Dame Harriett Baldwin
MP for West Worcestershire · Conservative · United Kingdom
“I welcome the Chancellor to his new role. I paid close attention yesterday to the long speech he made to reset the narrative and drive growth Britain. In paying tribute to his predecessor, will he recognise that she left the highest tax burden on record? Instead of postponing the words he could utter to my hon.”
“I welcome the new Prime Minister to the Dispatch Box. I note that in his statement he referred to the biggest issues facing the country as being “the economy and the cost of living crisis”. Will he accept that one of the things that has damaged our economy and caused prices to be higher is the tax-and-spend Budget in November 2024?”
“Could the Leader of the House make a commitment that the new Chancellor of the Exchequer will come to the House on the first day we are back from recess?”
“With a stroke of his Whitehall pen, the Secretary of State has just abolished Malvern Hills district council, Worcester city council, wonderful Wychavon district council and Worcestershire county council. He said in his statement that this is about making “real improvements to people’s lives and…communities”.”
“In recent weeks in West Worcestershire, I have met local police and the police and crime commissioner; the police and crime commissioner is being abolished, and the police are being reorganised. I have met the local health commissioners; they are being reorganised, and Healthwatch is being abolished.”
“Will the Leader of the House confirm that, given that the other place is sitting next week, there is nothing to stop him tabling a business statement to enable this House to sit next week? Given the enormity of the events happening in the Government next week, does he not think that would be a good idea?”
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“If we achieve that, it will give customers far more choice of whom to bank with and encourage banks to compete more effectively with one another. Competition will also continue to drive innovation in the delivery of banking services, such as contactless payment and payment by mobile phone. Atom bank, which recently received its banking licence, is a good example of innovation. It plans to be an online-only organisation and has ambitions to offer a range of innovative services to customers, which could include face-to-face contact through technology, as well as between individuals in the same location. One often suggested solution is the sharing of bank branches, which would allow banks to lower overheads and maintain local provision when they may otherwise have to close their branches.”
“I agree. My hon. Friend will be glad to know that 58% of people agree with both of us that face-to-face contact and having a local branch are important when choosing where to bank and engaging in major transactions. Some banking organisations take the view that they will gain market share by opening new branches. I have mentioned Metro bank, and TSB currently has 630 branches serving 4.5 million customers, which makes it the eighth-largest branch network with 6% of all UK branches. The Government are keen to encourage such healthy competition between different brands, some of which offer a face-to-face banking model. The Government’s ambition is for 15 new banks to enter the market over the life of this Parliament.”
“We are setting out to build a high-wage, low-tax, low-welfare economy: an economy in which work always pays and working more always pays more; an economy in which working households are supported through higher wages and lower taxes, not subsidised through a tax credits system that even Labour Members have described as simply not sustainable; an economy that gives 2.5 million people—those on the lowest pay today—a 10% direct pay rise and establishes a living wage that could, at this Parliament’s end, exceed £9 an hour.”
“This has been a lively debate on a summer Budget that puts the country’s security first—economic security, national security and financial security for the record numbers of people in this country who are now working, including the 2 million who have joined the workforce since 2010. It is a Budget that continues to carry Britain toward a secure, prosperous future by backing the aspirations of working people at every stage of their lives. For too long, we have been a low-wage, high-tax, high-welfare society—one that took money away from the poorest in taxes, then gave it back to them in the form of tax credits and welfare. In this Budget, we are changing that around.”
“It is why we will honour our commitments to uprate the state pension according to the triple lock; we will neither means-test nor tax disability benefits—in fact, all disability benefits are exempt from the four-year freeze of working-age benefits—and we will increase funding for domestic abuse victims and for women’s refuge centres. The second principle is to expect those who can work to look for work and to take work when it is offered, because work is the best route out of poverty. The third principle is to place the entire welfare system on an affordable and sustainable footing, fulfilling our commitment to run a budget surplus, because that is the best route to long-term economic security.”
“The IFS figures do not include, for example, the full impact of the increased offer of free childcare. According to the Treasury figures, eight out of 10 working households will be better off as a result of the changes, acting in combination, by 2017. As a country, we have 1% of the world’s population, we produce 4% of global GDP, and we are responsible for 7% of the world’s welfare payments. That is not right, it is not sustainable and it needs to be reformed. In introducing the reforms, we have set out four principles. The first is protecting the most vulnerable—that is fundamental.”
“Employers will also benefit from my right hon. Friend the Chancellor’s announcement of a reduction in the corporation tax rate to 18% over this Parliament. Several questions were asked about housing. I can reassure Opposition Members that there will be consultations on the housing changes, and a lot of exemptions in vulnerable cases. In the brief time available, I conclude by saying that this is a Budget for the working people of Britain. It is a Budget that supports Britain’s working households not through state subsidies, but through lower taxes and higher wages. Ordered, That the debate be now adjourned. —(Jackie Doyle- Price .) Debate to be resumed on Monday 13 July .”
“I want to emphasise that students from low-income households will not have to pay up front. Over the course of their lifetime, people who go to university will earn more—women who go to university will earn £250,000 more over their lifetime—and the cash they receive through their student loan will be more generous than it was before. The hon. Member for Fermanagh and South Tyrone (Tom Elliott) and other Members asked about support for businesses. I can confirm that we will increase by 50% the amount that businesses can receive through the employment allowance. That will enable the small businesses that are the backbone of our economy to take on four people paid the national living wage. Effectively, it will be kept at the same level: employers will pay no national insurance for four people working full time on the national living wage.”
“Labour Members carped on endlessly about the methodology, but none of them welcomed the fact that this represents a 10% pay rise for the lowest-paid 2.5 million working people in the UK. Several Members raised student finance, and representatives of university towns paid particularly close attention to such points. The former Labour Chief Whip, the right hon. Member for Newcastle upon Tyne East (Mr Brown), probably remembers that a Labour Government abolished maintenance grants completely back in 1998. He probably had to do some deals in 2004, when maintenance grants made their reappearance. He is chuckling in his place about his memories of that time, so I am sure he had to make many arguments about how wise the policy was when his Government implemented it.”
“I have yet to visit his part of Scotland, but it sounds absolutely wonderful. After he had taught us about the history of the highland clearances, I was sorry that he could not welcome with greater fervour the significant increase in wages for people working in his constituency, which currently enjoys the lowest unemployment in its history. A range of other issues were raised, and I will briefly go through some of the questions asked. Several Members made the point that the national living wage was different from the living wage calculated by other organisations. I can clarify that the methodology that has been followed is based on the work of Sir George Bain, who wrote the paper “More than a Minimum” for the Resolution Foundation.”
“Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr) spoke eloquently about the Scottish border country, which we all know is exceptionally beautiful. He speaks for his party on agriculture and rural issues. He succeeded the former Secretary of State for Scotland, the Liberal Democrat Michael Moore, and spoke eloquently about his lasting contribution in the form of the 0.7% commitment that he achieved through his private Member’s Bill. That was no mean feat, as I discovered early on in this place. The hon. Gentleman also received something you may have frowned on, Madam Deputy Speaker—a round of applause for his excellent delivery. I will say no more on that because he might get into trouble. We also heard from the hon. Member for Caithness, Sutherland and Easter Ross (Dr Monaghan).”
“The tough decisions we are taking now will lead us into a more prosperous and more secure future. We enjoyed five maiden speeches. My hon. Friend the Member for North Warwickshire (Craig Tracey) has a remarkable distinction that may be in the record books. He succeeded a colleague with a majority of 54 and took the majority up to nearly 3,000, which is a remarkable achievement. I enjoyed the maiden speeches of the hon. Members for Bradford South (Judith Cummins) and for St Helens South and Whiston (Marie Rimmer). I understand that there is already a bit of a rivalry between them—they support different rugby league teams—which will be followed closely during their time representing those areas in Parliament. We heard from Members from two beautiful areas of Scotland. The hon.”
“My hon. Friend makes an extremely good point. Even when we announce elements of policies they were campaigning on only weeks ago, Labour Members seem to be unable to bring themselves to welcome the measures. The Budget is not just about making changes to welfare; it is about ensuring that those who are in work do not face more difficult choices than those on benefits. Full-time benefits should never pay more than full-time work. Those are the principles underlying the welfare reforms. Over the next two years, eight out of 10 working households will have benefited from the measures announced in this Budget, such as our introduction of the national living wage. By 2020, a full-time worker on the national living wage should be earning over £5,200 more in cash terms.”
“The Government stand firmly on the side of people who want to work hard, save up, buy their own homes, and retire with dignity. We have increased allowances for individual savings accounts, introduced the Help to Buy scheme, pensioner bonds and pension freedoms, and taken 95% of people out of tax on their savings.”
“What a pleasure it is to welcome my hon. Friend to the Chamber. He is absolutely right: more people are employed than ever before, and mortgage rates are extremely low. As a result of our long-term economic plan, my hon. Friend’s constituents in Havant, and constituents elsewhere, can now aspire to own their own homes one day.”
“I congratulate my hon. Friend on the strong endorsement he received from the voters of Milton Keynes to return here and express their interests. I am very pleased to hear Help to Buy is so popular in Milton Keynes. The town tops the charts for the attractiveness of buying versus renting. Shared ownership is indeed an excellent way to help people take their first steps on the property ladder, and the Government remain committed to it.”
“My hon. Friend the Member for Milton Keynes South (Iain Stewart) topped the chart in Milton Keynes personally as well, but the hon. Lady raises an important question: London house prices are a key issue for her constituents. That is why the Government have brought in so much support to increase the number of affordable homes. The number of social homes and affordable homes increased by over 200,000 in the last Parliament. We are committed to continuing that great work and to bringing in the concept of starter homes, which we hope will add further to housing supply.”
“I am sure the hon. Gentleman—who kindly welcomes me to my place—will welcome the fact that more social housing was built in the last Parliament than in the entire 13 years of the last Labour Government. He rightly raises a point about housing associations: we must allow more supply of housing association properties. That is why this Government will bring in the right to buy for housing association tenants, which will enable more capital to come into that sector and more housing association properties to be built.”
“The Government are taking a range of steps to promote home ownership, including helping almost 100,000 households through the Help to Buy scheme. The Government have extended the Help to Buy equity loan to 2020, introduced a Help to Buy ISA and extended the right to buy, and we are delivering 200,000 new starter homes.”
“I can give my right hon. Friend the assurance that the Government want people who work hard and want to buy their own home to enjoy the security of owning their own home. The equity loan scheme will last until 2020, which should support another 120,000 households in Basingstoke and elsewhere to get on to, and up, the housing ladder. In addition, as my right hon. Friend the Chancellor announced in his recent Budget, the Help to Buy ISA is expected to help over 1 million first-time buyers save for a deposit.”
“I welcome the hon. Gentleman to the House. This Government are firmly on the side of those people who want the right to buy their own properties, and that includes extending the right to buy to housing association properties. Perhaps he will agree with the right hon. Member for Birkenhead (Frank Field), who published a report with the Institute for Public Policy Research in recent years calling on his party to do exactly the same thing.”
“I welcome my hon. Friend to the Chamber. He clearly brings a wealth of experience in this area, and he is right to highlight the fact that people who rent out a room can receive the first £4,250 tax-free. I note the point that he has made. My right hon. Friend the Chancellor of the Exchequer is sitting beside me and he will no doubt take that as a Budget submission and consider it as part of that process.”
“The right hon. Lady is right to highlight that point. It is important to recognise that although the first £4,250 of rent is covered by the allowance, once it goes above that level it becomes taxable income. HMRC is constantly looking at ways in which it can improve the collection rate in that area.”
“This Government have a long-term plan to make the UK economy the most prosperous of all the world’s major economies in the coming generation and for that prosperity to be shared widely across our one nation. The steps we are announcing today are a key part of achieving a new settlement for our public finances and for our financial services industry, and they will help us secure that bright future for all. I commend this statement to the House.”
“The review is centred on four principles: first, individuals must be held to account for their own conduct; secondly, firms must take greater collective responsibility for market practices; thirdly, regulators should close gaps in regulatory coverage and broaden the regime holding senior management to account; and fourthly, given the global nature of these markets, co-ordinated international action should be taken wherever possible to improve fairness and effectiveness. As the Chancellor set out in his Mansion House speech last night, there is no trade-off between high standards of conduct and competitiveness. Implementing the reforms set out in the review will ensure trust in our markets and strengthen London’s global leadership position.”
“The Chancellor also announced last night that the Government intend to gift up to 1% of the shares of the company to Royal Mail’s UK employees, in recognition of their work in turning Royal Mail around. Finally, the fair and effective markets review yesterday published its final report. The report sets out 21 recommendations to help to restore trust in the wholesale fixed-income, currency and commodity markets. The review was established by the Chancellor of the Exchequer and the Governor of the Bank of England in June 2014 to help to restore trust in those markets in the wake of a number of recent high-profile abuses.”
“With such a complex investment case, we have to start with institutions, but, as the Chancellor said, there is no reason why ordinary investors—in other words, members of the public—should not take part in due course. I now turn to Royal Mail. As the Chancellor set out last night, the first sale of our remaining stake in Royal Mail has begun. The Government have today sold half of the 30% stake they retained in Royal Mail plc at a price of 500p per share. This sale has raised £750 million, and that money can be used to reduce public debt. We have said that we will dispose of all our shares in Royal Mail in this Parliament. We will continue to review the options in the light of our stated sale objectives, but there is no rigid timetable. Value for the taxpayer remains the priority.”
“This independent report confirms that taking into account all the sales we have authorised of our bank assets, and the fees we have received, at the current valuations taxpayers can expect to make £14 billion more than they paid out. In the coming months we will therefore begin to sell our stake in RBS. It is the right thing to do for British businesses, British taxpayers and the British economy. Taking all the bank interventions in total—Lloyds, Northern Rock, and the scheme fees—we are making sure that taxpayers get back billions of pounds more than they were forced to put in. Of course, given the size of our stake in RBS, the sales will take some years and are likely to involve all types of investors.”
“In the Governor’s words, “it is in the public interest for the government to begin now to return RBS to private ownership.” He goes on to say that this “would promote financial stability, a more competitive banking sector, and the interests of the wider economy.” Indeed, he adds that “there could be considerable net costs to taxpayers of further delaying the start of a sale.” That is also the conclusion of the independent review that we commissioned from Rothschild and that was published last night. It says that beginning sales now, and increasing the free float, will improve the marketability of our remaining stake, and it means that we can expect to see larger sales on better terms in the future—but only if we start now.”
“This Government were not responsible for the bail-out of the Royal Bank of Scotland or the price paid then for shares bought by the taxpayer, but we are responsible for getting the best deal now for the taxpayer and doing whatever we can to support the British economy. As the Chancellor set out, there is no doubt that starting to sell the Government’s stake in RBS is the right thing to do on both counts. That is not just our judgment—it is the judgment of the Governor of the Bank of England, whose views the Chancellor sought and whose letter on this issue we published last night.”
“With permission, Mr Speaker, I would like to make a statement regarding the Chancellor’s speech at Mansion House last night. First, I turn to the Royal Bank of Scotland. The £45 billion that the previous Government paid for the Royal Bank of Scotland represents the largest single bank bail-out in the world. The bank employs over 60,000 people in Britain and provides over a quarter of all small business lending in Britain. Its problems and its slow recovery have been one of the biggest drags on our economy, as many smaller firms know all too painfully. The restructuring of the Royal Bank of Scotland and the work that Ross McEwan and his team have done since have brought us to a decision point.”
“I do not know whether he is Mystic Meg, but I do not know exactly at what price the sales will be made. The hon. Gentleman will have seen the Rothschild report that we have published today. Under his Government, it was forecast in 2009 that the bank interventions would result in a total loss of between £20 billion and £50 billion. We have turned the economy and the banking sector around, and as of this week the Rothschild report estimates that the overall sum total of the interventions will benefit the taxpayer by £14 billion.”
“789.] Clearly, that reflection does not include apologising for the lax regulation of our banking sector or realising that the British people do not want a Government who are committed to borrowing more, spending more and nationalising more. Above all, the hon. Gentleman’s reflection clearly does not include recognising that his mentors, Gordon Brown and Ed Balls, paid a high price for their intervention in the Royal Bank of Scotland. I will take no lectures on economic competence from an Opposition party that in office sold off the country’s gold reserves at an all-time low, crashed the banking system and the economy, and left us with the biggest peacetime deficit in our nation’s history. I will answer the hon. Gentleman’s questions. He asked whether the Government will publish a break-even share price for RBS.”
“Clearly, the Chancellor is not dodging any difficult questions because I did not hear any difficult questions from the hon. Gentleman. It is a bit rich that the new shadow Chancellor has chosen to make his first attack on the Government’s economic policy by drawing attention to his party’s woeful track record on bank regulation and by publicly disagreeing with the advice of the Governor of the Bank of England. Last week the hon. Gentleman told this Chamber: “I have had plenty of time to reflect on the result of the general election. Obviously, we are disappointed with it and we will review our policies accordingly”. —[ Official Report , 4 June 2015; Vol. 596, c.”
“I congratulate my right hon. Friend on his unopposed re-election as Chair of the Treasury Committee. That he asks a question about the footnote illustrates his forensic reading of the published materials. As he knows, at the end of 2009 the estimate was that the cost of bank interventions would range between a £20 billion loss and a £50 billion loss. As of last week, the Rothschild report estimates that that situation has completely turned around, and that the overall recovery from the bank interventions is in the order of a £14 billion magnitude. The overall cost of funding on our Treasury issuance is at record lows thanks to the prudent economic management of my right hon. Friend the Chancellor.”
“I welcome the new hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin). What a refreshing change it is. The hon. Gentleman asks about Royal Bank of Scotland in particular. I gently point out that if the Scottish National party had won the independence referendum, there would be no ability to intervene in the banking sector in the way that the UK Government intervened. The role that Royal Bank of Scotland plays as the most significant lender in the SME sector is critical. It has not been able to play its full part because of public ownership. The Bank of England letter states that a phased return of RBS to private ownership would promote financial stability and lead to a more competitive banking sector, in the interests of the wider economy.”
“My right hon. Friend is absolutely right, and I thank him for his kind words of welcome. He is correct to say that we are not doing this purely for price reasons. It is important to take into account the wider economic impact. That is why I am grateful to the Governor of the Bank of England for highlighting the ways in which a banking sector free of public ownership will allow more capital, more restructuring and more competitive characteristics in our economy.”
“I thank the right hon. Gentleman for his kind words. As the Chancellor made clear in his Mansion House speech last night, he was responsible for the decision point yesterday and for articulating a future path away from the situation he inherited. The right hon. Gentleman will remember that the Treasury predictions at the time of the interventions were that they would cost the taxpayer between £20 billion and £50 billion overall. The situation has moved on and the economy has recovered substantially from the largest recession in our peacetime history. It is time to put the banking sector into a new settlement, and to have a new settlement for our financial services.”
“I welcome my hon. Friend to the House and congratulate her on an excellent question. The tripartite arrangements for bank regulation put in place by the former Member for Kirkcaldy and Cowdenbeath let the country down. The work of the last Parliament was to reframe our financial services regulation, so that the Bank of England could take responsibility, and so that we have a single point of regulation for the financial sector overall, supplemented by the important work of the Financial Conduct Authority on behaviour, and by the Prudential Regulation Authority. It is incredibly important that we have moved on from the tripartite arrangement. We do not want another situation in which the British taxpayer has to bail out a bank.”
“What can I say? It is extraordinary. I do not suppose we heard that kind of rant when the former Member for Kirkcaldy and Cowdenbeath was intervening in the banking sector. Perhaps the hon. Gentleman has not noticed that, in the single vote on legislation on Second Reading we have had in this Parliament, the Government won by a majority of 491. [ Interruption. ]”
“I thank my hon. Friend and constituency neighbour for his question, which shows his depth of knowledge. He is right. In my years of managing portfolios, what I paid for investments in the first place was a fact, but managers also have to factor in the future. None of us has a crystal ball. My hon. Friend’s words are wisely taken.”
“I thank the hon. Lady, who has great knowledge of these matters, for her question. Any estimate—and the one in the Rothschild report is no different—will be based on the current market conditions. The number that the report cites is, I think, as at 5 June. I note that the share price of RBS has performed well today; there will be different prices in the years to come. The Government have made it very clear that this will not be a quick process; it will take time. We can only project as at today’s prices the £7 billion figure, but it may or may not be a bigger number in the future.”
“I welcome my hon. Friend to his place. I know he has a great deal of experience in these matters. He is absolutely right that this is a key part of the long-term economic plan. We cannot have a healthy economic recovery without a healthy financial sector. I do not think that anyone in this place would argue that we can have a healthy banking sector when a large chunk of it, as my right hon. Friend the Chancellor has said, is in taxpayers’ hands.”
“The right hon. Gentleman asks a good question. I am sure the relevant Committees will take a close interest in this matter, because it is obviously a very large public investment. In terms of the liability side of the equation, he will be aware that there are a number of different pending regulatory matters that affect RBS. He will also be aware, as I think it says in the Rothschild report, that the market is aware of these things and will factor them into the price of the shares.”
“I thank my hon. Friend for a very good point, very well made. It is absolutely the case that we are responsible for ensuring that, as we go forward from this decision point, we get the best possible value irrespective of what the previous Government paid, which was, in retrospect, too high.”
“I really will not take any lectures on letting the country down in terms of economic management. The people who suffer the most when the banks fail, the regulatory system fails and the economy fails are the very poorest in our society. It is outrageous for the hon. Gentleman to suggest that the economic recovery, the clear turnaround in this portfolio of legacy assets and clearing up the mess that his party left behind is anything other than progress.”
“I welcome my hon. Friend to her place. I agree with her. She points out an important passage in the letter from the Governor of the Bank of England. He believes, for all sorts of reasons from where he sits as our overarching economic regulator, that it is important that we come to this decision point and staging post. I also emphasise that this process will take some time. It is not something that will happen today, tomorrow or the next day. The process of clearing up the mess left behind by the previous Government is a lengthy one.”
“I think my right hon. Friend was delighted to be invited back to the Mansion House to make a speech again this year. The question the hon. Lady asks about locally owned banks indicates that she favours a system of public ownership of our banking sector which, overall, the Government disagree with.”
“I welcome my hon. Friend to his place, and also welcome his wealth of experience and knowledge in this matter, which he ably demonstrates in his question. The sale will bring wider benefits to the overall economy. It will help us to continue to make progress in making the banking sector more competitive, and may result in a more competitive financial services sector and mortgage sector. That position is echoed not only in the Rothschild report, but in the Governor of the Bank of England’s letter.”
“The hon. Gentleman is absolutely right that the table is a snapshot of a moment in time. As time progresses, we will no doubt be able to pin down exactly the overall costs of clearing up the mess that Labour left behind.”