefits this summer and a payment of £300 on top of winter fuel payments for pensioners at the end of 2023.
These are carefully designed interventions, targeted at the most vulnerable across communities in the United Kingdom. The latest payment follows on from the £650 cost of living payment delivered to households on means-tested benefits by the Government in 2022, with an additional £150 for individuals on disability benefits and £300 for pensioner households.
The Government of course need to recognise that some people will fall into difficulties. They have enabled local authorities to provide additional support with the cost of household essentials through a 12-month extension to the household support fund in England worth £1 billion, including Barnett funding. We are also ensuring that more than 10 million working-age families will see an increase in their benefit payments from April 2023, based on the September inflation figure of 10.1%.
While we shelter the most vulnerable, the public also rightly expect us to look further to the future, making sure we are taking steps to grow sustainably and securely in the long term. This Government are unashamedly pro-growth, because expanding the productive capacity of the economy is the only way to solve the productivity puzzle, which has dogged us for decades, and improve living standards for all.
One reason we are held back is because a great number of people have left the labour market altogether. As a Conservative, I believe there is virtue in work and getting people into work is the best way to avoid the ills and perils of poverty. There has been an increase of more than 1.5 million working households since 2010, which shows that we are on the side of working families. That includes our new game-changing childcare offer that will entitle working parents in England to 30 hours of free childcare per week, once their child is nine months old, and close the gap between parental leave ending and the current childcare offer.
In addition to making provision on free childcare, the Budget set out to remove barriers for the long-term sick and disabled, for jobseekers and for older people with our pension tax reforms. Part of the plan is welfare reform to support those who have been disengaged from the labour market. My right hon. Friend the Secretary of State for Work and Pensions has introduced a White Paper setting out reforms that will support more people who are long-term sick or disabled to try work without any fear of losing their benefits. Other policies that we announced at the Budget will then ensure that those individuals are better supported to stay and succeed in work. Overall, the Office for Budget Responsibility expects the spring Budget package to result in 110,000 more individuals in the labour market by the end of the forecast period.
The UK saw the fastest growth in the G7 over 2021 and 2022. Cumulative growth over the 2022 to 2024 period is predicted to be higher than that of Germany or Japan, and at a similar rate to that of France or the US. We have halved unemployment, cut inequality and reduced the number of workless households by 1 million. We have protected pensioners, those on low incomes and those with disabilities. We are continuing to lay the groundwork for a vibrant, innovative and growing economy that benefits communities and families up and down the country.
Having sat and listened to the shadow Minister—I was not smiling, but reflecting on what I heard—I think it is very unfortunate that the Labour party continues to play politics and snipe from the sidelines without a clear and coherent plan.
April 27, 2023
All good stuff from Mr Glen for the taxpayers to look forward to.
Not one word on addressing the horrendous waste that pours out from from every government sector and department on a very regular basis.
Government cannot expect to carry on like this as it is totally unsustainable.
April 27, 2023
@turboterrier
The stuff:
John Glen acknowledged the question, answering in his first and last paragraphs. The lengthy part in between resembles a scriptwriter’s template, lifted from a stock prepared weeks before and ‘pasted’ to fit when needed. The content ‘stuff’ was used many times previously although the phrasing changes.
Sometimes, such questions are primed, although unlikely in this case. The length of the answer gave the impression that the Govt was responding with strong substance. John Glen did skilfully use the top and tail smoothly, resulting in what many would agree to be a splendid answer to the question.
April 27, 2023
Yep one great big socialist boondoggle. The worst aspect is the Tories are proud of it.
April 27, 2023
If only the Mr Glen’s of this world would accept that if the lemming charge to the cliff edge of NZ was scaled back and concentrated on getting the country firing on all four cylinders (excuse the pun) like some other countries we might find ourselves in a much better place more quickly.
The people of this country must come first, not the ego’s and aspirations of the globalists, remainers and the STW religious cult.
April 27, 2023
1. Deliberately ramp up the cost of energy with the Eco lunacy
2. Load taxes and so-called green energy levies on households – and then graciously give households some back as a rebate
3. Kick off inflation with reckless money printing – and then tell people they must just accept they’re poorer
4. Deliberately increase taxes to the highest post-war burden; refuse to cut spending/the State
5. Tax families to destruction, so they can be given some back to pay for childcare – as long as it isn’t granny providing the care of course. It has to be a carer with a piece of paper to say the Government approves of him/her
Does any of that sound even remotely conservative to you?
April 27, 2023
Having knowingly and deliberately reduced the supply of energy, the Minister expects applause for ‘holding down energy bills’ – I had to stop reading there because of boiling blood.
April 27, 2023
There appears to be an error in John Glen’s answer. He claims:
“The energy bills support scheme alternative funding provides £400 to around 900,000 households that are not supplied by domestic electricity contracts and are unable to receive support automatically through the energy bills support scheme.”
Citizens Advice shows that the figure should be £200 NOT £400:
“If you use alternative fuels such as biomass or heating oil, the government will give you a £200 payment to help with your energy bills. This is called the ‘Alternative Fuel Payment’.”
Other sources confirm that the payment is £200 NOT £400, including the Govt’s own website:
https://www.gov.uk/apply-alternative-fuel-bill-support-if-not-automatic
If there is an error, the record should be amended to avoid people being misled. Even Hansard itself might record an error as if fact.
April 28, 2023
There are actually two payments. The one for £200 is for those who use oil or LPG for heating, and is paid against an invoice for fuel supply showing a bill for over £200 during the winter, recently extended back to last June to allow for those who filled their tanks in the summer. The one for £400 is for those whose electricity is supplied by their landlord. This is quite common for properties rented out on farms, where the supply is on a commercial contract, much as would apply to say a shop. These contracts have now become extremely expensive, as they are not protected by the OFGEM cap. Rates of over 50p/kWh are on top of a daily standing charge of over £1.50, so someone using an “average household” 3MWh a year will pay over £2,000 just for electricity: a heat pump would be ruinous. Rural households often rely on electricity for water heating and cooking which can add substantially to their consumption. The high standing charge arises from an OFGEM decision on the charging out of network costs, which has seen these charges treble in a year (roughly doubling in April). With wholesale electricity prices now around 10p/kWh, this segment of the market is being ripped off. The end of the winter scheme and the cancellation of most of the support for commercial customers puts these households in a vulnerable position. It is also leading to the closure of shops, pubs etc.
April 28, 2023
I thank you for your helpful clarification Mark, which you have explained very well.
April 27, 2023
‘Sustainable growth’ means ‘Net Zero Decline’.
April 27, 2023
If above inflation pay rises fuel further inflation, how is is sensible to give above inflation pay rises to minimum wage earners, benefits claimants and pensioners?
Benefits claimants are also receiving additional one off handouts. This can’t be good for the cost of living for the rest of us.
April 27, 2023
Sir John
You work hard to extract some meaning and direction from these people. However from were I sit most of what they are trying to address is self inflicted all at the taxpayers expense.
The energy situation is 2 fold, the refusal of this Conservative Government to nurture the UK’s resilience and self reliance from its own resources is at its core. Preferring to import, import, import. One small issue recently came up when a minister spoke of how the UK ‘will’ lead the World on renewable’s, which was a chronic suggestion when it is the Conservative Government that aided the closure of UK manufacture of components for windmills by reinforcing the buy foreign first approach.
The Conservative Government uses UK taxpayer money to finance foreign government owned facilities when a similar level of support to indigenous proven production would have yielded a similar more cost effective result.
Then the real elephant in the room is the new taxes and levies placed on energy use by the Conservative Government since they came to power, that have spiralled out of control, so much so the tax is now needed just to fund subsidies. The Dumb thinking by the Conservative Government over the last 13 years is that if you tax energy more less will be used. Yet the Country still needs to pay for itself, with its exploding population it has to earn even more. Businesses, people all need energy to create wealth. The correct thinking would be a viable cheap alternative first – the Conservative policy of imports is not the answer its the problem.
April 27, 2023
You normally get just two lines which in this case are “The UK saw the fastest growth in the G7 over 2021 and 2022. Cumulative growth over the 2022 to 2024 period is predicted to be higher than that of Germany or Japan, and at a similar rate to that of France or the US. ”
So what happened in Covid 2020 in comparison? Did you have some figures that you felt we weren’t at the bottom because of lockdown policies here?
April 27, 2023
John Glen, Chief Secretary to the Treasury: “We are continuing to lay the groundwork for a vibrant, innovative and growing economy that benefits communities and families up and down the country.”
Not true, in fact quite the reverse. Unilateral Net Zero is designed to further de-industrialise, curb growth and reduce our living standards with expensive and intermittent energy resulting in the rationing of energy, food, travel and goods. Hence the need for smart meters and behaviour change.
The excuse made is that we must net zero our 1% contribution of anthropogenic CO2 emissions, for no reason at all. CO2 is necessary for all life on earth and increasing its concentration in the atmosphere brings vastly increased plant growth and a negligible, if any, GHG warming effect as shown by the work of Happer & Wijngaarden. Published in 2019 these results have not been refuted by the IPCC, just ignored.
In fact, the increases in energy costs and cost of living increases ARE the plan to achieve unilateral net zero by 2050 (or 2040 now according to the UN).
April 27, 2023
That was an awful lot of waffle, that did not seem to address the point you were making in any discernible way.
April 27, 2023
“The levy is expected to raise just under £26 billion between 2022-23 and 2027-28, on top of around £25 billion in tax receipts from the sector in the same period through the permanent tax regime.”
The taxes on the energy sector raised £51 billion.
What is the total figure that the energy cap has cost us all?
April 27, 2023
Why are we paying four times as much for our electricity here than the people in Hungary?
April 27, 2023
Because the Hungarian people voted for Victor Orban, who believes his responsibility is to the Hungarian people.
We voted for Johnson, who morphed overnight from a Brexit-supporting Conservative into an Eco Nutter, and somehow ended up with Sunak and Hunt who no-one voted for and who work in the interests of the WEF, not the UK.
April 27, 2023
Its easy to reason from the responses from Ministers that the first problem is that the UK tax system is a mess. Entities are receiving taxpayer money with no Government control or possibility of them bothering to manage its outcome. Accountability and responsibility is missing.
Even the BoE gets to dump the cost of their own bad mistakes, lack of performance on the taxpayer, and its a shrug of the shoulder from Government as if to say that OK. Then at the same time the BoE mouthpieces hits the media saying everyone should expect to be poorer(that doesn’t include them personally of course). Then Sir John you get an explanation from a Minister saying, as we could interoperate it, due in part to failure in the BoE the Government has given £900 here a bit more there to these BoE ‘poorer families’. The BIG issue of course the Government has not given any one single bean – they have taken money from the taxpayer to cover up the blunders of their own making. The ‘Cost of Liviing’ crisis as some call it, is this Conservative Governments ineptitude.
One day people will wake up and ‘smell the coffee’ what is the purpose of government, what is the purpose of Parliament? On current performance why even have elections – get shot of the lot and let us all have a free for all. Every one being commanded to accept the very personal ego’s of a minority.
April 27, 2023
There is no evidence of that – government and service companies continue to rip us off at every opportunity.
All we see is the continued transfer of wealth from those that have little to those that have plenty already, along with over-excessive government waste.
April 27, 2023
I see the chief economist ( salary reputedly £180,000 pa ) tells us, we should all get used to being poorer.
I’ve always been a polite sort of fellow, so: Hew, after you.
Hew Pill could probably get by quite comfortably on only £100,000 per year. So, Hew, go on, set the example.
April 27, 2023
@johnredwood – “Retailers are right to push for the restoration of VAT free shopping for foreign visitors. This is yet another Treasury tax rise that is bad for business.“
I understand the thrust of your position (Tax Rises). On the retail front over the years UK tax has moved up from the 7.5% to 20%, along with all the other disproportionate rises, yet the service and delivery has declined?
Then again as Tax is a necessary evil, for one person to get it back it means another has to pay more.
Isn’t that the same situation with the cost of living rises, Government increases everyone’s costs, those cost have to be covered. Guess what you have inflation
April 27, 2023
@Ian B
While all round UK tax is extortionately high, the Government missed one that would have put UK first on the VAT free shopping. That lovely man (someone else’s words not mine) Joe Biden allows grants on EV’s, with a pro US kicker, those EV’s have to be manufactured in the US. Turn that around to UK VAT free shopping, how about handing the VAT back on UK manufactured goods. Good virtual signaling
That also highlights the real serious problem, as it stood the UK Taxpayer was subsidising Foreign Taxpayers to buy Foreign produced Goods. UK Retail predominantly sells imported goods.
April 27, 2023
We have heard all this before and the government is throwing our money about like a man with know arms.
We have a chancellor with a business acumen very close to ZERO. The removal of the VAT concession to visitors is a classic. It costs the Treasury peanuts but brings in visitors spending lots of money on accommodation, food and travel all incurring VAT. This a sector of our economy that needs all the help it can get.
For heavens sake put NET ZERO on the back-burner, secure our energy supply and bring the cost of living down and with it inflation. For good measure send ”out-to-lunch Bailey” into retirement and replace him with a top banker who understands how an economy should be run.
April 27, 2023
The only thing that we can take away from such a lengthy response is ‘The point is that forecasts predict many different things. I have been in the Treasury for nearly five years; forecasts for every fiscal event rarely prove to be true at the next fiscal event.’
Quite. What is almost certain is that every forecast will be wrong.
April 27, 2023
Have I got this right? Different groups on benefits get the additional help with their energy bills but a person working 2000 hours per annum at the minimum wage just gets the basic support. Is that going to help to get people back into work? In the recent budget, pensioners were generously treated by application of the triple lock and the Universal Credit benefits cap was raised by the full amount of inflation. Meanwhile, wage settlements are typically 6% or 7%. Is that going to get people back into work? Corporation tax has been raised, business rates have not been cut and the VAT registration threshold has not been raised, hitting SMEs hard. Is that going to get people back into work?
And have we got the right type of jobs? Are our myriad quangos, our non-exec directors, our top heavy NHS management, our overmanned and subsidised childcare system, our overmanned and unprofitable railway system, our overmanned and useless regulators the slightest use to man or beast. Is the OBR necessary or even useful? And are the Civil Service jobs generated by having 40 different support schemes that the Government boasts on TV productive, an alternative being to take people with income £20,000 pa or less out of income tax and NI altogether? As Mr Gladstone said “Let the money fructify in the pockets of the people”.
The Government’s WORDS are belied by their ACTIONS.
April 28, 2023
‘ In the recent budget, pensioners were generously treated by application of the triple lock’.
However that same Budget failed to lift the Personal Allowance to protect the ‘generosity’ from Income Tax which of course clawed 20% back for most pensioners.
April 28, 2023
“That means more money for our public services and a lower burden on future generations…”
Errr, no. Socialist waffle. It doesn’t have to be spent on public services; in fact, it doesn’t have to be spent at all.
And if there is truly to be a lower burden on future generations then government would actually need to avoid spending it. How does it help future generations if the government receives money and spends it? It has the opposite effect: it establishes a level of spending that future generations would be expected to maintain (if the current near-universal socialist dogma is allowed to persist in the national political debate by future generations).