Treasury ministers were answering questions in the Commons.
Subjects covered included...
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EU Single Market Access: Manufacturing and the Economy
(Warwick and Leamington)
(Lab)
1. What assessment the Government have made of the potential effect
on the (a) manufacturing sector and (b) economy of the UK not
having access to the EU single market. [900723]
The Chancellor of the Exchequer ()
We want a relationship with the EU that is based on friendly
co-operation between sovereign equals and is centred on free
trade. The economy has grown every year since 2010. Employment is
at a record high and wage growth has outpaced inflation for 17
consecutive months. The upcoming Budget will set out ambitious
plans to level up across the UK and usher in a decade of renewal.
The Chancellor will be aware that the CBI has spoken out and
claimed that business is not ready for Brexit, which has already
cost businesses billions of pounds in planning. But the advice is
unclear. I spoke to the Federation of Small Businesses and to
several small businesses last night, and they are extremely
concerned that neither the infrastructure, nor the advice, are in
place.
I can assure the hon. Gentleman that we are working very closely
with individual businesses and their representative groups. The
one thing they have certainly welcomed in the past few weeks is
that we have ended the uncertainty around Brexit by actually
leaving the European Union, as we said we would. We will be
working very closely with business as we forge that new free
trade agreement, which I know we will do.
(Stalybridge and Hyde)
(Lab/Co-op)
Three years ago, at my first shadow Treasury questions from this
Dispatch Box, I asked the Government about their plan to continue
market access for financial services to EU countries after
Brexit. Since that time, the Government’s ambitions have faded
from the wide-ranging access-all-areas free trade deal that we
were promised, to a basic agreement barely covering goods. The
Chancellor has announced this morning that he is asking for
enhanced equivalence for financial services, which the EU has
already ruled out and which does not even exist in sectors such
as insurance. This is our largest export sector, so how is it
that we are still waiting for a credible plan after three years?
The hon. Gentleman needs to get his facts right. The EU has not
ruled out equivalence. Indeed, it agreed in the political
declaration to work at speed on an equivalence decision by the
end of July this year, and that is welcome. We are working very
carefully and closely with the EU on having a broad agreement
that will mean that our financial services continue to thrive—not
only for our benefit, but for its benefit.
(Glasgow Central)
(SNP)
Figures released this morning by the Office for National
Statistics show that GDP was flat in quarter four, growth is at
one of its slowest rates since the financial crisis, the service
sector is stagnating, and manufacturing has been particularly
hard hit. When will the Chancellor accept the reality that these
Tory Brexit plans are playing havoc with the economy, and
damaging the wellbeing and prospects of all our constituents?
The hon. Lady will know that growth would have been hit by the
uncertainty created in this Parliament before the general
election. Since the general election, confidence is back because
this country has said no to Marxism and has got on with Brexit.
The Chancellor puts forward a ridiculous prospect of the choices
facing this country, because Brexit is the real and present
danger for the economy. Just-in-time manufacturing is a critical
part of the economy. Elizabeth de Jong of the Freight Transport
Association has said of the revelation that the Chancellor of the
Duchy of Lancaster’s smart border will not be ready until 2025:
“Frictionless trade has been kicked to the touchline… It’s going
to be really costly for business.”
Can the Chancellor tell me what impact four years of Brexit chaos
at the border will have on the UK economy and jobs in
manufacturing in all our constituencies?
The hon. Lady talks about the importance of manufacturing. Since
the change in Government in 2010, we have seen 58% growth in auto
manufacturing and 22% growth in aerospace manufacturing. Again,
because of the recent general election result, a survey of
manufacturers carried out by the CBI a few weeks ago saw the
biggest increase in confidence in the history of that survey—in
more than 60 years.
(Chelsea and Fulham) (Con)
The financial services sector generates 7% of UK GDP, provides
1.1 million jobs and is responsible for £29 billion-worth of tax
revenue. Does the Chancellor agree that we need to ensure that
the financial services sector is looked after in any trade
agreement with the European Union if we are to pay for the
infrastructure projects that we expect an announcement on today?
My right hon. Friend, as always, is absolutely right. The
financial services sector employs millions of people—not just in
London, but in Edinburgh, Birmingham and so many other parts of
our great country—and generates more revenue for public services
than any other industry. He is right that financial services will
be a key part of forging that new relationship with our European
friends.
(Redcar) (Con)
Does my right hon. Friend agree that the best way to boost our
manufacturing sector, and the economy, is by creating 10 new free
ports—and the best place for a free port is, of course, in
Redcar?
I absolutely agree with my hon. Friend on the importance of free
ports. It is a reminder that, as we forge a new chapter for our
country outside the EU, there is so much we can do to boost
opportunity in our country, and free ports are a key part of
that.
(Chelmsford) (Con)
About 3,000 people work in the insurance sector in Chelmsford—it
is a massive contributor to our economy and to the tax take.
Given that the EU grants equivalence in the insurance sector to
countries such as Bermuda, is it not perfectly reasonable that
the EU should offer the UK the same?
My hon. Friend is absolutely right. On day one, we will have
exactly the same rules. We will not be rule takers. We will have
the right to diverge in future, but on day one we can absolutely
see why the EU will be looking very carefully at the equivalence
decision.
(Westmorland and Lonsdale)
(LD)
In the South Lakes we have 3,000 local families waiting for a
council home, yet the Government’s own Migration Advisory
Committee says that the Government’s plan for visas and migrant
pay will see an 8% reduction in the construction workforce. So
will the Chancellor explain who is going to build the homes that
families in the South Lakes so desperately need?
The hon. Gentleman will know that, under this Government, since
2010, we have seen a dramatic increase in the number of homes
being built. I think that last year there was the highest number
of homes built in all but one of the past 30 years. When it comes
to building more of those homes, of course we do need enough
workers in the industry. That is exactly what our points-based
system is about—making sure that it focuses on those areas where
we need most support.
Transport Infrastructure Funding
(South Ribble)
(Con)
2. What steps he is taking to allocate funding for improved
transport infrastructure throughout the UK. [900724]
(Rutland and Melton)
(Con)
4. What steps he is taking to allocate funding for improved
transport infrastructure throughout the UK. [900726]
(West Bromwich East)
(Con)
19. What steps he is taking to allocate funding for improved
transport infrastructure throughout the UK. [900742]
The Chief Secretary to the Treasury ()
Better transport is central to our ambition to level up and
spread opportunity across the United Kingdom. That is why the
Chancellor will be unveiling, alongside his Budget, the national
infrastructure strategy, which will set out further details of
our plan to increase capital investment to record levels and
transform the UK’s infrastructure.
South of Preston, there is only a single crossing of the River
Ribble and a single-track bridge crossing the River Douglas,
creating massive choke points for the residents and workers of
Lancashire. Will my right hon. Friend consider additional bridges
at these crossing points, which are strategically important for
the whole of Lancashire as well as South Ribble?
My hon. Friend is absolutely right about the importance of
relieving congestion for improving day-to-day quality of life and
driving economic growth. I am pleased that last year her
constituency benefited from a £30 million investment to do just
that. But there is always more we can do, and I would urge her to
consider the Department for Transport’s pinch points fund.
Places such as Melton Mowbray in my constituency have very low
unemployment thanks to a thriving food manufacturing sector and
the business-friendly policies of this Government, but we need to
see wages rise locally. What investment has my right hon.
Friend’s Department made to make sure that local councils can
provide the transport needed, particularly buses, so that people
can get to work and revitalise our high streets?
I am delighted to hear about the economic growth that is
happening in my hon. Friend’s constituency. I know that her local
councils are a key part of driving that. I am pleased to say that
the Government announced today a £5 billion package to support
local transport infrastructure such as buses and cycleways,
alongside our existing £3.6 billion towns fund, which 16
different places across the east midlands have benefited from.
Andy Street’s vision to revolutionise our transport networks in
the west midlands, coupled with the continuation of the HS2
project, will hugely benefit my constituents in West Bromwich
East, especially those in Great Barr. The vision that Andy set
out only last week included the expansion of the West Midlands
Metro system. Ahead of the Budget next month, will my right hon.
Friend look at what further funding can be made available to
level up our transport infrastructure in the west midlands?
My hon. Friend is right to highlight the importance of local
intra-city transportation. Obviously the Prime Minister will be
making a statement later about national infrastructure. We heard
what had to say. We are engaging
with the Mayor on his exciting plans for intra-city transport and
the expansion of the metro line in the west midlands area.
(Ogmore) (Lab)
May I press the Chief Secretary on infrastructure funding for
south Wales, and particularly our railways? I have been asking
for three years for additional investment in station
improvements, electrification and the level crossing issue in my
constituency. If there is any additional funding for
infrastructure, please do not forget Wales.
I am happy to tell the hon. Gentleman that this Government are
committed to improving transport infrastructure across the United
Kingdom. Obviously, some matters are devolved. Network Rail has a
£48 billion plan for rail infrastructure. I would be happy to
hear from him about the specific projects that he is interested
in taking up with it.
(Bradford South) (Lab)
Reports over the weekend that the Bradford city centre stop is to
be dropped from the Northern Powerhouse Rail route are extremely
concerning. Given the importance of NPR to any improved transport
infrastructure, can the Minister confirm here today that the
Government’s preferred route still includes Bradford?
I am a passionate believer in improving east-west connectivity
across the north. I am pleased to say that I met the leader of
Bradford Council just the other week. Bradford has an exciting
future as one of the younger cities in the country. I believe
that the plans that NPR has put forward include Bradford. We are
happy to look at those. Transport for the North is actively
engaging with local stakeholders on the various routes for
improving connectivity between Manchester and Leeds, and that
includes Bradford city centre.
(East Antrim) (DUP)
What progress has been made on the feasibility study on a bridge
between Northern Ireland and Scotland, as promised by the Prime
Minister? More immediately, have there been any discussions with
the Scottish Government on the upgrading of the A75—an important
road link to Northern Ireland and important to the economic
corridor in south-west Scotland?
The Prime Minister is passionate about improving connectivity
across the United Kingdom. As my right hon. Friend the Member for
East Antrim () will know, that is one
particular project that the Prime Minister has expressed interest
in and he can assume that we are busy at work fleshing out what
it might look like.
Net Zero Emissions Target
(Henley) (Con)
3. What fiscal steps he is taking to ensure that the Government
meets its target of net zero emissions by 2050. [900725]
The Exchequer Secretary to the Treasury ( )
The clean growth strategy sets out our proposals for
decarbonising all sectors of the UK economy through the course of
the 2020s. This year, the Government will be setting out further
detail on plans to reduce emissions in key sectors such as
transport, energy and buildings, as well as publishing our net
zero review.
The next UN climate conference is the perfect opportunity to set
out exactly what we are doing to get our emissions down to net
zero by 2050. Can the Minister assure me that the Government are
committed to doing all they can to achieve that and to delivering
the green jobs that come with it?
Mr Clarke
I am a passionate believer in the net zero agenda, and I believe
that it is perfectly congruent with economic growth. COP26
presents a huge opportunity for the UK and globally. We are
already a leader in tackling climate change, having reduced the
emissions intensity of our economy faster than any other G20
country. We will be doing more at Budget.
(Knowsley) (Lab)
The Minister will be aware that, as part of the drive towards
zero emissions, there was a recent announcement about bringing
forward the phasing out of diesel, petrol and hybrid vehicles to
2035. What assessment has he made of the economic and fiscal
impact of doing so, and in particular the loss of jobs that will
happen, because the industry is in imminent danger of collapse?
Mr Clarke
We are consulting on the option of accelerating the phasing out
of petrol and diesel cars, because the average lifespan of a
vehicle is around 14 years, and if we are to hit our net zero
targets by 2050, we need to be sensitive to that. I can reassure
the right hon. Gentleman that we are listening carefully to the
industry on this issue. Just last week, I met the Society of
Motor Manufacturers and Traders for a productive conversation on
how we can do this in a way that supports the sector.
Small Businesses
(Totnes) (Con)
5. What fiscal steps he is taking to help small businesses.
[900727]
(Bexleyheath and Crayford)
(Con)
9. What fiscal steps he is taking to help small businesses.
[900731]
The Economic Secretary to the Treasury ()
The UK’s 5.8 million small businesses play a vital role in our
economy. We have lowered corporation tax from 28% in 2010 to 19%.
We have introduced the employment allowance, to reduce employers’
national insurance contributions bill by £3,000 every year, and
we have reduced the business rates burden, so that more than
675,000 of the smallest businesses pay no rates at all.
Last week, Members from across the House came together to
celebrate our beers, breweries and pubs. Will the Chancellor and
his team raise a glass to our pubs and breweries and lower the
duty on those institutions?
The Treasury team love pubs, and we recognise the importance of
pubs to the economy and to community life up and down this
country; they provide a place to socialise and drink responsibly.
That is why we have frozen the duty over six of the last seven
years, which means that a pint of beer is 14p cheaper than it
would have been otherwise, and we are now at a 30-year low in
real terms.
We all know that small businesses are the driver of growth and
prosperity across our country, but too many struggle because of
high business rates. Can the Minister confirm that the
Conservative Government will extend the retail discount of 50%
later this year, giving a much-needed tax cut to millions of
small businesses on high streets across the country?
I am delighted to confirm that the retail discount of 50% will
operate from 1 April this year. We will also extend the discount
to include cinemas and music venues, extend the duration of the
local newspaper office space discount, and introduce an
additional discount for pubs, worth £1,000, for up to 18,000 pubs
up and down the country.
(Islwyn) (Lab/Co-op)
Most businesses in my constituency are microbusinesses employing
one or two people. The biggest problem they have is larger firms
not paying their bills on time. What measures can be put in place
to ensure that larger companies pay small companies on time so
that they can continue with their business?
The hon. Gentleman is right to raise that point. That is why we
have the Small Business Commissioner. We are working closely with
trade bodies to ensure best practice. The Department for
Business, Energy and Industrial Strategy leads on this, but we
work closely with that Department so that more progress is made
on this vital matter.
(Bristol West) (Lab)
But small businesses will be affected by the news over the
weekend that there will not be frictionless trade and that the
Government are insisting on not sticking to a level playing
field, which will affect small businesses, whether they import or
export. So what is the Chancellor of the Exchequer and his
Department doing to prepare small businesses for the inevitable
changes that that will bring?
We are working closely with the representative organisations to
understand those concerns, but it is important that we move
forward, secure a free trade agreement and give certainty to
small businesses. Their principal concern over the past year is a
lack of progress, and it is our responsibility to remove that
uncertainty and reach a clear position.
National Infrastructure
(Eastleigh) (Con)
6. What steps he is taking to improve the UK's national
infrastructure. [900728]
The Chancellor of the Exchequer ()
Infrastructure is a top priority for the Government, which is why
we are publishing the national infrastructure strategy alongside
the Budget. It will set out further details of the Government’s
plan to increase investment to transform the UK’s infrastructure.
I welcome my right hon. Friend’s commitment to vital national
infrastructure, but does he agree that bespoke local
infrastructure projects benefit the national infrastructure
network by increasing connectivity? An example is the much-needed
Chickenhall Lane road link in Eastleigh, for which my
constituents have been waiting for over 20 years.
My hon. Friend is right. Local transport is the backbone of our
community, which is why hopefully a welcome announcement will be
made today on buses and cycling—a new £5 billion package on local
transport. There is also the £150 million fund for smaller
projects to deal with congestion hotspots. I would be pleased to
consider the Chickenhall Lane link road in the next available
competition.
(Blaenau Gwent) (Lab)
Blaenau Gwent needs investment in the Ebbw Vale to Cardiff train
line for extra services. The shared prosperity fund could be a
crucial route to providing that. When will the fund be ready to
support infrastructure projects in our eastern valleys?
The hon. Gentleman will know that, as we transition from EU
structural funds to the shared prosperity fund, it will be
important that we set out exactly how that will work. With
reference to his question, it means that the Welsh Government
will have to work closely with us to see how we can use that for
infrastructure projects in Wales.
(East Surrey)
(Con)
Thanks to heavy usage by HGVs, Surrey is sometimes called the
pothole capital of England. What steps is the Department taking
to invest in tackling potholes nationally, which I am very keen
to see in East Surrey?
My hon. Friend raises an important issue that affects many
communities. All our constituents would say that the number of
potholes is unbearable nowadays, which is why we made it clear in
our manifesto that we will have the largest fund ever put in
place by any Government to tackle potholes, with more details at
the Budget.
Off-payroll Working Rules Review
(Newport East) (Lab)
7. What progress his Department is making on its review of the
implementation of changes to the off-payroll working rules; and
if he will make a statement. [900729]
(Stretford and Urmston)
(Lab)
17. What steps he is taking to review the implementation of
changes to the off-payroll working rules; and if he will make a
statement. [900739]
The Financial Secretary to the Treasury ()
The review of the off-payroll working rules reform was announced
on 7 January 2020. The reform is due to be extended to medium and
large-sized organisations in all sectors from 6 April. It is
determining whether any further steps can be taken to ensure
smooth and successful implementation, and a series of roundtables
with stakeholders have already been conducted. The review will
conclude by mid-February, after which recommendations will be
made public.
With the roll-out of IR35 in the private sector fast approaching,
there is already concern that companies are making blanket
determinations, forcing genuine contractors into contracts that
tax them as employees but with no employment rights. Ahead of the
protest here tomorrow, will the Government listen, pause the
process and work with the industry to do a proper review?
The hon. Lady may be aware that we have already made a small but
important change to the roll-out as a result of the review. We
are not aware of blanket determinations being made, although it
must be said that many firms are choosing to acknowledge
disguised employment and bring those contractors in-house. The
hon. Lady should also be aware that there are various routes by
which determinations can be challenged, including, if necessary,
a submission under the income tax self-assessment process, for a
final determination.
We all want to crack down on tax avoidance but legitimate
contractors in my constituency face uncertainty about their
status and tax liability thanks to unclear HMRC guidance and the
unreliability of CEST—check employment status for tax—and the
firms they work for are cancelling contracts because of the
confusion. What is the Minister doing to address their concerns?
We are conducting a review to ensure that this is as smooth as
possible. We recognise that there is difficulty here. Some 18
months have passed since the original reform of status
determination was announced and in that process we have had a
consultation, draft legislation and further discussions and
consultation, and we are having a further review now to make sure
it is properly and smoothly rolled out.
(New Forest West) (Con)
Against how many of the pillars of taxation did the Economic
Affairs Committee in the other place judge the 2010 legislation
on the loan charge to have failed?
We have a question about the loan charge later on, so I look
forward to my right hon. Friend’s further question then. He can
answer on the number of pillars because I am sure he has
scrutinised the Committee’s hearings very carefully. What I can
tell him is that the fundamental principle of tax is that it
should be properly collected from people who owe it and who may
be avoiding it, and that is what this is designed to do.
Zero VAT Rate: E-publications
(Linlithgow and East
Falkirk) (SNP)
8. What recent assessment his Department has made of the
potential merits of introducing a zero-rate of VAT for
e-publications. [900730]
The Financial Secretary to the Treasury ()
I thank the hon. Gentleman for his question about e-publications
and see by the way, Mr Speaker, that your predecessor Speaker
Bercow’s book, aptly named “Unspeakable: the Autobiography” has
just been published. Apparently it is an online bestseller in the
rather surprising, slightly niche category of blues musician
biographies. Unlike many other e-books, it is considerably
cheaper than the book itself; whether that will remain so is not
clear. I do not know whether you have had a chance to peruse the
work, Mr Speaker, but if you have, I am sure you will agree that
no reader would have their appetite to read it affected by a
reduction in tax. What this brings out is that the pricing of
e-books is a commercial decision and it is far from clear whether
changing the tax would affect that decision.
I thank the Minister for his entertaining answer. Scottish
National party Members are very disappointed that the last
Government refused to back our demands to remove VAT from
electronic publications, so with the Budget only a month away,
will he consider a change of policy so that at the very least,
online children’s books and academic journals can become more
affordable?
The hon. Gentleman is absolutely right that there are benefits
associated with extending the zero rate of VAT in this area, as
in others. The task for Government is to work out what is the
right thing to do, all things considered. All I can say is that
we have responded to the Cairncross review in part of this area,
and we continue to keep all taxes under review, especially in the
lee of a budget.
(Lichfield) (Con)
While agreeing with the point made for the SNP by the hon. Member
for Linlithgow and East Falkirk (), does the Minister not
find it somewhat ironic that the only way we can reduce the rate
of VAT to zero is through Brexit, yet the SNP wishes to remain in
the EU, and we would therefore not be able to reduce VAT if that
were the case?
That is a very telling point, and I draw the House’s attention to
the parallel issue of sanitary products for women, on which I am
pleased to say we will be able to act after we have left the EU.
Local Authority Funding: Discussions with Secretary of State
(Enfield, Southgate) (Lab)
10. What recent discussions he has had with the Secretary of
State for Housing, Communities and Local Government on the
adequacy of allocations of funding for local authorities.
[900732]
The Chief Secretary to the Treasury ()
The financial health of local authorities remains a priority for
the Government and for me personally as a former local government
Minister. I am pleased to say that next year’s local government
finance settlement outlines and will deliver the biggest year on
year increase in local government spending power for over a
decade.
For over 10 years, Enfield has been significantly underfunded,
which has had a huge impact on the provision of local services.
The proposed settlement goes nowhere near addressing the
shortfall. Will the Minister meet me and the Enfield Borough Over
50s Forum to discuss Enfield’s needs?
I am pleased to say that the Ministry of Housing, Communities and
Local Government is undertaking a review of the funding formula
for local government, and I am sure that Enfield Council has
participated in that. There will be a formal consultation later
this year, and I encourage the council to input its particular
needs if those are not adequately captured by today’s formula. In
the forthcoming financial year, Enfield can look forward to an
almost 6% cash increase in the spending power it has available
for its residents and communities.
(Bootle) (Lab)
In addition to the Secretary of State for Housing, Communities
and Local Government, has the Chief Secretary had any discussions
with the representatives of Hyndburn, Burnley, Leigh, Blackpool
South, Colne Valley, Durham North, Keighley, Stoke-on-Trent
Central and North or Workington concerning the adequacy of the
funding for the councils covering their constituencies?
In my previous role I had many conversations with councils up and
down the country. Indeed, in this job I take representations from
the Local Government Association, the District Councils’ Network
and the Core Cities consortium, among others. The point is that
this will be an evidence-based formula that looks at the various
needs of all authorities up and down the country. It is being
done in partnership with independent academics to help us arrive
at a formula that is fair for every part of the country and every
local authority.
Clearly those discussions were not very productive, were they? I
can tell hon. Members that, according to the LGA, the likely
outcome is 6.6, 6.6, 6.5, 6.4, 6.2, 10, 10, 9 and 4. I am
referring not to Olympic ice skating marks, but to the additional
millions that will be lost respectively by the councils of the
hon. Members I listed. In all, 37 councils of the 50 new Tory
MPs—that is 70%—are set to lose millions under the Government’s
so-called fair funding formula. Did the Chief Secretary mention
that to his new colleagues, or has he been too busy keeping an
eye on the potential job vacancies?
The figures the hon. Gentleman refers to are pure speculation.
The formula has not been concluded yet, so it is a bit difficult
to talk about the conclusions in advance of that. There will be a
consultation. Regardless of the type of area that any Member in
this Parliament represents—rural or urban, north or south—it will
be an evidence-based formula. All the various criteria that drive
local government spend, whether it is rurality or deprivation,
will be taken into account. All Members can have input into that
process and can have confidence that the final formula will be
fair and, importantly, evidence-based.
(St Ives) (Con)
The Treasury team will know how difficult it is to get a funding
formula to operate for places like the Isles of Scilly, which are
remote and sparsely populated. Good work is being done to bring
health and social care together under one roof. Can the Minister
shed more light on how difficult areas such as this can be funded
in the future?
My right hon. Friend the Chancellor met my hon. Friend and his
local authority recently to discuss this issue, and I have taken
representations from them in the past. My hon. Friend is right
that rurality and the particular geographic challenges posed by
his constituency should be taken into account in the new formula.
I am sure that my right hon. Friend the Secretary of State for
Housing, Communities and Local Government will do that when he
looks at all the representations in the spring.
(West Worcestershire) (Con)
In addition to the Secretary of State for Housing, Communities
and Local Government, has my right hon. Friend had a chance to
speak to the Secretary of State for Education about the pressure
on school budgets from the local government pension scheme? On a
visit to the excellent Hanley Castle High School in my
constituency last week, I discovered that almost half its payroll
is covered by the local government pension scheme and that it is
experiencing a lot of budgetary pressure from that.
The local government pension scheme is fully funded, which means
that all local authorities contribute on an annual basis. It is
right that that is taken into account when setting annual
budgets. I am pleased that the Government have outlined a
three-year school settlement, which will take school funding up
by £4 billion in real terms over the forthcoming spending period.
Those extra resources will allow schools to deal with the pension
pressure and invest in our classrooms, which is where the money
needs to go.
(Hackney South and Shoreditch)
(Lab/Co-op)
It was extraordinary to hear the Treasury Minister talk about the
biggest year-on-year increase in funding after a decade of major
cuts. He knows, because he can do the maths, that that is nowhere
near making any recompense. The Public Accounts Committee looked
in detail at local government spending and we concluded that in
simple terms, it was being squeezed massively, particularly for
children’s and adult’s social services. When will he acknowledge
that for many things that his Government purport to want to
deliver, local government is key and that it needs sustainable
and increased funding to make up for the cuts of the previous
decade?
Local government deserves enormous praise for the hard work that
it did in helping to restore this country’s public finances to a
sustainable state. We all know why we were in that situation a
decade ago, but we can now look forward with confidence. Local
government is benefiting from a very significant increase in
spending power this year. The hon. Lady is right to highlight the
pressure on social care, which is one of the largest areas of
spend, which is why the Government have just committed an extra
£1 billion in social care grant to help local authorities to
alleviate that pressure this year and into the future.
Equity of Economic Opportunity
(Gedling) (Con)
11. What plans he has to help ensure equity of economic
opportunity throughout the UK. [900733]
The Chancellor of the Exchequer ()
We will level up opportunity across the UK to ensure that every
region and nation benefits from growth, including through better
infrastructure, public services and investment in skills. I will
set out more details in the Budget through the national
infrastructure strategy.
Many of my constituents are delighted about the Government’s
plans to level up funding across the country. Will my right hon.
Friend tell me what that will mean for the people of east
midlands and my constituents in Gedling?
As we level up opportunity in every region, we will make sure
that the whole country benefits, including the east midlands.
That includes, for example, the £3.6 billion towns fund that we
have announced, with 16 town deals in the east midlands. The
Government are also committed to the £250 million growth deal,
which provides funding for the Derby, Derbyshire, Nottingham and
Nottinghamshire areas and will include projects such as the
Gedling access road.
(West Ham) (Lab)
This is beyond parody. The reality is that after 10 years of Tory
rule, the five richest families in this country own more wealth
than 13 million of us put together. Fourteen million of us live
in poverty. Two out of three of those are in working households.
Childcare, transport and the cost of rent hold millions back, so
will the Chancellor accept some tests for his Budget? Will he cut
child poverty? Will he cut homelessness? Will he end the need for
food banks? Will his Budget match his words? The hell it will.
Let me tell the hon. Lady what we have seen under 10 years of
Tory rule, after Labour’s great recession. We have had nine
consecutive years of growth. We have an economy that is nearly
17% bigger than it was in 2010, and 3.9 million jobs have been
created—I would think that a party that calls itself the Labour
party would welcome that. Unemployment is at its lowest level for
45 years, and according to the International Monetary Fund, our
economy will grow faster this year than Italy, Japan, France and
Germany.
(Thirsk and Malton)
(Con)
Small and medium-sized enterprises are critical to economic
opportunity and would undoubtedly benefit from greater access to
business finance, yet challenger banks suffer from the same
capital requirements as larger banks, despite the fact that they
do not present the same systemic risk. Will my right hon. Friend
say what he might be able to do to change that situation?
This is something that I have discussed with regulators. My hon.
Friend is right in his general point about challenger banks and
the risks that they may or may not represent. It is right that we
take a fresh look at this because having more competition in the
banking sector is a good thing, especially for SMEs.
Co-operative and Mutual Businesses: Tax Contribution
(Oldham West and Royton)
(Lab/Co-op)
12. What recent assessment his Department has made of the
contribution to the public purse of tax paid by co-operative and
mutual businesses. [900734]
The Economic Secretary to the Treasury ()
I recognise the positive impact that co-operatives and mutuals
have across all sectors of the economy, including retail,
agriculture and financial services. No assessment has been made
of the amount of tax paid by co-operative and mutual businesses,
but I note that the report last year from the all-party group for
mutuals found that mutuals generate over £130 billion to benefit
the wider economy each year.
It is a matter of fact that the three largest co-ops in this
country pay more tax than Facebook, Amazon and Caffé Nero
combined, so not only are they creating jobs; they are also
paying fairly into the Exchequer. Will the Minister meet me and
representatives from the co-op and mutuals sector to discuss that
part of the economy and make sure that Britain can thrive in an
inclusive way?
Yes, I will. There are 7,000 co-ops across the United Kingdom,
employing nearly a quarter of a million people. I have had
numerous meetings over the past two years with representatives of
co-ops and mutuals, and we had a mutuals workshop last July. I am
very happy to meet the hon. Gentleman to discuss the recent
Manchester mutuals report and to see what we can do together.
Mr Speaker
I call .
(Dudley South) (Con)
Thank you, Mr Deputy Speaker—[Interruption.] I am sorry, Mr
Speaker—it has been so long!
Perhaps I should declare an interest as a member of the
Midcounties co-operative. Will my hon. Friend consider broadening
the eligibility for social investment tax relief so that more
mutuals and social enterprises can deliver excellent services and
outstanding social value?
I always listen very carefully to what my hon. Friend says. I
think the best way forward would be for me to meet him to discuss
his specific proposals and see what can be done.
Loan Charge 2019
(Feltham and Heston)
(Lab/Co-op)
14. How many people will be affected by the 2019 loan charge
after the Government have implemented the recommendations of Sir
Amyas Morse’s review. [900736]
(Tewkesbury)
(Con)
20. How many people will be affected by the 2019 loan charge
after the Government have implemented the recommendations of Sir
Amyas Morse’s review. [900743]
The Financial Secretary to the Treasury ()
Of the estimated 50,000 individuals affected by the loan charge,
the Government currently estimate that more than 30,000 will
benefit from the changes. That includes about 11,000 people who
will be taken out of paying altogether. In addition, individuals
who have settled or who are settling their tax liability with Her
Majesty’s Revenue and Customs will be out of scope of the charge.
Neither the law nor HMRC made clear the position regarding loans
and self-employed people. Indeed, it was not until 2016 that it
was announced that the law would be changed to include the
self-employed and others who did not even find out until a year
or two later, such as my constituent Dhruv Salotra. Will the
Financial Secretary do the obvious thing, get rid of all
retrospection and apply the loan charge from when the law was
clear and applied to everyone, including the self-employed, and,
in addition, clamp down on those who promoted these disguised
renumeration schemes in the first place?
The hon. Lady is absolutely right that it is important to crack
down on promoters, and at the Budget we will bring forward a
package about how to do that. Her wider point, however, is wrong:
this is not a retroactive measure. It is also true that the
Government have to some extent been vindicated by Sir Amyas
Morse, who found that the loan charge was an appropriate way to
respond to tax avoidance and, after detailed argumentation,
suggested a date in December 2010 as the correct date from which
to date the legality of it.
Mr Robertson
But even 2010 is 10 years ago, so if the law was clear then, as
the report suggests, why did HMRC not act then? Surely this
matter is its responsibility.
HMRC did pursue these cases quite vigorously. Sir Amyas found, on
the basis of detailed consideration, that the law was clear then,
and therefore HMRC rightly believed that people would accommodate
it. Of course, it pursued people who had been avoiding tax
through disguised renumeration schemes for many years before
that, and it will continue to do so for those that have been
carved out by the loan charge review.
(Brentford and Isleworth)
(Lab)
The Treasury has accepted some of Sir Amyas Morse’s
recommendations, but there is confusion about some of them. A
constituent of mine got caught in a disguised renumeration scheme
before 2010, and yet he is still not convinced that he is in the
clear and has that fear hanging over him. What does the Financial
Secretary have to say about that?
The hon. Lady is quite wrong. We accepted all but one of Sir
Amyas’s recommendations, and we did not accept that one because
the issue he raised was already being handled very well within
the system. If the hon. Lady has a specific concern, she is very
welcome to raise it with tax commissioners or, indeed, with me,
although on an anonymised basis because obviously I cannot deal
with specifics.
Productivity
(Havant)
(Con)
16. What steps he is taking to improve UK productivity. [900738]
The Chancellor of the Exchequer ()
You ain’t no Deputy, Mr Speaker!
Increasing productivity is the best way to boost wages and
improve living standards. We have worked hard to build a
stronger, fairer economy, dealing with the deficit, helping
people into work, and cutting taxes for families and businesses.
The link between investment in research and development and
increased productivity is well recognised. What steps is my right
hon. Friend taking to encourage more private sector investment in
R&D to help Britain become a leader in the fourth industrial
revolution?
I thank my hon. Friend for all the work that he has done to put
the UK at the forefront of the fourth industrial revolution. He
is right to raise the importance of research and development. We
are committed to investing an additional £7 billion in R&D by
2021-22—the largest increase in 40 years—and, as my hon. Friend
will know, in our manifesto we committed ourselves to going even
further.
(Wirral South) (Lab)
The people with the least productive, lowest-paid jobs, although
often highly skilled, are women working in care, retail or
hospitality. Where is the Chancellor’s productivity plan for the
women in our country?
The hon. Lady will be pleased to know that we have more women in
employment than ever before in our history, and that the gender
pay gap is the narrowest ever recorded. However, she is right: we
need to do more, and more investment will help, whether it is in
infrastructure or skills. What will also help is our new
points-based immigration system. Too often businesses have sought
to take unskilled labour from abroad and cut the wages of people
locally, and we must put an end to that as well.
Topical Questions
(Preseli Pembrokeshire) (Con)
T1. If he will make a statement on his departmental
responsibilities. [900748]
The Chancellor of the Exchequer ()
We have ended the uncertainty over our departure from the
European Union, and we stand at the beginning of a new chapter. I
know that the future is bright as we level up our country and
unleash Britain’s potential. We have confirmed that 31 million
people will receive a tax cut in April, and in the Budget on 11
March I will continue to lay the foundations for a decade of
renewal. We will also set out our plans for an infrastructure
revolution and for better investment in our most important asset
of all, our human capital.
Will my right hon. Friend reaffirm that when we talk about
levelling up, we are indeed talking about levelling up the whole
United Kingdom—all regions and all nations? May I encourage him
to show real determination to ensure that the devolved nations
also see and feel the benefit of his ambitious infrastructure
proposals?
I can absolutely confirm that to my right hon. Friend. We are
blessed with talent throughout our country. Wherever we look, we
have talent. Our country is oozing with talent, and that, of
course, includes Wales: we have just seen a demonstration of that
talent. We need to ensure that there is much more opportunity,
which means investment in infrastructure and skills and retaining
a dynamic, competitive economy.
(Hayes and Harlington)
(Lab)
In the last month we have seen the Financial Times predicting
that the Chancellor will miss his balanced budget target, and
today we have seen zero growth in the economy. At the same time,
Mr has demanded cuts in taxes
and massive spending commitments, so the Chancellor has resorted
to floating a possible raid on middle-income pensions, a mansion
tax—once described as Marxist—and a 5% cuts round to find some
money to pay for Mr Cummings’s demands. Yet in the real world out
there, the victims of Wonga, the payday loan company, were told a
fortnight ago that they would receive less than 5% of the
compensation that they are owed. Will the Chancellor take a break
from his arm-wrestling with Mr Cummings, and introduce measures
to compensate the Wonga victims fully?
I think that I have to correct myself. I said that there was
talent throughout the country, but, judging by what we have just
heard, I do not think that that includes the Labour party.
There is all sorts of speculation about the Budget, and I am not
going to respond to that. However, the right hon. Gentleman will
know that when the Budget is published, it will be published
alongside a report by the independent Office for Budget
Responsibility. Those are the figures that are going to matter,
not the ones that are speculated about in the press. As for
growth, the right hon. Gentleman will also know that although
there has been a fall in global growth, the International
Monetary Fund forecasts that Britain will grow faster this year
than France, Germany, Italy and Japan.
I asked about Wonga [Hon. Members: “You did.”] On the basis of
that answer, I can see why No. 10 nicknamed the right hon.
Gentleman CHINO: Chancellor in name only.
Wonga is just one example of the recent scandals in the financial
sector. We have seen the scandals of closet tracking last year,
London Capital & Finance, Woodford Investment Management, the
tax avoidance by Lycamobile—a Tory party donor—NMC Health’s
misreporting today, large-scale money-laundering, and audit
failure after audit failure. Regulation of the finance sector—I
say it again—is clearly failing, and now there is the risk to
jobs resulting from the tardiness of a post-Brexit settlement.
Let me put this to the Chancellor: can he assure me that the
White Paper that he has promised today will address the failure
of regulation and the culture of recklessness and abuse that has
developed in some sections of the City, in addition to the risks
from Brexit, so that we can plan a long-term stable future for
our finance sector?
I remember that not long ago the shadow Chancellor stood here and
said that he wanted to be known as the “people’s Chancellor”. I
think the people had a very different idea, however. On his
question about high-cost credit, when I was last in the Treasury
as Economic Secretary, that was the first time that any
Government had introduced proper regulation around high-cost
credit. This is something that we keep under review, which is
why, as we present our White Paper, we will be looking to see
what more we can do.
(Wimbledon) (Con)
T2. Many in financial services will warmly welcome the
Chancellor’s remarks in the papers yesterday about equivalence
arrangements, but does he agree that the real value to those
arrangements is in the length of the revocation period? Will he
therefore press for revocation notices of a minimum of a year and
preferably three years? [900749]
Yes, I agree with my hon. Friend. Equivalence arrangements, done
properly, would require a period of stability to be agreed, and
that is exactly what we are working on with our European friends.
(Sefton Central) (Lab)
T3. Funding for coal mining ended in 2012, but it carries on for
oil and gas, as we saw at the recent Africa summit and in the
lobbying for the Petrofac oil refinery in Bahrain. When is the
Chancellor going to end funding for fossil fuel projects and take
the action that is needed to tackle the climate crisis? [900750]
The Exchequer Secretary to the Treasury ( )
The UK takes our climate commitments exceptionally seriously, and
we have pledged to end the use of unabated coal here in the UK by
2025. Clearly we want to ensure that that applies to our work
overseas as well, and that is something that the Government as a
whole take very seriously. It is the subject of ongoing
ministerial discussions and we are determined to ensure that we
support the right initiatives across the world.
(Meon Valley) (Con)
T4. Over the past few weeks, I have met a number of businesses in
the Meon Valley whose growth is being held back by poor internet
connectivity. What funding exists to help businesses in rural
areas to boost their productivity and growth by improving their
broadband? [900752]
My hon. Friend is right to raise this matter. The Government have
already put in place the gigabit broadband voucher scheme and the
rural gigabit connectivity scheme, which is available to small
and medium-sized enterprises and gives support of up to £3,500
per company. She will also be pleased to know that the Government
have committed £5 billion to invest in new infrastructure to
ensure that every part of our country has the best possible
broadband.
(Warwick and Leamington)
(Lab)
T8. Will the Chancellor ensure, in the Budget in March, that the
automotive manufacturing sector gets the support it requires? He
will know that there was a decline of 14% in our manufacturing
production last year, which represents a big hit to the Treasury.
Will he put in place the support to ensure a transition from
fossil fuels, so that we can still produce vehicles such as
diesel-powered units in good numbers while supporting the switch
to electric vehicles? [900756]
I thank the hon. Gentleman for his question. Tomorrow I am
attending a roundtable at 11 Downing Street with representatives
of the advanced manufacturing industry, and we are determined to
take their views into account as we make this transition. We are
supporting the industry through initiatives such as the Advanced
Propulsion Centre and the Faraday battery challenge, and we are
determined to ensure that the sector evolves in a way that boosts
our growth prospects as we decarbonise.
(Southport) (Con)
T5. Last year my town of Southport benefited from a £25 million
town deal. What more is my right hon. Friend doing to help other
towns up and down the country to level up? [900753]
The Chief Secretary to the Treasury ()
As the Chancellor said, the Government are committed to levelling
up across the country, and part of that involves our town deals
to help to revitalise our high streets. Also, as the Prime
Minister will say later, we have unveiled a £5 billion package to
improve local connectivity, including bus and cycle lanes, to
improve the quality of life and economic opportunity in local
towns.
(Manchester, Gorton) (Lab)
T9. In September last year, standing at the Dispatch Box the
Chancellor declared that austerity was at an end, but just last
month he demanded that each Department cut 5% of its
budget—hardly a glowing endorsement of the end of austerity. Will
the Chancellor now admit that the Government never had any
intention of ending austerity or easing the pain felt by millions
around the country? [900757]
With respect, I think the hon. Gentleman is confused between
cutting spending and tackling waste, and we know that the
previous Labour Government was good at neither of those, with
overspending and loads of waste. It is right that as a Government
we look carefully at every single pound that is spent and make
sure it is done so appropriately.
(East Hampshire)
(Con)
T6. Creditor enforcement action can greatly exacerbate the
problems that people going through mental health crises can
experience. May I commend the Chancellor and the Economic
Secretary for the breathing space initiative, which will help to
ease the pressure on those people and so many more? [900754]
The Economic Secretary to the Treasury ()
I thank my right hon. Friend for his comments, and I am very
pleased that the breathing space scheme is moving forward. We
published the impact assessment last week, and 700,000 people
will benefit from the scheme next year when it comes into force.
That number will rise to 1 million in the following year.
(Exeter) (Lab)
Depending on which briefing to today’s newspapers was accurate,
the infrastructure announcement will fund a grand total of either
250 or 1,000 miles of new designated cycleway. That is to be
compared with the 1,800 being provided by the Labour Mayor in
Manchester alone. How can a small city such as Exeter hope to get
any of the help, resources or the powers it needs to deliver on
the cycling infrastructure as it desperately wants to do?
I can tell the right hon. Gentleman that the announcement today
was of £5 billion of fresh funding for local transport—buses and
cycling. When it comes to cycling—something we all want made
easier to access for all our constituents—there will be 250 miles
of new dedicated cycle track.
(South Basildon and East
Thurrock) (Con)
T7. I know that the Government are committed to renewing and
improving our national infrastructure. However, those
improvements have to represent value for money. I therefore urge
the Chancellor to question both the cost and effectiveness of the
current proposals for a new lower Thames crossing and suggest
that he re-examines both the business case and the alternative
options. [900755]
I understand my hon. Friend’s concerns and he is right to raise
this. He will be pleased that Highways England is conducting a
supplementary consultation on the lower Thames crossing to make
sure that any benefits are maximised.
The consultation will close on 25 March, and I will then look at
it carefully. I would encourage him to have his say.
(Bath) (LD)
As a former teacher, I know that a good education is a key driver
to economic opportunities for young people, but sixth forms have
been heavily damaged by years of under-investment. Will the
Chancellor commit to implementing the recent recommendation from
the Education Committee and Ofsted to raise the rate of funding
per pupil to at least £4,760 in next month’s Budget?
Post-16 education and skills are a priority for the Chancellor
and the Government. I am pleased to say that the recent spending
round delivers a £400 million increase in funding for post-16
education, which makes it the fastest rise in a decade and means
that the per pupil base rate that the hon. Lady mentions will go
up faster than the schools total.
(Central Devon) (Con)
My right hon. Friend the Chancellor will know that I have written
to him about the legal duty that the OBR has to produce two
economic forecasts in each financial year, which of course has
been complicated by the cancellation of the last Budget. Can I
ask him to set out for the House the approach that he intends to
take and how he will avoid the necessity of having two forecasts
very close together saying essentially the same thing?
I congratulate my right hon. Friend on being elected as the Chair
of the Treasury Committee. I look forward to working with him and
to the scrutiny that he will provide, as he is doing right now.
The issue about the forecasts the OBR needs to provide is a live
one, and we will make sure that the OBR meets its statutory
requirements. I am pleased that the head of the OBR, Robert
Chote, has discussed it with my right hon. Friend, and I would be
happy to discuss it with him too.
(Belfast East) (DUP)
The Chancellor will know of the association between productivity,
economic opportunity and regional productivity. Noting that Flybe
is in the news again today, and knowing how important it is to
Belfast City airport in my constituency and regional hubs
throughout this United Kingdom, will he remember those three
principles as he charts a course to find a permanent solution for
that aviation company?
Of course I will keep that in mind. I assure the hon. Gentleman
that the Government are absolutely committed to spreading
opportunity throughout the country—throughout each of the nations
that make up the United Kingdom—and we want to look at all the
ways we can improve connectivity.
(Stoke-on-Trent Central)
(Con)
The Goodwin International training school in my constituency is
an exemplar of skills training by a successful modern
manufacturer with a world-class reputation. For less established
firms such as challenger small and medium-sized enterprises, what
support is on offer to level them up to Goodwin International
standards?
I had a good meeting yesterday with my hon. Friend and fellow
Stoke and north Staffordshire MPs. The Government are supporting
small firms across England through the network of 38 growth hubs,
one of which is based on Stoke-on-Trent. In our manifesto, we
announced our intention to create a national skills fund, which
will help to transform the lives of people who have not got on
the work ladder and lack qualifications, as well as people
looking to return to work or to upskill.
(Glenrothes) (SNP)
Every year Scotland exports a quarter of a billion pounds worth
of salmon to the European Union. This week, the Scottish Salmon
Producers’ Organisation expressed serious concern about the
continuing uncertainty of Brexit. What assessment has the
Chancellor of the Exchequer made of the impact on this vital
industry of the Chancellor of the Duchy Lancaster’s announcement
that “as friction-free as possible” trade with the EU means “not
friction-free at all”?
I assure the hon. Gentleman that we are working closely with the
fishing industry, including salmon producers, to make sure that
as we put in place our new free trade agreement, it will continue
to thrive.
