Response to interpellation 2023/24:462 on the banks' profits and the households' economic situation
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the banks' profits and the households' economic situation. M argues that the government takes over-indebtedness and price increases seriously by phasing out interest deductions on consumption loans, strengthening consumer protection, and giving authorities a mandate to counter over-indebtedness 1. M emphasizes that the government has taken measures such as electricity support, lowered energy tax, increased housing allowance, and tax cuts for pensioners and low-income earners 1. M claims that they prioritize long-term good policy over short-term populism 2. S considers that they have presented concrete proposals to help hard-working people with rising food prices and bills 3 4. S argues that their proposal for a temporary bank tax would not involve shifting costs to bank customers 4. S considers it upsetting that single parents have to borrow money for food and that indebtedness has increased 5. M argues that the government's efforts are well-balanced and that they support households through increased housing allowances and lowered taxes 6 7. M considers that S's new bank tax will likely spill over onto mortgage customers 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Niklas Wykman (M)
Mr. Speaker! Patrik Björck has asked the Minister for Finance what measures she and the government intend to take so that households will receive the support they need now that household debts are increasing. He also wonders whether the Minister for Finance and the government have plans to return with active measures to push down food prices and housing costs.
The interpellation has been handed over to me.
The government takes questions about over-indebtedness and price increases seriously. In order to counter over-indebtedness, the government recently referred a proposal which means that interest deductions on loans without collateral, for example various forms of consumer loans, are phased out. The government also continues to monitor the developments in the consumer credit market and work to ensure a high level of consumer protection. In the autumn, a new consumer credit directive was adopted, which, among other things, aims to strengthen the consumer's position in the consumer credit market and counter over-indebtedness.
The Government Offices are currently preparing proposals that the Over-indebtedness Inquiry has submitted in a report, which aim to reduce over-indebtedness among individuals. The Enforcement Authority has been tasked with directing preventive measures toward extra-vulnerable groups to reduce the risk of over-indebtedness and increase the opportunities for persons who have been denied an application for debt restructuring to rectify their financial situation. In addition, the Consumer Agency has been tasked with carrying out measures to strengthen the support for municipal budget and debt counseling.
The government has taken several measures to support economically vulnerable households that are being pressured by the price increases. Electricity support and reduced energy tax on gasoline and diesel have been significant measures. The temporary supplementary grant to families with children receiving housing allowance has been increased and extended. We are lowering the tax for pensioners and for households with low and normal incomes.
The government has tightened the monitoring of price formation in the Swedish economy in order to safeguard effective competition. Konkurrensverket has been allocated funds for this increased supervision. Last spring, Konkurrensverket and Konjunkturinstitutet were also tasked with analyzing the competition situation and price developments within the grocery trade and other industries where lack of competition may be considered a cause of increased prices.
Housing costs are affected by the fact that the banking market in Sweden is concentrated and dominated by a few large banks. One explanation for the large banks' dominance is that customers are reluctant to change banks, which, among others, the Competition Authority has pointed out. Against that background, the government has tasked the Financial Supervisory Authority to review how consumers' position in the banking market can be strengthened.
In addition to this, I can mention that the government has also given the Finansinspektionen the collective business law supervision responsibility over consumer credit institutions. This means a unified supervision over credit assessments made by lenders, credit institutions, mortgage credit institutions, and consumer credit institutions.
Patrik Björck (S)
Mr. Speaker! As I said, I submitted my interpellation to the Minister for Finance. Niklas Wykman is a competent and capable person whom I am happy to debate with, but I would have obviously preferred to debate with the minister whom I believe the interpellation hits more accurately. But it is what it is, and I have received the answer I have received.
The background to my interpellation is that when I travel around and meet companies, employees, organizations, municipalities, and regions, I can observe that these are tough times. The Swedish people are being hit hard, and many are facing rising housing costs and high food prices. One could, of course, point to this as a law of nature, like El Niño or something that affects everyone equally, but that is not quite the case. Despite the economic cycle and various external circumstances affecting the economy, this does not hit all countries equally; instead, the increase in, for example, food prices is occurring faster in Sweden than in comparable countries, where the governments have likely had a different policy and managed inflation in a different way.
The Social Democrats had in their budget a number of proposals to support people in a difficult situation. When one supports individuals, one also supports the entire economy, demand, and the companies, and can dampen a vicious spiral. When the government signals that it wants to worsen the unemployment insurance, it is a clear sign of how one politically reinforces a bad spiral by worsening people's private finances in difficult times. Here, therefore, there are not only higher powers to point to, but it is also the government's lack of policy that affects individuals' situations. It would have been interesting to hear answers to this from the Finance Minister.
Mr. Speaker! If I were to go out onto the streets and squares with the answer I have received from the Minister for Finance, people would probably not feel safe or feel that it corresponded to their economic situation. It is well and good to manage over-indebtedness and achieve a better competitive situation within the banking sector; I have no problem with that. But it does not help people here and now to pay their bills, and it does not help against the bankruptcies we see or against the increasing unemployment.
At the same time as other sectors have problems, the banking sector is doing exceptionally well on the stock market. It is making record profits and record dividends, and the bank managements are receiving record bonuses. But those who are responsible for this, that is to say ordinary, hard-working people, receive no support from the government.
Eva Lindh (S)
Mr. Speaker! I would like to thank Patrik Björck for this important interpellation. These are truly crucial issues for very many people all around Sweden. I also thank the Minister for being here and taking this debate.
Many Swedes are being hit very hard right now - not all, because inequality is increasing, but many Swedes are being hit very hard. We know that over 40 percent of single parents must borrow to buy the most basic things, that is, food, and pay for housing. It is not reasonable and not worthy of a country like Sweden for it to be this way.
The debts have, just as Patrik Björck writes in his interpellation, increased dramatically. They have increased by 17 percent compared to the previous year-end. The number of people in debt has increased across the entire country and in all age groups; it is 23,467 more people than a year ago. It is therefore 23,467 more who are affected by this here and now but who will, of course, have to deal with this for a long time to come.
For several years of my working life, I have worked with people who have large debts. It does not only affect the economy, it affects the whole life. I can see what is hidden behind all the numbers, all the people who actually exist behind them.
Niklas Wykman says in his response that a great deal is being done and that the government has made efforts. But against the background of what we see here and now, that people have to borrow for food and that more and more people have to go into debt, the question is whether Niklas Wykman thinks this is sufficient and that the government has done what it could to support the households that are now affected by the economy we have in Sweden with an economic crisis.
At the same time, we know, as said, that it does not affect everyone. Patrik Björck highlights a sector that really has not gone into the red, namely the big banks. The big banks have earned 230 billion kronor during 2023 on increased interest rates. These are enormous sums for these increased mortgage rates that people are now struggling with. It is actually on those interest rates that the big banks have made these large profits.
We Social Democrats propose that a bank tax should be introduced and a part of the excess profits—not all of the excess profits, but a part of the excess profits—so that the money that the big banks have earned from their bank customers shall be returned to those who truly need support now.
I think it is really worth it. The Minister has mentioned a number of things that need to be done to increase competition between the banks. We stand behind that; it is clear that we need to do it, but that is in the longer term. What we are talking about here and now is the severe economic vulnerability that many have right now. What does the Minister want to do about this?
Statsrådet Niklas Wykman (M)
Mr. Speaker! First, one can establish how important competition is, of course, to drive down prices. Member of Parliament Eva Lindh can certainly return to the rostrum and tell us whether there were more or fewer large banks competing in Sweden during the time that Eva Lindh and the Social Democrats were responsible. How did it go with that issue? Did there become more or fewer Swedish big banks during that period? It might be worth considering before one wants to introduce new taxes and so on in general.
Mr. Speaker! I am glad that Patrik Björck does not like my answer. It is very good for the Swedish people. Things did not go well for Sweden during the period when Patrik Björck and the Social Democrats were responsible for the country. That is why the Swedish people voted out Patrik Björck and the social democratic policy, Mr. Speaker. It was the very core of what happened in the election when the Swedish people said that Sweden needs a new political direction, that we need to tackle crime, that we again need to get a job creation and a job machinery started that is based on curiosity, innovation, and entrepreneurship. It was a long series of areas where Magdalena Andersson and the then government distinguished themselves by being bad and worse than many comparable countries. I am therefore glad that Patrik Björck does not agree with my interpellation answer.
Furthermore, Patrik Björck says that this would not become popular in the streets and squares. The Minister for Finance's answer would not make the crowds cheer.
Mr. Speaker! I believe that Patrik Björck is right. I have, in fact, committed myself to not engaging in populism and public pleasing, but instead to doing what is long-term good for people who go to work, for people who have gone to work throughout their entire lives, those who hear the alarm clocks ring, who go to bed tired and then do the same the next day. It is not about winning the short-term points or the quickly concluded applause, but about doing what is right and good for Sweden.
I am describing a number of different assignments we have given to authorities just to make Sweden better - a number of political reforms to make it better for pensioners and people who work, to make Sweden a country where those who live here have it well and are safe.
For my part, it is not about winning short-term popularity. It is about doing what is in the long-term interest of the working people, the pensioners, and the Swedish welfare society. There is too much short-sightedness and populism in politics.
It has been a priority for the government to pursue a policy that makes it possible for the central bank to win back price stability in the economy. Within that framework, it has been central to support households that have faced tougher conditions. It has been about reinforcements in the housing allowance for those who have the smallest economic margins. It has been about lowering the tax on wage labor, not least on low and medium incomes, to maintain the purchasing power for those who go to work. It has been about significant tax cuts for retirees so that it will be a bit easier to meet the price increases in the shops.
I have not noted any other overall direction from the Social Democrats either. If one wants to describe it as having a massive spending policy that fuels inflation and gives everything to everyone, then I will take that debate any day. I will always stand firm on a responsible economic policy that looks out for the people who work and who have worked. They should have a secure country to live in.
Patrik Björck (S)
Mr. Speaker! I can give Niklas Wykman a reassuring message. Niklas Wykman does not want to win any popularity contest, he says. I can tell Niklas Wykman that he has not either. The Government and Niklas Wykman and Prime Minister Ulf Kristersson have lost the popularity contest. Support for the government's policy is low. Support for the Prime Minister is non-existent.
It is precisely because people feel in their bones how this right-wing policy, of which Niklas Wykman is a proud representative, hits ordinary people while the champagne flows around Stureplan when the bank directors' bonuses are to be turned into consumption. Then people sit with bills that they cannot make ends meet - these hard-working people who go to work every day.
Niklas Wykman cannot pursue a policy that helps ordinary people today, and in that case, one does not win the people's support either. What Niklas Wykman somewhat contemptuously calls populism, that is to say a policy that helps ordinary people, hard-working people, in everyday life, I do not call populism. I call it realism.
If you have a policy that ensures hard-working people can pay their bills and put food on the table, you do not only strengthen the individual but the entire society.
When we Social Democrats saw how the banks, as they do today, took an unreasonably large share of the economy and put it in their own pockets, we presented a proposal on how we could bring in these funds through a bank tax and ensure that they are distributed to ordinary people. This can be done, for example, through a tax cut that hits ordinary people, through extra payments of child allowance, through increased maintenance support, and through a fuel discount that gives money to the person who needs to fuel the car instead of money into the oil companies' pockets.
This type of very concrete proposal, which would provide people with support here and now, today, and which would let the banks take their share of the responsibility here and now, today, we have placed on the table of the Riksdag, but they have been voted down by Niklas Wykman's party and its coalition partners.
That is why I have, Mr. Speaker, in all humility asked the Minister for Finance whether, if one did not think our proposals were good, what other proposals one has to, here and now, today, redistribute the money back to the hard-working people who are facing bills and rising food prices. On this, Mr. Speaker, the Minister for Finance and, for that matter, Niklas Wykman has no answer.
Answering these questions is not populism, but it is taking hard-working people seriously. When one does this, one supports the entire society and the entire economy of the society, and then one can put a stop to the process we have today where bad political decisions lead to individual people getting it worse, to the economy of the society getting it worse, and to the companies getting it worse.
Eva Lindh (S)
Mr. Speaker! The last time the Minister and I debated these issues - the banks' excess profits and the situation for households - the Minister, according to emails I have received, posed 48 questions to me, but he did not answer as many of my questions.
I have received a question, but the Minister has still not answered the questions that I have asked. So I thought, like, the Minister, not answer that one, but I shall try to get answers to my questions.
The Minister seems very proud of the new political direction. Well, that is good – a minister should of course be. But I am not so satisfied. We have an economic crisis, we have a healthcare crisis, we have a housing crisis, we have some of the lowest growth rates in Europe, and we have a crisis for many households who are having a very tough time today – that is what we are talking about.
I still wonder if the Minister is satisfied with the measures that have been taken, given that single parents who work hard still have to borrow money to be able to put food on the table for their children. The Minister sees that the debt has increased by 17 percent - isn't that still a sign that many out there are struggling?
This is what I care about. This is what we Social Democrats find outrageous and unworthy of this country. Things must be done. Therefore, we have proposals for measures and a way to finance them, and it does not fuel inflation. This has also been said by the government's closest head, the Minister for Finance. We have a responsible budget.
Statsrådet Niklas Wykman (M)
Mr. Speaker! The answer to the question of whether the measures are correctly and properly weighed and whether I am satisfied with them is yes. It is not the same as being satisfied with how society is or how the situation in the economy is. It is deeply concerning, beyond political rhetoric. Sweden was not well-managed for many years. What happened with the energy policy in Sweden, for example, has created deep problems in Swedish society.
The developments we are seeing in the world with geopolitical tensions and war, the return of inflation in the economy and the price increases one encounters when going to the store to shop - there is much that we should not be satisfied with. Much of this we could have done differently here at home with a better government and a better policy when it happened.
There are things that have come from the outside and in as a problem for Swedish society to handle, for example the wars in the world, but one can think clearly about the fact that we also take the right measures in a concerning situation and do not play it away in various rhetorical flourishes.
Eva Lindh is responsible for whether there were more or fewer large Swedish banks competing during the time the Social Democrats governed the country. It is central to ask this question and answer it before deciding on new types of taxation of this sector.
The high bank profits, Patrik Björck, obviously stand out and raise many questions. How does Patrik Björck view the management of excess liquidity? How does Patrik Björck view QE and the subsequent consequences of it? How does he view the sums held at the Riksbank and at banks and the interest income they provide in relation to how it was before? The Riksbank is an authority that is under the Riksdag, and these questions should be commented on by Patrik Björck in this case, not by me.
It is clear that this will lead to much international research and evaluation processes regarding how this entire handling has proceeded. These questions naturally deserve an answer, and if Patrik Björck has any preliminary statements on how he views this, they can of course be submitted.
Competition needs to be strengthened. That is my message. It is the government's message. We do this by proposing things such as how one can do with fixed-rate mortgages, if one, for example, wants to settle them. There has been an investigation that looked at this, and the matter is currently being prepared in the Ministry of Justice.
I have spoken clearly and early about the amortization bases, for example that they should be digital, and I have seen that Finansinspektionen has also acted in this matter so that we can get better competition and more mobility in the banking market.
When the Social Democrats presented their new bank tax, the question is whether consideration was taken of what happened in the banking market when the old one was introduced. Have they spoken with their municipal council colleagues around the country about how they view Kommuninvest's ability to now finance its operations, for example, the welfare financing? How do they view Kommuninvest's very serious views on the already existing bank tax, for example, and thus the possibility of financing welfare investments in different ways?
At the press conference that the Socialdemokrater had, it was admitted that the tax they are proposing will likely spill over onto mortgage customers. Is it now seen as right to introduce a tax of 2,000, 3,000 or 4,000 kronor per year for already strained mortgage customers? For the government, this is not a well-considered policy.
Patrik Björck (S)
Mr. Speaker! We can certainly have a debate about the Riksbank's position, monetary policy, fiscal policy, and other important issues, but now it was not about that, but about the fact that we Social Democrats have placed concrete proposals on the Riksdag's table that would help the finances of hard-working people here and now, today.
Since the government dismisses our proposals and our funding of these proposals, I pose a highly reasonable question to the Minister for Finance: What other proposals are there?
We can discuss the Riksbank, and we can of course discuss that with the third. But it is no answer to the question. Unfortunately for all the people listening to this debate, it is a mist, Mr. Speaker, that Niklas Wykman is busy spreading out over the chamber. I do not think that means that Niklas Wykman, so to speak, is rising in popularity. Now, it doesn't concern Niklas Wykman whether he is popular or not. But to be so nonchalant regarding the worries of ordinary people, as Niklas Wykman is here today in his answers, is not honorable.
We have a housing crisis, we have a cost-of-living crisis, and we have food prices rising more in Sweden than in the rest of the world. Our proposal for a temporary bank tax would not have involved any shift of costs to the bank customers—on the contrary. This proposal was designed so that it would have very precisely and accurately given bank customers either lower interest rates or money back via politics. If that was not a good proposal, what other proposal that hits people's wallets today can Niklas Wykman come up with?
Statsrådet Niklas Wykman (M)
Mr. Speaker! The Government has to deal with a situation where we have had and still have too high inflation. Inflation is the worst enemy of wage earners, pensioners, but also of the growing economy. It is something that needs to be addressed.
We support households through an extension of the increase in housing allowances to the economically most vulnerable. We have lowered the tax on work to provide support to households. We have lowered the tax for pensioners, so that they find it a little easier to meet the price increases. But it is a serious problem that cannot be conjured away with simplicity. It needs to be handled with perseverance, over time, and without populism.
We have given several assignments to our authorities - Finansinspektionen, Konjunkturinstitutet, Konkurrensverket and others - to improve and strengthen consumers' position in different parts of the economy.
Mr. Speaker! Overall, we are now breaking with the development that has been so harmful to Sweden, where among other things, the gangs and crime have taken a grip on society. We need to prioritize resources there – that is how it is – because previous governments have allowed Sweden to end up in a situation that requires very powerful measures to rectify.
Patrik Björck speaks about protecting households. Let me strike a strong blow for that.
Gun, who has been driven to the enforcement authority due to the Social Democrats' lottery, says: "One is no longer safe in society, everything is just about tricking us old people. I never thought it would become like this, I am a farm girl and have brought home with me that one should do right and be honest. It is hard to keep up, I think."
It is not in that way that this government intends to handle the situation. We are now taking measures against the over-indebtedness.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.