House of Commons
Tuesday 18 July 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Business before Questions
Middle Level Bill
That the promoters of the Middle Level Bill, which originated in this House in the previous Session on 24 January 2017, may have leave to proceed with the Bill in the current Session according to the provisions of Standing Order 188B (Revival of bills).— (The Chairman of Ways and Means.)
To be considered on Tuesday 5 September.
Richmond Burgage Pastures Bill [Lords]
Lords message (11 July) relating to the Bill considered.
That this House concurs with the Lords in their Resolution.— (The Chairman of Ways and Means.)
University of London Bill [Lords]
Lords message (11 July) relating to the Bill considered.
That this House concurs with the Lords in their Resolution.— (The Chairman of Ways and Means.)
Mouncher Investigation Report
That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that there be laid before this House a Return of a Paper, entitled Mouncher Investigation Report, dated 18 July 2017.—(Graham Stuart.)
Oral Answers to Questions
The Chancellor of the Exchequer was asked—
1. What fiscal steps he is taking to help increase the average level of wages paid by employers. (900546)
The key thing that we can do to increase productivity is to ensure that we invest in education and improve skills. We have more people going to university and doing apprenticeships, and we are investing in our rail and roads.
Unlike the Scottish Government, the UK Government voted for the public sector pay cut. Moreover, this Government’s so-called national living wage is not based on the cost of living. What new measures will this Government bring in to provide people with a wage that they can live on?
We have made sure that basic rate taxpayers are paying £1,000 less tax by raising the personal allowance. We are also introducing the national living wage, bringing in a £1,400 rise in take-home pay for the lowest earners.
The important thing for ensuring that people get a wage from an employer is to make sure that they have a job. Will the Chief Secretary to the Treasury welcome the record fall in unemployment to a 42-year low, particularly among young people, which is giving them much better opportunities in Britain than those available in most other European Union countries?
My right hon. Friend is right. We now have the lowest levels of unemployment since 1975, thanks to the economic policies pursued by this Government to improve skills and infrastructure, and to take sensible decisions on public sector pay.
As has been clearly demonstrated, the Government are celebrating falling unemployment without any critical analysis of the nature of the employment being created. Many residents of North West Durham are in work that exacerbates their financial difficulties because their pay is low, their terms and conditions are poor, and they do not have regular hours. Will the Minister update the House on the number of people who are currently working on zero-hours contracts? Will she also accept that looking at employment figures in a vacuum does nothing to help us to understand whether people are any more secure or any better off?
Fewer than 3% of people are on zero-hours contracts and, as Matthew Taylor recognised, many people want that flexibility so that they can combine their work with the other things in their lives. We need to ensure that people have the skills to get better jobs in the future, and that is exactly what this Government are investing in.
Will the Chief Secretary to the Treasury join me in welcoming the fact that 75% of the 2.8 million jobs created since 2010 are full-time jobs, and that zero-hours contracts account for just 3% of all jobs?
My hon. Friend is absolutely right. Is it not amazing that not one Labour Member has welcomed the fact that we have the lowest unemployment since 1975, or that we have lower youth unemployment? In fact, the Opposition model their policies on countries such as Greece, which has exceptionally high youth unemployment, and they take for granted the progress that we have made over the past seven years.
First, let me welcome any increase in jobs in our society, but when it comes to commenting on wages, does not the Chief Secretary to the Treasury agree that it ill becomes a multi-millionaire earning £145,000 a year, admittedly in a temporary job, and living in two grace-and-favour properties at the taxpayer’s expense to attack public sector workers—our hospital cleaners, nurses, teachers and firefighters—as being “overpaid”? Public sector workers’ pay has fallen on average by £4,000 in the first six years of this Government. One in five NHS staff are forced to take a second job, and teachers are facing a further cut to their salaries of £3,000 by 2020. Does she not think that the Chancellor should just do the right thing and apologise?
Yet again, the right hon. Gentleman is not giving the House the full picture of what is happening with public sector wages. Last year, teachers’ pay went up by 3.3%. More than half of nurses and other NHS workers saw a pay rise of over 3%, and the armed services saw a pay rise of 2.4%. The cleaner he talked about was employed not by the public sector but by Serco. The right hon. Gentleman needs to get his facts right.
That is true—the Government privatised the jobs.
I note that the Chief Secretary did not dispute the fact that the Chancellor said that staff were overpaid. The Chancellor tried to justify his attack on public sector workers by trying the classic divide and rule between public and private sector workers, citing public sector pensions. Is the Chief Secretary aware that those supposedly generous pensions across several professions pay on average the princely sum of just £5,000 a year, and that low pay has forced many public sector workers to opt out of their pension scheme? Eleven per cent. of those in the NHS have opted out; if that figure continues to rise, the whole scheme could be undermined. Will the Chief Secretary recognise the damage that the Chancellor is causing and lift the pay cap so that public sector staff can have some hope of a fair wage settlement—and, yes, a decent future pension?
The right hon. Gentleman still has not acknowledged the truth of the figures that I cited—the 3% pay rise for over half of nurses and the 3.3% rise for teachers. He simply will not look at the facts. The reality is that public sector workers are, rightly, paid in line with the private sector to allow the public and private sectors to flourish so that we can create wealth in this country. In addition, public sector workers have a 10% premium on their wages in pension contributions, and that is in the Office for Budget Responsibility report.
2. What progress is being made on reducing the national debt. (900547)
6. What progress is being made on reducing the national debt. (900551)
Debt has climbed steadily since 2009 as a result of the high levels of deficit. Since 2010, we have reduced the deficit by three quarters, so national debt will now peak at just under 90% of GDP this year. As the OBR’s “Fiscal risks report” of last week makes clear, that level of debt—a legacy of Labour’s recession—leaves us vulnerable to future shocks, which is why the Government have committed to eliminating the deficit and reducing the level of debt as a share of GDP. As a result of the actions taken to bring the public finances back under control, the OBR now forecasts that debt will start falling next year and will be below 80% of GDP by 2021-22.
Those figures are welcome, but will my right hon. Friend confirm that were the Government to pursue a policy of wiping all outstanding student debt, that would cost in excess of £100 billion and cause the national debt to surge? Will he also confirm that the biggest beneficiaries by far would be the top-earning graduates in the country?
My hon. Friend is absolutely right. He might have added that were anyone to suggest that they were able to do that, they could be accused of practising a deception on the people to whom they were offering that proposal. The cruelty of that would become apparent when it would have to be admitted that the proposal could not possibly be delivered. We face a debt challenge in this country, and we cannot borrow our way out of debt. The Opposition would do well to acknowledge that. Stronger growth and sound public finances are the only sustainable way to deliver better public services, higher real wages and increased living standards.
Does my right hon. Friend agree that last week’s OBR study shows that the debt level is 89% of GDP, highlighting that we must continue to be responsible with the public finances to weather any future uncertainty and to ensure that the Wiltshire economy continues to thrive?
My hon. Friend is right to express concern about the vulnerability created by the high level of debt. As the OBR made clear last week, that debt means that if the economy were to face an external shock, we would not be in a position to respond in the way that we would ideally like. That is why we have to get debt down, and the only way to get debt down is to get the deficit down. That means responsible fiscal policy, not the kind of rubbish we hear from Labour Front Benchers.
Was it not clear from the OBR report last week that it is a hard Brexit that presents the biggest threat to our national finances? Just a 0.1% decrease in productivity could lead, over 50 years, to a 50% increase in the ratio of debt to GDP. If the reports are true that the Chancellor is prepared to champion a longer transition from the single market for the UK, such welcome news might secure a lot of support on both sides of the House.
I welcome the hon. Gentleman’s contribution. On an issue as important to our nation’s future as our exit from the European Union, I welcome any opportunity to build consensus across the House and the nation. He is right to draw attention to what the OBR said. Even a very small decline in our productivity performance would add huge amounts to the debt and would reduce, by significant amounts, our projected growth in GDP. That is why it is so important that we now act responsibly in maintaining fiscal discipline and ensuring that we reduce our debt over time.
How is the Chancellor’s consensus building around the Cabinet table going? Will he update the House on his assessment of the trade deals that will be done after we leave the single market? He knows that Brexit is going to cause a fiscal shock. Is it true that he has challenged the Secretary of State for International Trade to disprove Treasury calculations that show there is no trade deal we can do after leaving the European Union that will make up for the huge loss of trade that Brexit will create?
The hon. Lady is assuming that we will lose trade with the European Union. It is clear to me that, all other things being equal, the ability to enter bilateral trade deals with third countries will be a positive for our economy. Of course, we also want to protect our trade with the European Union. My focus is on ensuring that we get a Brexit deal that protects our existing patterns of trade and commercial engagement with the European Union, as well as, over time, allowing us to explore new opportunities beyond the European Union.
The Chancellor will be aware that the current cost of Government borrowing is at a historical low, with gilt yields at 1%. Does he agree that, if markets lose confidence in our ability to live within our means, the cost of that borrowing would spiral, costing us billions of pounds? That would mean less to spend on our public services.
My hon. Friend is right to warn of the danger of a loss of market confidence in UK fiscal policy—I am looking very hard at the right hon. Member for Hayes and Harlington (John McDonnell). If markets lose confidence in UK fiscal policy, they will re-price lending to the United Kingdom. We already spend more every year on servicing our debt than on our armed forces and police services together. It would do a huge disservice to taxpayers in this country if we created conditions that would cause the cost of that debt to rise.
An enfeebled Chancellor has been forced to give a £1 billion bung to the Democratic Unionist party, to cough up £1.3 billion for a schools funding U-turn, to scurry around to find £2 billion to pay for his humiliating national insurance contributions debacle and to bail out his nightmare neighbour’s social care retreat with £2 billion. Why should this House believe a word, a promise, a claim or a target on reducing the debt?
I was glad to see the hon. Gentleman smiling by the end of that little rant. I do not know which planet he lives on, but I do not feel particularly enfeebled. I do not know what the Labour Treasury team does all day, but my right hon. Friend the Secretary of State for Education made it clear in her statement yesterday that she has put extra money into the frontline schools budget by reprioritising the wider education budget and finding efficiencies across her Department. That is the way to do a fiscally prudent protection of our public services.
Yes, the Government have taken it off some children and given it to others.
The national debt has risen by £707 billion since 2010 and is rising. It is barely a year since the Chancellor was given the keys to No. 11, and in that time public sector net debt has not been reduced. According to the Office for National Statistics and the OBR, it has increased by £122 billion. Given that lamentable record, has he been given notice of eviction by the woman in the bunker next door? Perhaps they may leave Downing Street in the same removal van.
The hon. Gentleman will know—I say that, but perhaps he will not—that public sector net debt will continue to grow until the deficit is eliminated. That is a simple arithmetic fact. His Government pushed our deficit up to almost 10% of GDP, and we have spent the past seven years getting it down to 2.4% of GDP. We will carry on getting the deficit down so that this country’s public finances get back into balance. We are a responsible Government, planning for Britain’s future.
Infrastructure: Private Sector Investment
3. What steps he is taking to incentivise private sector investment infrastructure projects in the nations and regions. (900548)
This Government are committed to supporting private investment, which finances about half our infrastructure. We have a trusted and stable regulatory system, and through the UK guarantees scheme we have supported projects worth more than £4 billion. We are also introducing innovative support such as the digital infrastructure investment fund, which will accelerate the roll-out of the ultrafast network.
The north Wales Mersey Dee region hosts world-beating businesses such as Kellogg’s, Airbus and JCB, but we need competitive infrastructure in order to ensure that we remain competitive. For that reason, and in the absence of the public sector investment we are crying out for, may we please have the ability to deliver private sector investment? What are the Government going to do to deliver roads and rail?
I simply do not recognise what the hon. Gentleman says; investment in our infrastructure is at a record high. We are seeing investment in roads, rail and south-east air capacity—in all modes of transport. The point is how we deliver that investment, and it is a combination of public and private. He is clearly right to champion the requirement for infrastructure in his area and to highlight its impact on the economy, but to say we are not doing anything is just factually wrong.
One disincentive for the private sector to invest in infrastructure is the delay that sometimes occurs in bringing major projects through to completion and commencement. The private sector is already committed to making a significant contribution to the funding package for Crossrail, but we have been waiting since March for a decision to take it forward. Will the Minister do all he can, across government, to speed up that regional and national infrastructure project?
I see significant merits in Crossrail 2, just as I see them in northern powerhouse rail and projects right across our country. I will of course take on board my hon. Friend’s point and relay it to the Transport Secretary.
Private investment thrives on stability, but we have a Cabinet in a state of anarchy when it comes to the terms of our exit from the European Union. Do the Government agree with Labour Members that an early announcement on transitional arrangements is therefore essential? If the Minister does agree with that, will he tell us the Government’s position on the latest date such arrangements could be announced—or are we more likely to see a transitional Chancellor than a transitional deal?
I am not going to speculate on the negotiations, as that would be way above my pay grade. I just refer the hon. Gentleman to the Chancellor’s answer a moment ago on the merits of a Brexit deal that secures our economic future.
Infrastructure: Government Investment
4. What assessment he has made of the effect of Government investment in infrastructure since 2010. (900549)
7. What assessment he has made of the effect of Government investment in infrastructure since 2010. (900552)
Infrastructure is at the heart of this Government’s economic strategy, and our investments will boost productivity and growth. Since 2010, more than a quarter of a trillion pounds has been invested by the public and private sectors, about 3,000 individual projects have been completed, we have almost completed Crossrail, and more than 4 million homes accessed superfast broadband for the first time.
Nearly 100 years ago, the world’s first radio broadcast was sent out from Britain—from Chelmsford. Does my hon. Friend agree that the digital infrastructure investment fund will give a massive boost to fibre and superfast broadband so that the UK can continue to lead the world in the digital and communications sectors?
I thank my hon. Friend for that question. I have just learned something about Chelmsford and its history in the development of our digital and radio infrastructure. The investment will boost Britain’s internet, making it more reliable and consistent and easier for people to live and work more flexibly, which will of course boost productivity right across the UK. Fibre is the technology of the future, just as radio was 100 years ago, and this fund will significantly assist small and medium-sized enterprises with capital to roll it out, with both Chelmsford and the UK benefiting.
Investment and infrastructure projects are absolutely key to keeping our nation moving. As the Minister knows, Chickenhall link road and Botley bypass in my constituency were helped to do just that and to improve the quality of life of my constituents. I welcome road funding through the national productivity investment fund. Will Ministers meet me to discuss the delivery of those projects, which will affect my constituency in Eastleigh?
My hon. Friend is a great champion for her constituency and for these projects. I have absolutely no doubt about the importance of them locally. If nothing else, we have met on the subject a number of times, and she is very tenacious. These projects not only open up opportunities for development, but help to relieve the congestion in the heart of her constituency. I will of course ensure that she meets the Transport team as soon as possible to progress those projects.
The electrification of the Great Western Railway between Paddington and Swansea was to provide huge economic benefits for businesses along that line. Unfortunately, the project has now overspent by £1.2 billion, and not a yard of the line has been electrified. What are the Government doing to ensure that projects such as this do not run over and waste taxpayers’ money in future?
The efficiency in the way that we deliver our infrastructure is a critical consideration when the Government are putting in so much money to transform our infrastructure. The points that the hon. Gentleman makes about Network Rail will have been heard by my hon. Friends in the Transport team, and I will highlight his comments to them.
Last month, the Institute for Government produced a report on infrastructure spending that said that decision makers do not know whether projects deliver value for money. It also believes that Parliament and the public are misinformed. What action are the Chancellor and his Department taking to ensure that future infrastructure spend delivers value for money and that costs do not spiral out of control like they have for Hinkley Point C?
I simply highlight the extremely rigorous business case process, which every single project has to go through before it receives approval. The idea that these schemes are not considered is just wrong.
The Scottish Government have committed to delivering 50,000 affordable homes by 2021. We recognise the calls that are being made by organisations such as Shelter Scotland and Big Issue, which believe in prioritising affordable housing. Why are the UK Government committing to build only 40,000 affordable homes in the same period?
Again, that is a question that will have to go to colleagues in another Department. I will make sure that they hear the hon. Lady’s comments.
5. What assessment he has made of how to balance the needs of (a) business and (b) the Exchequer in setting the corporation tax rate. (900550)
This Government believe in a tax regime that is fair and competitive. Since 2010, we have reduced the headline corporation tax rate from 28% to 19%, allowing companies, big and small, to invest in expanding their business, boost wages, create jobs and lower prices. Onshore corporation tax receipts have also increased by over 50% despite the rate being lowered.
Does the Minister agree that if we raise corporation tax, it is normally passed on by business to customers, and that if we lower it, we hope that prices will come down?
My hon. Friend is entirely right. It is important to remember that the burden of corporation tax does not just fall on shareholders. If we were to follow Labour’s policy of increasing corporation tax, we would see less investment, lower growth, lower productivity and, as the Institute for Fiscal Studies has said, lower wages and indeed higher prices.
Earlier, the Chancellor acknowledged that productivity is the key to economic growth and eliminating our public sector deficit. When manufacturing businesses invest, they often lose any benefits of corporation tax reduction because of higher business rates. That acts as a disincentive to invest and increase output and productivity. Why does he not cut business rates instead?
This Government have done a great deal in terms of providing business rate reliefs, which were announced in previous Budgets and are, I think, well known to the House. There will be more to come on that in the Finance Bill.
Will the Minister tell the House by how much the corporation tax take has gone up since the corporation tax rate was cut?
This is an important point. As the corporation tax rate has decreased to 19%—it will go down further to 17%—we have seen a 50% increase in the take, which is an amount in the order of £18 billion.
Most economists prioritise building business confidence and improving infrastructure and skills over cutting corporate tax rates. Is the Minister aware that lowering corporate tax rates now presents the appearance of Britain trying to undercut countries with which we need to agree a decent Brexit deal—at a time when businesses are not confident in the Government’s leadership, but are instead “aghast” and “confused” at their approach to Brexit?
We have seen a huge increase in employment in this country to a record level, and a record drop in unemployment to the lowest level since the mid-1970s. A lot of that has been driven by business. If the hon. Lady is seriously suggesting that the recipe for increasing the confidence of business is putting up its corporation tax to 26%, she has, I am afraid, missed the point.
8. What assessment he has made of recent trends in economic growth. (900553)
13. What assessment he has made of recent trends in economic growth. (900558)
Short-term indicators of growth are volatile. Quarterly growth was 0.2% in the first quarter of this year, but this followed strong growth of 0.7% in the quarter before. The underlying economy is robust, thanks to record employment levels. Although a recent rise in inflation, caused mainly by the depreciation of sterling last year, may temporarily dampen consumer spending—today’s inflation figure for June is a little lower at 2.6%—there are signs from surveys of business that export orders and business investment intentions are up.
I call the Chair of the Select Committee on the Treasury, Nicky Morgan.
Thank you, Mr Speaker. Would the Chancellor not agree that a growing economy is necessary to pay for our essential public services? The Office for Budget Responsibility’s “Fiscal risks report”, which has already been referred to, says that
“governments should expect nasty fiscal surprises from time to time”—
I am not referring to the shadow Chancellor there—and “plan accordingly”, but this Government also have to manage the uncertainties posed by Brexit. Should not a responsible Government not worsen uncertainties and risks by the decisions that they take?
Let me first congratulate my right hon. Friend; it was remiss of me not to do so in my first answer. I very much welcome her to her role on the Treasury Committee, and I look forward to being grilled or toasted by her, or whatever the correct expression is. She is of course exactly right: the only way to build resilience into the economy is to have strong public finances, and the only way to have a sustainably growing standard of living is to have rising productivity over the medium and long term, and that is what the Government’s policy is focused towards.
These are obviously still worrying times for many in north-east Scotland, with the continued low oil price still causing concern, but does my right hon. Friend agree that the strength of the United Kingdom’s economy, now the second highest growing in the G7, has enabled this Government to provide over £2.6 billion of support to the industry, securing jobs in West Aberdeenshire and Kincardine?
Yes. The UK oil and gas sector has made a huge contribution to the UK economy, having paid over £330 billion in total in production taxes to date, and supporting over 300,000 jobs. In the next phase of the life of the North sea basin, as many fields come towards the end of their life, we are working with the industry to ensure that we extract every drop of oil and gas that it is economic to extract, that we enable decommissioning, and enable end-of-life fields to be operated in the most effective way.
17. Much of the growth is due to the fact that we are spending more on imports, due to the low cost of the pound. The latest figures from the Office for National Statistics reveal that our trade in goods deficit has risen by £2.6 billion over the past quarter and now stands at a staggering £34.4 billion. Does not the extra cost of imports have an impact on the cost of our exports and affect our productivity? (900562)
As I am sure the hon. Gentleman will know, the short-run effect of a depreciation in sterling would be expected to be a decline in our trade balance performance as we suck in more expensive imports, in sterling terms. But over time the economy will adjust—there are signs that this is happening now—with exporters increasing their output to take advantage of weaker sterling and their greater competitiveness in international markets, and indeed not just exporters, but those who would substitute imported products with domestically produced products, which is often the best way forward for smaller companies.
One of the ways of reducing the deficit is by increasing economic growth, rather than increasing taxes or reducing spending. What steps is the Chancellor taking to produce economic growth, and how are his efforts being affected by those who continually talk the economy down and predict dire effects from Brexit, even though their predictions to date have been proved wrong?
The hon. Gentleman is exactly right; those who talk the economy and its prospects down are not doing the country any favours. It is not about borrowing more or taxing more; it is about growing our economy faster and increasing productivity so that we can have sustainable jobs and economic growth that produces the taxation to support our public services as well as rising living standards for our population.
9. What progress is being made on reducing youth unemployment. (900554)
Youth unemployment is at a record low: 5.1% of 16 to 12-year-olds are unemployed or not in full-time education. That compares with 9.4% in 2009, under the previous Labour Government.
Although I welcome the record unemployment figures that the Minister has given this morning, youth unemployment is still higher in my constituency and in Scotland than the UK average, so will he work with me and others across the House to encourage more investment in my constituency and in Scotland as a whole?
I will be very happy to work with my hon. Friend, because we recognise that work is the best route out of poverty. Indeed, unemployed households are 13 times more likely to be in relative poverty than those with people in full-time work.
I understand what the Minister says about less unemployment, but my concern is that this is not just about employment, but about retention. Does he agree that now is the time for hard-working, tax-paying public sector workers to get the pay rise that they have earned, and that he should scrap the cap?
We can see the effects, were we to follow the hon. Lady’s policy, by looking at youth unemployment rates elsewhere in Europe. In Greece it is 45.9%, and even in France it is 22%. The best way of addressing poverty is by keeping young people in work.
18. Government investment in Cheltenham’s cyber-accelerator since 2015 is now yielding results, with numerous cyber start-ups benefiting from local mentoring from experts at GCHQ. Does my hon. Friend agree that mobilising the UK’s sovereign expertise in areas such as cyber boosts jobs for young people and opportunity in places such as Cheltenham? (900563)
The GCHQ cyber-accelerator in Cheltenham is part of the Government’s £1.9 billion cyber-security strategy. It allows business start-ups to gain access to GCHQ’s world-class personnel and expertise, and the accelerator helps these businesses to expand, contributing to jobs and opportunities, including in Cheltenham, and it makes the UK a safer place online. I know that my hon. Friend has worked very hard on this for a considerable period of time. He makes an important point as he speaks up for his constituency, and how it is leading in the UK and across the world.
How does the Minister expect to reduce youth unemployment, given the further education budget cuts across the country, particularly in Coventry, where the budget has been cut by 27%?
Actually, we are seeing record numbers of people, in particular disadvantaged students, going to university. The situation will not be helped if people are conned with the idea that student debts will be written off.
Well, that was a first in this place, certainly during my time in the Chair: I have never known a ministerial swap to take place mid-answer. I assume that it was inadvertent; the Exchequer Secretary to the Treasury is nothing if not immaculate in his parliamentary manners. I put it down to error. But I hope that the Ministers know their own identities. I would be worried for them if they did not.
10. What fiscal steps his Department is taking to incentivise businesses to invest in rooftop solar. (900555)
Immaculate parliamentary manners, but not immaculate parliamentary procedure—sorry about that, Mr Speaker; I thought we had moved on from that question.
Solar is a UK success story. In 2013, solar capacity was expected to reach between 10 and 12 GW by 2020; we now expect Government support to bring forward about 13 GW by then. Feed-in tariffs provide an incentive for businesses to invest in rooftop solar.
The sun might be going down on the Chancellor’s time at No.11, but it remains an important source of energy and income for 44,000 microgenerators, including schools and hospitals. But since April they have seen their business rates increase by up to 800%, in some cases. Some major deployers of the technology are now pulling out of the rooftop market. Will the Government reassess the business rate levy paid on rooftop solar, so that we can give real growth to this important environmental sector?
The Government are continuing to support the take-up of solar panels through business rates by maintaining the exemption for new installations of solar power generating less than 50 kilowatts of power; of course, we also have all the transitional relief schemes and the cut in business rates announced in the Budget last year, which cost nearly £9 billion. The Government have listened to the voice from solar. We are keen to see progress on solar, and these schemes will help that.
Will not the roll-out of solar panels be greatly helped by Brexit, when the very high tariffs imposed on cheaper Chinese photovoltaic cells are removed and we will no longer be protecting the inefficient German industry?
I thought my hon. Friend was going to say that the sun may be shining more brightly post-Brexit. We are very keen to see the progress of solar as well as all other renewables. We will have to see what happens with pricing, but the key thing is that we will be supporting solar, as it is a key part of our power mix for the future.
There was I thinking that the hon. Member for North East Somerset (Mr Rees-Mogg) was taking an interest in energy saving because he has six children. Apparently not.
Have not the Government actually cut support for solar because, together with new storage technologies, it threatens to become so successful that it would kill off any case for horrendously expensive nuclear?
The support for solar comes directly from people’s bills. When the costs of installation and generation come down, through efficiencies and economies of scale and production, so should support. We are taking steps to control the cost of support schemes and putting solar on the path to delivery without subsidy.
Tax Avoidance and Evasion
11. What plans he has to introduce measures to tackle tax avoidance and evasion carried out through non-domiciled status and offshore trusts. (900556)
The UK has effective legislation to tackle avoidance involving offshore structures and we have announced our intention to legislate further, making it harder for non-doms to avoid paying tax on funds withdrawn from trusts. I am also pleased to say that we have been at the forefront of international work that has seen 100 countries commit to exchange financial information automatically.
The Conservative manifesto said that the Government would
“take a more proactive approach to transparency”.
Does the Minister believe that enough is being done to tackle companies that promote tax-avoidance schemes, or is there still a tendency for the big four accountancy firms to regulate the big four, via the big four, in order to protect the big four?
The hon. Lady asks if enough is being done to clamp down on tax avoidance. I can assure her that it certainly is. Since 2010, we have raised £160 billion by way of clamping down on exactly those behaviours. In the forthcoming Finance Bill there will be further measures to make sure that over the scorecard period we are bringing in between £7 billion and £8 billion in addition, in corporate tax avoidance measures.
Will the Minister confirm that due to steps taken by this Government, the top 1% of people now pay 27% of income tax, and that that is a higher proportion than under the previous Labour Government?
My hon. Friend is entirely right. The Labour party would constantly have us believe that somehow we are being soft on the wealthy and hard on the less well-off when the precise opposite is true. The top 1% pay over 27% of tax, and the wealthiest 3,000 people in our country pay as much as the poorest 9 million. Under Labour, the poor paid more tax relative to the wealthy, not less. No wonder that under our policies income inequality is at a 30-year low.
Income Tax/National Insurance
12. If he will make an assessment of the potential merits of merging income tax and national insurance. (900557)
The Government are committed to simplifying the tax system. In 2015, we asked the Office of Tax Simplification to provide an independent assessment of the alignment of income tax and national insurance contributions. We have already taken action in a number of places highlighted by the report. However, alignment now would cause significant upheaval for millions. Now is not the right time for further reform in this area.
I welcome my right hon. Friend to his new ministerial role. Last year the Office of Tax Simplification said that bringing national insurance and income tax closer together would create a simpler and fairer system for business and taxpayers. As national insurance and income tax revenues go into the same pot, would it not be simpler and clearer to merge the two and have one single income tax?
As I said, we recognise the value of merging national insurance and income tax where that is practical and achievable, and there are some measures coming up in the Bills in the autumn that will address that in certain circumstances, but to do it right across the piece at this stage is perhaps a long-term aspiration rather than one we will be addressing in the short term.
The Minister will know that as people go into the higher tax threshold they stop paying more national insurance, so would one of the impacts of merging the two be to reveal that the British tax system is not as progressive as people think, and make the case for those with the broadest shoulders to pay more?
The hon. Gentleman needs to recognise that national insurance and income tax function in different ways and have different roles in the tax system. We have one of the most progressive tax systems in the entire country. If we look at, for example, those earning above—[Interruption.] Well, by raising the personal tax allowance we have taken 3 million to 4 million people out of income tax altogether. For those earning over £100,000, where we removed the allowance, that, plus national insurance, means that the marginal rates are up to 62% at that level of income.
Public Sector Pay
14. What assessment he has made of trends in the level of public sector pay since 2010; and if he will make a statement. (900559)
We hugely value the work of public servants—teachers, police and nurses. That is why they are paid in line with the private sector, and, in addition, receive a 10% increment, on average, for their pensions.
We all agree that MPs’ pay recommendations are decided independently and go through automatically. However, other public sector pay review bodies take into account Treasury submissions but then find that their recommendations are vetoed by Ministers. If it is good enough for Members of Parliament, why is it not good enough for nurses, the armed forces, firefighters and teachers?
We do take notice of what the independent pay review bodies say. We have just approved the recommendations of the teachers pay review body and of the nurses pay review body. Listening to their recommendations, the pay review body for the NHS said:
“We do not see significant short-term nationwide recruitment and retention issues that are linked to pay.”
We followed that advice and gave the pay accordingly.
Increases in the tax-free personal allowance since 2010 have put £1,000 into the pocket of each basic rate taxpayer, including those who work across the public sector. Will the Chief Secretary continue to help public sector workers to keep the money they earn, through lower taxes?
My hon. Friend is absolutely right. The worst thing that we could do is to support the Labour party’s policies, which would, according to the Institute for Fiscal Studies, lead to the highest levels of taxation in peacetime history.
19. I think the Treasury response today to the questions about the 1% pay cap are profoundly disappointing. This is the single biggest thing ensuring that inflation erodes living standards. It is impoverishing workers, and it is driving up consumer debt. When will the Treasury agree with the Foreign Secretary that the time has come to end this cap? (900564)
I point out to the hon. Gentleman that, in fact, teachers have seen a 3% pay rise, many nurses get progression pay and people in the armed forces get an X-factor supplement that is worth 2.4% a year. Their salaries are in line with private sector salaries. It would be wrong to have a significant differential between the public and private sectors, because we need businesses to thrive in addition to having well-funded public services.
Time is against us, but I want to hear a couple more of the Order Paper questions.
Government Investment in Skills
15. What discussions he has had with the Secretary of State for Education on the effect of Government investment in skills since 2010. (900560)
Treasury Ministers have engaged on a regular basis with the Secretary of State for Education. We will double spending on apprenticeships over the decade to 2020, allowing 3 million apprenticeship starts in England by 2020 and giving people the best start in their career.
Since 2010, the substantial increase in apprenticeships has helped many young people into work. Stansted airport in my constituency is a great provider of apprenticeships, and its employment academy placed 700 people into work in the last year alone. Does the Minister agree that apprenticeships have contributed to the record low level of youth unemployment?
I very much agree with my hon. Friend. In fact, there are 55,000 fewer young people unemployed than there were a year ago, thanks in large part to the investment that this Government are putting into apprenticeships.
Is the Minister aware that if we are going to do anything about skills or productivity in our country and our communities, we have got to look to local further education colleges? Will he support, with money, resources and leadership, the introduction of a practical maths course to help young people who are waiting in colleges up and down the country, struggling to get apprenticeships? Will he talk to the Education Secretary about doing that, to get these young people on their way?
The hon. Gentleman will welcome the Government’s record investment of £500 million in T-levels, to tackle exactly the issue that he has raised in technical education. The Government’s commitment can also be seen in apprenticeships. Whereas under the last Labour Government there were just 280,000 apprenticeship starts, there were more than half a million last year under this Government.
Corporation Tax: Receipts
16. What effect the reduction in corporation tax rates has had on receipts from that tax. (900561)
Since 2010 the headline corporation tax rate has been cut from 28% to 19%. Despite that, onshore corporation tax receipts have increased by more than 50%, from £36.2 billion in 2010-11 to £55.1 billion in 2016-17.
According to KPMG, we have the second-most competitive tax regime anywhere in the G7. Does my hon. Friend agree that that encourages businesses to locate here and boosts our tax receipts?
My hon. Friend is entirely right. The OECD has made it very clear that corporation tax increases are the most harmful tax increases for economic growth. By keeping business taxes down, in 2015-16 we saw a record number of inward investment projects creating more than 1,600 jobs per week.
T1. If he will make a statement on his departmental responsibilities.
My priority is to ensure that the economy remains resilient as we negotiate our exit from the European Union. That means building on this Government’s achievements in reducing the deficit by two thirds, delivering record levels of employment and getting unemployment down to the lowest rate since the mid-1970s, while continuing to tackle the long-term challenge of productivity enhancement and making steady progress towards balancing the budget
I thank my right hon. Friend for that reply. Raising the personal tax allowance has been a key achievement of this Government. What recent assessment has he made of the number of my Hazel Grove constituents who have benefited from that policy?
I agree with my hon. Friend. The UK will have increased the tax-free personal allowance by over 90% compared with 2010, completing a decade of sustained tax cuts for working people. Over 31 million taxpayers will pay less tax in 2017-18, including 3 million taxpayers in the north-west. Since 2010, more than 4 million taxpayers have been taken out of income tax altogether.
Personal contract purchase plans for financing cars have gone up by 394% in the past five years, and the Governor of the Bank of England has said that we are failing to learn the lessons of the past when it comes to easy credit. What action is the Chancellor taking to ensure that lending is affordable and does not pose a risk to the wider economy?
May I first congratulate the hon. Lady on her appointment as Chair of the Business, Energy and Industrial Strategy Committee? As she will be aware from her Bank of England days, this is a matter for the Financial Policy Committee. Indeed, the FPC noted in its recent report that consumer credit is growing at a lower rate than it was under the previous Labour Government, but loss rates on lending remain low, as they are at present.
T2. My right hon. Friend the Chancellor will know from his time in the Foreign Office that one of the great strengths of our great kingdom is the perception of fairness we enjoy around the world. Will he talk a little about fairness in financial transactions, as the hidden taxes imposed by many companies on investment are grossly unfair on those who are saving in pensions for the future? (900537)
There is a theme here, because I should congratulate my hon. Friend on his election as Chair of the Foreign Affairs Committee. The Government are committed to the principles of transparency. He will have noted the recent Financial Conduct Authority report on the asset management market study. Indeed, we are seeing technology—in particular, through FinTech—driving the sort of transparency to which he refers.
T9. As chair of the all-party group on refugees, I am told by refugees that they are desperate to work once they have achieved such status, but are hindered by various fixable problems in the system. Will the Minister tell us what the Government are doing to make it easier for refugees to have bank accounts? (900544)
The hon. Lady will be aware that when the Home Office grants refugee status, it includes the biometric residence permit as proof of the holder’s right to stay, but I am very happy to discuss with the hon. Lady any further measures that she feels would be helpful.
T3. To promote the drive towards world free trade, will the Chancellor of the Exchequer assure the House that he is absolutely, personally and enthusiastically committed to following our manifesto commitment to leave not just the EU at the end of 2019, but the single market and the customs union? (900538)
Yes, I have made it clear on many occasions that when we leave the European Union on 29 March 2019, we will also leave the single market and the customs union. Those are matters of legal necessity. My focus is on ensuring that thereafter we put in place the closest and deepest possible partnership with our European neighbours that will allow us to continue the patterns of trade and business, patterns of security co-operation and patterns of educational exchange and scientific and research collaboration that we enjoy now. That is the best way to protect Britain’s prosperity.
Unsecured borrowing has rocketed, and lenders warn that default rates on credit cards and other products this summer will be at their highest level at any point since the height of the financial crisis. Instead of simply passing the buck to the Financial Policy Committee, what are the Government going to do in public policy to alleviate the serious risk of a household debt crisis?
The hon. Gentleman misstates the position. It is an independent responsibility of the Bank of England to address that—[Interruption.] It is. It is of course an area where there will always be frequent discussions with the Treasury, but it is a Bank of England matter.
T4. The UK Government have a strong record of supporting Scottish businesses, and the British Business Bank has provided nearly £1.5 million of support to small businesses in East Renfrewshire. However, many businesses in my constituency are disadvantaged compared with competitors and counterparts in England due to the Scottish Government’s approach to business rates. Will my right hon. Friend join me in calling for the Scottish Government to reverse their decision to double the large business supplement, restore rates parity on both sides of the border and allow Scottish businesses to compete on a level playing field? (900539)
My hon. Friend is entirely right. The large business supplement is a devolved tax matter and the supplement in Scotland is double that in England. The consequences were best summed up by Liz Cameron, the chief executive officer of the Scottish Chambers of Commerce:
“Here in Scotland, we must ensure that we are seen to be the best place in the UK to do business and that will require a fundamental reassessment by the Scottish Government of its tax policies.”
The Chancellor will know from his own officials’ analysis that the difference between staying in the European economic area and a Canadian-type deal, which is essentially what the Government are now aiming for, is a hit to GDP of £16 billion, which is equivalent to a 4p rise in the basic rate of income tax. How can it not be right to stay in the EEA, at least for transition?
The hon. Lady is now asking a different question. The Prime Minister has been very clear that Britain is a very large economy in relation to our European neighbours and we would expect to have a bespoke arrangement with the European Union as our long-term future status quo, and indeed a bespoke arrangement for any interim period that is agreed. The hon. Lady is quite right that as we go forward with this process, we need to deliver on our commitment to leave the European, but to do so in a way that protects the British economy, protects British jobs and protects Britain’s prosperity, and that is what we will do.
T5. Will my right hon. Friend, for the benefit of the House, confirm the cost to the economy of cancelling student debt, say whether that is affordable and explain what effect it would have on the work we have done to reduce the deficit? (900540)
As the Labour party admits, cancelling student debt would cost £100 billion. The Opposition made that reckless promise, which would see the debt soar, during the election campaign, but now they say it is just an “ambition”. Are they going to say sorry to the people they made their promise to, and are they going to say sorry to the British public for threatening to bankrupt the economy?
Further to the questions asked by my hon. Friends the Members for Wakefield (Mary Creagh) and for Lewisham East (Heidi Alexander), will the Chancellor confirm, as he failed to do before, that the cost to us of Brexit will be as described by my hon. Friends some moments ago?
The hon. Lady, I think, knows that there can be no definitive answer to that question. We do not yet know what the form of our agreement with the European Union will be and we do not yet know what arrangements will be in place for any kind of interim or transition period, so she is speculating. What I can tell her is that the Government are 100% focused on getting the best deal for Britain and delivering it in a way that protects British business and British jobs.
T6. Several of my Beckenham constituents have suggested that the winter fuel allowance might be a taxable benefit. Is that being considered? (900541)
We have no plans to tax the winter fuel allowance.
One of the best boosts to economic growth is Government infrastructure spending, so will the Chancellor look down the back of the sofa where he found the £1 billion for the deal with the Democratic Unionist party and find more change to sign the Edinburgh city growth deal?
At the autumn statement, I made a conscious decision to borrow an additional £23 billion for investment in economically productive infrastructure projects—a conscious decision to address one of the challenges we face in improving Britain’s productivity. The Government will continue to combine a prudent fiscal approach with investment in our future through productivity-raising measures.
T7. The new Conservative Mayor of the Tees Valley, Ben Houchen, is setting up the first mayoral development corporation outside London on the former SSI site in Redcar. The regeneration of the site and the attraction of inward investment are obviously vital. Will my hon. Friend work with me and the Mayor to deliver the best outcome for the site and the local economy? (900542)
The South Tees Site Company is currently undertaking ground investigations to assess the levels of any contamination on the SSI site. The mayoral development corporation is leading on the development of plans for the future of the site. I look forward to working with my hon. Friend, the Mayor of the Tees Valley and others to promote the economy of the area.
In the Budget, the Chancellor promised a consultation on business rates, but we have not yet seen that. Businesses in York are really struggling and some are leaving the city because of the astronomical business rates. When will we have that consultation—what is the date?
We have to deal with two issues. One is the process by which we uprate business rates, and we all saw earlier this year that long periods followed by dramatic revision are not good for anyone. They cause disruption to business, so we are looking at how we can smooth the process. Secondly, we need to look more broadly at the way in which we address the perceived unfairness that companies that operate in bricks and mortar are effectively treated differently from companies that do not. That is not an easy challenge, because many of the digital companies operate internationally and it requires international co-operation.
The consultation that the hon. Lady asks for will be issued by the Department for Communities and Local Government and I will pass on to the Secretary of State her concerns about the date.
T8. Noting that the unemployment rate is at a 42-year low, may I inquire of my right hon. Friend what the effect has been on average personal incomes for workers in Ayr, Carrick and Cumnock—and, indeed, the rest of the UK—of increases in the minimum wage and the national living wage? (900543)
The increase in the national living wage to £7.50 an hour means that a full-time worker on minimum wages has had a pay rise of £2,800 since 2010. More than 150,000 low-wage workers in Scotland are benefiting from that extra money.
The Tyne and Wear Metro is in urgent need of investment if we are to see the new rolling stock rolled out by 2021. What conversations has the Chancellor had with the Transport Secretary about funding that vital piece of infrastructure for the north-east?
As the hon. Lady may know, I take a clear view about the confidentiality of conversations between Cabinet Ministers—[Laughter.] While I have had many conversations with my right hon. Friend the Secretary of State for Transport, I make it a rule that it is for departmental Secretaries of State to make announcements when appropriate.
Does my right hon. Friend agree that lowering corporation tax to 19% has incentivised business investment in North Warwickshire and Bedworth by companies such as Aldi, which has its headquarters there, and throughout the UK?
My hon. Friend is right, and he is rightly a champion of business in his constituency. There is no doubt that lower taxes create wealth and in turn pay for the public services that we all desire—contrary to the party opposite. I share one exchange with the House—when my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) asked the shadow Chief Secretary if he was
“aware that tax as a percentage of GDP is going to be at its highest level since Harold Wilson was Prime Minister?”,
his response was:
“Let me put it like this: if we had a Labour Government, the percentage would be even higher.”—[Official Report, 18 April 2017; Vol. 624, c. 579.]
The TUC estimates that nurses, firefighters and border guards face losing more than £2,500 in real terms by 2020. For ambulance drivers, who earn significantly below the UK average wage, the figure is more than £1,800. Does the Minister agree that it is about time that we gave hard-working public sector workers the pay rise they deserve?
The hon. Lady should be aware that more than half of nurses and NHS workers saw a 3% pay rise last year. She needs to check her facts.
T10. Last night, I met a major financial institution. Does my hon. Friend agree that for London to retain its place as the leading financial centre we need a regulatory regime based on mutual recognition and an early-agreed transitional phase to provide certainty? (900545)
My hon. Friend rightly champions that key sector which provides £71 billion of tax to fund public services. It is in the interests of the UK and the EU to avoid fragmentation because that will increase costs, and the Prime Minister has made it clear that we are ambitious, in terms of the trade deal that we reach with the EU, to come to an arrangement that delivers regulatory equivalence.
Does the Chancellor accept that the confusion and conflicting ambitions of the Government’s policy on Brexit are already having an impact on investment? In the long run, that will be massively damaging to the economic prospects of this country.
No, I do not accept that. However, I readily agree with the hon. Gentleman that, as I have said many times in the Chamber, the process of negotiating our exit from the European Union and then executing that exit is bound to create uncertainty, and uncertainty is always unwelcomed by business. The challenge for us is to secure as much certainty as possible as early as possible for business, and that is our focus.
On a point of order, Mr Speaker.
I am advised that the point of order flows from Treasury questions, and I will therefore take it, but if it turns out to be just a continuation of the debate, I will be pretty intolerant of it; so I hope it is pithy and something approaching a genuine point of order.
Thank you, Mr Speaker. I very much appreciate your taking my point of order.
During Treasury questions, I asked the Exchequer Secretary to the Treasury, the hon. Member for Harrogate and Knaresborough (Andrew Jones), a question that specifically concerned an announcement in the Chancellor’s autumn statement. He did not answer it, saying that it was not within the remit of his Department. May I ask for your guidance, Mr Speaker? Whom should I ask questions about Treasury documents, if not Treasury Ministers?
If memory serves me correctly, the Minister indicated that he would pass the matter on to the relevant departmental Minister. These are matters not of precise fact but of judgment, and also of some discretion so far as the Minister answering questions is concerned. Of course, when the Chancellor delivers either his Budget or an autumn statement, he inevitably makes announcements that concern expenditure covering all sorts of different Government Departments. If subsequently a Treasury Minister is asked a question relating to expenditure in a particular area to which, because of his or her natural self-effacement and modesty—in the case of the hon. Member for Harrogate and Knaresborough—he feels that another Minister would be better equipped to provide an informative answer, there is nothing disorderly about that. It may be disquieting for the hon. Lady, but that is not the same as the Minister’s behaviour being disorderly. I hope the hon. Lady will accept that for now—and I see that the Minister is beaming with contentment, although it has to be said that there is nothing new there.
(Urgent Question) To ask the Secretary of State for Education to make a statement on the process for applying for free childcare hours from September 2017.
Thank you, Mr Speaker, for allowing the urgent question. It gives me an opportunity to highlight the Government’s determination to invest a record amount in childcare, supporting early education and helping parents financially. That amount will total £6 billion annually by 2020.
My Department is committed to ensuring that three and four-year-olds have access to free early education. All parents, regardless of income and employment status, are entitled to 15 hours of free early education for their three and four-year-olds, and for parents who are working we are providing access to an additional 15 hours of free childcare from September 2017. Parents who want to take up 30 hours of free childcare can apply through the digital childcare service. They can access the application via the Childcare Choices website, which provides information on all the Government’s childcare offers. The application process takes about 20 minutes. I have recently had a walk-through of the service myself; it is straightforward, and the format will be very familiar to parents who have used other Government digital services.
The childcare service is a complex IT system, which checks parents’ eligibility in real time by interfacing with other Government IT systems. The vast majority of parents will receive an instant eligibility response, but there will be a delay for some parents whose eligibility is not immediately clear—for example, for some self-employed people. The service has also experienced technical issues which have meant that it has been unavailable to parents on a small number of occasions. Her Majesty’s Revenue and Customs, which has developed the service, has been working hard to resolve those issues, and as a result the customer experience has improved.
The application has been open to the parents of under-fours since 21 April, and today my Treasury colleagues will make a written ministerial statement informing the House that the service has been further rolled out to the parents of under-fives, the so-called summer babies. Parents whose application is successful will receive a 30 hours eligibility code to take to their provider in order to claim their childcare place. As of today, more than 145,000 codes have been generated from successful applications. That is an increase of almost 5,000 codes since Friday 14 July and an increase of almost 25,000 since Friday 7 July. Increasing numbers of parents are successfully applying. It is great news that so many families will benefit from 30 hours in September because, as we have seen from our early implementer and early roll-out areas, the support can make a positive difference to the lives of hard-working families.
Order. Before we proceed to the hon. Member for Oxford West and Abingdon (Layla Moran) and to subsequent questioners, I must make it clear that I granted the urgent question because of the narrow and specific focus on the issue of the accessibility, or otherwise, of the Government’s website. This is not an occasion for a general debate about childcare policy. If Members want just—this is not unknown in politics—to score political points and to ask rhetorical questions, that is not what this exchange is about. It will run for 20 minutes and it will focus on the particular issue that the hon. Lady identified in her application.
I thank the Minister for his response, but as some may be reading in their end-of-year reports due this week, “Good effort; just not good enough.” The process for applying for free childcare is confusing both for parents and nurseries. As one parent said to me:
“getting the code was the most complicated process that I have ever endured. I would imagine that many parents would give up!”
They explained that
“you get passed from pillar to post between different areas of the website, each asking you for a different password, sent to you by SMS or email. Is this really necessary?”
As Members will attest, setting up two-factor authentication on our phones was difficult enough, and we have a well-resourced IT department. Who is helping the parents at home who are juggling this with jobs and caring for their young children? As a result, parents have not been able to open accounts to pay their nursery, playgroup or pre-school. Even some of the providers, particularly in the voluntary sector, cannot register.
The Government’s roll-out of 30 hours of free childcare is welcome, but only if it is of high quality and if parents can access it readily. Therefore, I ask the Minister: why is the Department for Education website still sending parents a holding response when they finally submit an online application? How long is the Department taking to confirm eligibility? What proportion of children eligible for the free childcare have been able to access it? Moreover, with the end of the school term rapidly approaching, how can nurseries plan for the upcoming year if parents cannot provide them with their voucher details? What support can the Government provide to nurseries to plan and budget effectively for an as-yet-unknown number of children who will be joining them on 1 September? Finally, what will the Government do to review the matter and the accessibility of the online registration process so that this does not happen again next year?
The hon. Lady asks some reasonable questions. I reassure her that, at the moment, 2,850 parents are registering per weekday and we are on track to reach, we think, about 200,000 by the end of the month. I encourage parents to get on with it. We do not want everyone to leave it until 11.30 pm on 31 August. As I said, the vast majority of cases are processed fairly simply, but because we need to check that the person meets the eligibility criteria on income, sometimes there are complications. I have mentioned self-employed people and people who change jobs, so occasionally it is more complex. I reassure the hon. Lady on the point about people who cannot use the online system. We have an offline process for any parents who experience persistent technical difficulties. I encourage anyone who has those problems to take up the matter.
I congratulate the Minister on his new appointment. What resources are being given to those from disadvantaged backgrounds to ensure that they have access to the 30 hours of free childcare?
Obviously, disadvantaged children are eligible for free childcare at the age of two and that continues for 15 hours through to the age of four. That additional funding and that additional 15 hours are for people in work. Some of those people may be on low incomes. A person who is working 16 hours at the national minimum wage qualifies. I have already mentioned that there is an offline system for people who may have problems and who cannot use the online system because of sight or other difficulties. However, the evidence so far is that the applications are coming in. They are now being presented to their providers and they will come back to us via the local authorities. May I make the point that some local authorities have been a bit tardy in passing the codes back to us? If anyone goes back over the recess, do ask them whether they are getting on with it, because that is another area where we need to see some improvement.
Thank you, Mr Speaker, for granting this urgent question. What a shame it is that, when we could be weeks away from a great breakthrough for providers, parents and most importantly children, we are instead discussing a policy that is riddled with holes—and, my word, are there questions to answer!
Just yesterday the Minister’s colleagues in the Treasury admitted in response to one of my written questions:
“It is not possible to provide a definitive number of applications not completed due to technical issues”.
Will the Minister give us his estimate of just how many parents suffered these “technical issues”? What steps are being put in place to fix the system, and what guarantees can he make to parents that, as the August deadline approaches, the system will work for them?
How many calls has the hotline received? Of the 30,000 people who applied and were rejected, what were the reasons for those rejections and can the Minister guarantee that those rejections were correct and not due to system errors? What about the parents on zero-hours contracts who are simply unable to guarantee that they will work over the minimum weekly hours: how many of them will be refused the childcare they were promised?
Finally, as the Minister will be aware, there are huge problems with this offer and there are many other questions to answer. As the Minister likes to refer my written questions to those at the national provider, Childcare Works, with implementation weeks away will he accept my request to meet them as soon as possible?
In welcoming the hon. Lady to her place, I have to say she is very much not a glass half full person. This is a great childcare offer. Yesterday morning, I was in the city of York, one of the pilot areas, meeting providers and parents who were benefiting, and I heard from people who said, “This is a great offer. It means no longer do I have to pass my husband in the hallway as I go out to my evening job and he comes in from his daytime job.” We heard of eight people in York who are now accessing employment because of the childcare being available. So it is a great offer and I am very proud that it has been delivered. We have ironed out the glitches in the software, and people are registering; as I have said, we are on track for 200,000.
The hon. Lady asked how many people we expect to register, and the short answer is that we do not know, because it is a voluntary system to which people will opt in. Also, of course, there will be three tranches. It will not all happen with a big bang in September; there will be another tranche of parents who qualify in January and another tranche after Easter. It is great news for working families—something this Government are delivering on.
Given the amount of my time that was taken, the amount of time that my constituent had to give up, and indeed the amount of time given by the technical support people in the Minister’s Department, all as a consequence of the fact that my constituent had an apostrophe in her name, can the Minister speculate why on earth we were not told that there was a manual workaround?
I have made that clear today. There have been a number of outages, several of which were to fix some of the glitches to which my right hon. Friend draws attention. The most recent one was due to a power supply issue between 6 pm and 10.20 pm last night, 17 July. That has now been fixed and the system is up and running again.
I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing this urgent question, and given that this is largely a devolved matter, I will be brief.
Ensuring affordable, flexible and secure childcare is one of the best ways to narrow the gender pay gap, by helping parents back to work when it suits them, and also to prepare children best for school. In Scotland, the Scottish Government are trialling childcare funding following the child by investing £1 million to make sure that, when we expand free childcare to 1,140 hours, parents have the choice to decide what is best for them and for their children. We are also going further than the UK Government by helping the most vulnerable two-year-olds in Scotland, to ensure that all children can have the best start in life. That is quite a contrast to the issues being faced by parents south of the border. If disadvantaged parents are not able to apply for childcare by the deadline due to the Minister’s website problems, how will they will be supported thereafter?
I thank the hon. Gentleman for the party election broadcast on behalf of the Scottish National party. The website is up and running and, as I have said, 2,850 parents per day are registering and getting their confirmation codes; we encourage people to do so as soon as possible, rather than leave it to the last minute. Indeed, I am very pleased that we are now on track. Some 143,000 valid 30 hour contract codes have been generated and we are on track to reach our target of 200,000 by the end of next month.
As a mother with three children, I have been through a raft of different child support schemes. There were none initially, which is why I welcome the fact that this support is in place; we must not forget that. Obviously, it is essential that parents have confidence that they can apply. Will the Minister reassure those who are struggling—not just parents but nurseries; I understand the difficulties—that we will help them? I have met people from many nurseries in my constituency. We are relying on them to deliver this service, so can we have assurances that it will work?
That is why we ran the scheme through 12 development areas. Indeed, 15,000 children are already enjoying it, including those in the families I met in York yesterday. It really is a good offer. Of course there is flexibility in the system: one can use a childminder, a pre-school playgroup, or a formalised nursery setting and mix and match the hours. So it is a great opportunity. Indeed, the hours can be spread over the holidays; currently, 30 hours a week for 38 weeks are available, but that can be spread over the year for those who wish to cover the holidays as well.
The Minister says that 120,000 codes have now been issued and that he expects that to rise to 200,000 by the end of the month, but given that the Government’s own estimate of the number of eligible families is in excess of 390,000, by my maths that means that only just over a quarter of those eligible have now got their codes. Given that we had warning after warning from providers that the scheme would be unaffordable to them and that they worried about there being sufficient places, how are they supposed to plan for September when only just over a quarter of families have registered for this scheme to date?
I am afraid that the hon. Lady is making a fundamental error. The total number will come in three tranches: one in September, one in January and one after Easter, as children reach the eligible age. This will be an ongoing system, and therefore—[Interruption.] The children starting in September need to apply by the end of August. There is no rush for parents whose children turn three in time for starting in January. We are on track to deliver 200,000 by 1 September. Subsequent tranches of children will come in after Christmas and Easter.
A number of concerns have been raised about providers being able to deliver for the funding we have provided, and we have put additional funding in. I am pleased to say that in the city of York, where I was yesterday, despite the fact that some of the private sector providers expressed disquiet, 100% of providers are delivering on the scheme. Indeed, in contrast to the numbers projected, we have 117% delivery.
Dorset was one of the pilot areas for 30 hours of free childcare. Will my hon. Friend update the House on the performance of those pilots, specifically in relation to the online system?
Those in the pilots did not participate in the online system we have in place now; there was an all manually based system. I can assure the House, however, that 4,000 parents were involved in testing the service and valuable lessons have been learned from Dorset regarding the operation of the service and provision of free places.
In light of these additional difficulties in bringing in what is a very welcome policy, what additional support will the Government give to nurseries that are preparing to deliver the scheme? We need to make sure that the resources are there for delivery.
As I have said, we increased the funding to allow for it to be delivered; an average funding of £4.94 for each hour is now being provided. That was in direct response to the concerns of some providers about the level of funding, but I have to say that even the providers who said that the funding was not sufficient have now managed to deliver at this price. Indeed, the nursery I visited yesterday said it had surplus places before the pilot scheme was introduced, but is now full, which is great news for it in terms of its overall funding.
Small, community-led pre-schools, such as the one in Hedge End in my constituency, are not necessarily groups, and they are worried about the process for them and for local parents. Will my hon. Friend tell us what the Government have done to ensure that all early-years providers are able to deliver the 30 hours for those families and to retain the positivity around this programme?
Parents have a choice about where to deploy their 30 hours of care. It can be with a childminder or in a nursery school, but it can also be with one of the many excellent voluntary sector providers, including pre-school playgroups. My wife used to run a pre-school playgroup, so I have been briefed on this issue. It is vital that people have a choice about where to send their children that suits their lifestyle, their work and the logistics of getting their children to that setting.
The Minister will know that I was Chair of the then Children, Schools and Families Select Committee when the Labour Government set us on this path, and I am sure that most Labour Members will welcome this good news. I have a vested interest in this subject, having 10 grandchildren and, I hope, more to come. However, many people in my constituency are struggling with access and are not very computer literate. Will he consider enabling the National Day Nurseries Association, which is based in my constituency, and the other marvellous children’s charities to help by being the interlocutors between the Government and our constituents?
In the short time that I have had this portfolio, I have met a number of organisations and I particularly look forward to meeting the hon. Gentleman’s own locally based organisations. That is very much on my bucket list. We certainly wish to engage as widely as possible with representatives of providers and of the families who are benefiting from this programme. Also, I have to say that we could not deliver this £6 billion a year of funding without the successful economy that this Conservative Government are delivering.
As the parent of a one-year-old, I am very grateful for this scheme as I find my way through the challenges of parenthood. I am sure that many others will feel the same. Will the Minister please tell the House what testing was carried out prior to the launch of the system, and how many parents were involved?
As I have said, there were two aspects to the testing. We had pilot areas in which we tested the delivery, working with the providers, and that was very successful, particularly in the city of York and North Yorkshire, where I was yesterday. In relation to the system, we had 4,000 parents involved. Indeed, I had a run-through to demonstrate how the system works. However, there are sometimes complications when people change jobs or when self-employed people’s accounts have not been submitted. In such cases, the telephone service can be used as a back-up.
It is clearly important to resolve the problems as quickly as possible. My hon. Friend the Member for Oxford West and Abingdon (Layla Moran) asked a number of factual questions, along with some others, which the Minister has not been able to answer directly today. Will he write to all those who have participated in the urgent question by the end of business on Thursday, so that we may have a full understanding of the picture?
I will certainly be happy to give updates. As I have said, we have now passed 143,000 valid applications—not 120,000, as the hon. Member for Manchester Central (Lucy Powell) suggested earlier—and I would be more than happy to give the right hon. Gentleman ongoing updates on that.
I am grateful to the Minister and to colleagues. In a moment, I will call the hon. Member for Westmorland and Lonsdale (Tim Farron) to make an application for leave to propose a debate on a specific and important matter that should have urgent consideration under the terms of Standing Order No. 24. The hon. Gentleman has up to three minutes in which to make his application.
Unaccompanied Child Refugees
Application for emergency debate (Standing Order No. 24)
I seek leave to propose that the House debate a specific and important matter that should have urgent consideration—namely, the acceptance of unaccompanied asylum seeking children into the UK.
Baroness Williams revealed in a recent response to a question in the other place that under the Dubs scheme only 200 unaccompanied asylum seeking children had so far been transferred to the United Kingdom from mainland Europe. The Government stated before the general election that before closing the scheme they would take 480 children, which in itself was the cause of outrage to many of us who had championed the Save the Children campaign to give sanctuary to 3,000 children in the UK. The Government’s choice to take a figure as low as 480 was mean-spirited, blatantly politically motivated and not worthy of this House or this country—and yet the number of desperate children we have actually received is less than half that measly target.
The Government cannot use a lack of capacity or of resources as an excuse. Recent freedom of information requests have shown that local councils have voluntarily offered to accept 1,572 more children than they were supporting. Be it Syrian children, survivors of the Nazi death camps, Ugandan refugees or those fleeing genocide in the Balkans, this country’s values of openness and tolerance dictate that we have a moral duty and responsibility to be a land of sanctuary. Our history shows that we are stronger and more successful because of our willingness to take in desperate refugees, who go on to become proud Britons. So why do the Government seem committed to turning their back on the world?
Our actions in this House directly affect the lives of the many hundreds of children who have a legal right to come to the United Kingdom but who are currently scattered across Europe, scared and alone. I and many others feel strongly that this issue must be debated before the House rises for the summer recess. In the summer, migrants make more trips to Europe in unsuitable boats, and I fear that all over again we are likely to see more news of people drowning while trying desperately to reach safety. Put bluntly, by the time October comes around there will be many more children alone, orphaned and living a hand-to-mouth existence in continental Europe.
We must examine our consciences. The Government made an unambitious commitment that had to be dragged out of them. They then cancelled that agreement before managing to meet even half of its terms. I ask the House to take this opportunity to address this outrage and to help these desperate children.
The hon. Gentleman asks leave to propose a debate on a specific and important matter that should have urgent consideration—namely, the acceptance of unaccompanied child refugees into the UK. I have listened carefully to his application, and on this occasion I am not persuaded that the matter is proper to be discussed under Standing Order No. 24. Ordinarily, I am exhorted to say nothing more than that, but I will say to the hon. Gentleman that I am not insensitive to the strong concern that he and others have on this matter. There is a limitation on time—we do not have unlimited time between now and the recess—but if he wants to seek other opportunities to air his concerns on this matter tomorrow, on Thursday or indeed both— who knows?—he may be successful in his quest.
In a moment, I will call the shadow Education Secretary, the hon. Member for Ashton-under-Lyne (Angela Rayner), to make an application for leave to propose a debate on a specific and important matter that should have urgent consideration under the terms of Standing Order No. 24. The hon. Lady has up to three minutes in which to make such an application.
Application for emergency debate (Standing Order No. 24)
I seek leave to propose that the House debate a specific and important matter that should have urgent consideration—namely, the Government’s proposed increase in tuition fees with regard to the Higher Education (Basic Amount) (England) Regulations 2016, statutory instrument No. 1205, and the Higher Education (Higher Amount) (England) Regulations 2016, statutory instrument No. 1206.
On 30 March, the then Leader of the House—now the Justice Secretary—stood at the Dispatch Box and promised a debate and a vote on the Government’s plans to increase tuition fees. The debate was scheduled for 19 April, but on 18 April the Prime Minister announced her plan to go to the country in an early general election. That meant that the debate was cancelled. Oddly, the Government have been determined not to grant the House a vote on the matter since the election.
Since then, the shadow Leader of the House raised the issue at Business questions on 22 June and on 6 and 13 July. She finally received a letter from the Leader of the House stating that the Government currently have no plans to schedule these debates in Government time. What a contrast that was with the words of the Secretary of State for Exiting the European Union who said last week that
“if a statutory instrument is placed in front of the House of Commons, then the Commons decides if it debates or votes on it.”
A statutory instrument is indeed before the House, but we are not being allowed to decide whether to debate or vote on it. How can he expect the Opposition to trust the Government with the sweeping powers that he wants under the European Union (Withdrawal) Bill?
Only two weeks ago, the First Secretary of State called for a national debate on tuition fees and student debt, but that national debate will apparently not include this House. Universities and thousands of students across the country are now uncertain about the rate of tuition fees that can be charged. With neither Government nor Opposition time to debate the matter, we have no choice but to use Standing Order No. 24—so 109 days since it was first promised by Ministers I ask leave for an emergency debate on their plans to raise tuition fees.
The hon. Lady asks leaves to propose a debate on a specific and important matter that should have urgent consideration, namely the Government’s proposed increase in tuition fees with regard to the Higher Education (Basic Amount) (England) Regulations 2016 and the Higher Education (Higher Amount) (England) Regulations 2016. I have listened carefully to the application, and I am satisfied that the matter raised by the hon. Lady is proper to be discussed under Standing Order No. 24. Has the hon. Lady the leave of the House?
Application agreed to.
The hon. Lady has obtained the leave of the House. I can therefore advise colleagues that the debate will be held tomorrow, 19 July, as the first item of public business. It will last for up to three hours and arise on a motion that the House has considered the specified matter set out in the hon. Lady’s application.
Points of Order
On a point of order, Mr Speaker. The BBC is our public sector broadcaster and is paid for by all of us through the licence fee. It will announce tomorrow the details of presenters’ salaries over the threshold of £150,000. The campaign to get that transparency has gone on for around 10 years, and some of us have been heavily involved in it. The BBC initially avoided the matter and then dragged its feet before eventually agreeing to publish the information, which the general public, as its paymasters, have a right to see. However, the BBC is publishing said information the day before parliamentary scrutiny ends for the summer recess—tomorrow. Have you been informed by the Secretary of State for Digital, Culture, Media and Sport of her intention to come to the House to outline the unacceptable nature of the timing of the announcement?
I am grateful to the hon. Gentleman, both for his point of order and for his characteristic courtesy in giving me notice of his intention to raise it. The short answer on the last, key point in his remarks is that, no, I have received no indication from any Minister of an intention to make a statement. I understand the hon. Gentleman’s concern and appreciate that it may be shared by many Members. That said, it is not a point of order for the Chair. The decisions made on the timing of announcements or disclosures by the BBC do not fall within the aegis of the Speaker. It is also fair to say that, strictly speaking, those judgments do not to any significant extent fall within the responsibility of Ministers. Ministers can have views on such matters, which is perfectly proper, but they are not matters for ministerial decision.
The hon. Gentleman has succeeded in putting his concern on the record, and I feel sure that it will have been heard not only by the occupants of the Treasury Bench but by the broadcasters themselves. He is an assiduous denizen of this House, and I feel sure that he will be in his place tomorrow and, indeed, in all likelihood on Thursday. I dare say that he will want to get back to Northern Ireland at some point, but I am sure he will be in his place on Thursday and springing from it with a view to giving the House the benefit of his views in the summer Adjournment debate. That might be a suitable opportunity for him to expatiate further on this important matter.
On a point of order, Mr Speaker. I seek your guidance and advice. As you are aware, it is regular and customary for the Government to give a written response to Select Committee reports within two months of publication. The Foreign Affairs Committee published reports in March, in the previous Parliament, on Russia and Turkey. Given the topicality of the anniversary of the attempted coup in Turkey, I was hoping to read a Government response to the report on Turkey. I know we have had a general election and that the period of two months was not continuous, but the period between March and Parliament resuming is more than two months. I would therefore be grateful if you advised me on what I can do to ensure that the Foreign and Commonwealth Office provides the long-overdue responses to those Select Committee reports.
I am very sorry to disappoint the hon. Gentleman, whose interest in and knowledge of such matters are well known and respected throughout the House, but the short answer is that the best way to guarantee a timely—or at least less untimely—response to the Select Committee reports will be to reconstitute the Foreign Affairs Committee as soon as possible. He is absolutely right that there has been a long delay. Ministers can take the view that they are responding to a report from a Committee and that the Foreign Affairs Committee currently does not exist and needs to be reconstituted.
I think the hon. Gentleman might have been present when I volunteered some thoughts with some asperity on the merit of getting on with the reconstitution of Select Committees. Although the Chairs have been elected, I am saddened that members have not been elected across the House—it is a pity if some have not got round to doing that. Frankly, however, there is not much that I can do other than say that I am always looking out for the hon. Gentleman. If he bobs up and down with a view to raising the matter, I will try to accommodate him. [Interruption.] It is always a delight to hear the views of the hon. Member for Bassetlaw (John Mann), to which I have been accustomed for the past 30 years. It is always better when they are offered from him on his feet, rather than from his seat, but I heard him chuntering from a sedentary position.