House of Commons
Tuesday 29 January 2019
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Chancellor of the Exchequer was asked—
Economic Growth: Yorkshire
There are 200,000 more people in employment in Yorkshire and the Humber today than in 2010. Unemployment has fallen by over 45%, and it is currently the second fastest growing jobs market in the UK. Since 2010, nearly 70,000 more businesses have been created, and the region has seen growth of 21%.
In the light of figures produced by the Economic Statistics Centre of Excellence, which suggest that growth in Yorkshire and the Humber has been less than 1% since 2010, whereas it has been over 3% in London, is it not time for Ministers to start talking seriously to the 18 Conservative and Labour local authority leaders who advocate One Yorkshire devolution, with transitional arrangements in South Yorkshire and elsewhere?
My right hon. Friend the Secretary of State for Housing, Communities and Local Government is reviewing the proposals of the One Yorkshire consortium. It is our priority—I think it is a reasonable one—that the Sheffield city region and its mayor is taken forward and that the mayor is able to fully perform his functions on behalf of the people who elected him a year ago. We have said that the purpose of devolution is to create a mayoralty around a functioning economic geography. It is not clear that that case has yet been made by an historic county of the scale of Yorkshire, but we will continue to consider the proposals.
One scheme that is vital in my constituency for promoting economic growth is the Shipley eastern bypass. The Secretary of State for Transport has visited twice and made it clear that he supports the scheme and would like to ensure that it is implemented. Will the Treasury ensure that he has the funding to make the Shipley eastern bypass a reality?
My hon. Friend and I have discussed the Shipley eastern bypass on several occasions. We have put a record amount of money into our strategic roads network. By hypothecating vehicle excise duty, the amount of money available for road spend in the second road investment strategy period will be almost 175% of the previous period, which is a substantial increase in investment in our roads.
The Centre for Cities report published yesterday shows that there is low productivity in York but also serious levels of underemployment. What are the Government doing to address underemployment and ensure that we get the maximum benefit for our economy?
Through our productivity plan, we are investing more in the skills base in all parts of the country, whether that be through apprenticeships, the national retraining scheme or raising standards in our schools. We are also investing more in our infrastructure. Over the last four years, there has been a 50% increase in public investment in infrastructure in Yorkshire and the Humber compared with the last four years of the Labour Government. The hon. Lady and I met recently to discuss her plans in York for the high street and improving the city centre, which we wish to support.
Does my hon. Friend agree that well-run city regions are the key drivers of productivity and prosperity and that Yorkshire’s economy is best served by devolution to the city regions of Sheffield, Leeds, Hull and York?
We are seeing mayors across the country driving their regions’ economic strategy, including great mayors like Ben Houchen in the Tees Valley and Andy Street in the West Midlands. We want to see more mayors, but we have to be mindful of the original purpose of devolution, which, as my hon. Friend said, is the role of cities and their immediate hinterland in driving productivity and economic growth.
New Business Creation
The UK is one of the best places in the world to start a business, and a new business is being established every 75 seconds in this country. The Government champion entrepreneurship by keeping business taxes low and helping entrepreneurs to access the finance they need.
New and growing businesses in Colchester such as Ryza Media, Three Wise Monkeys, Heavenly Desserts and Beer Me Now are helping to drive our local economy. How will measures such as the start-up loans programme, cutting business rates by a third and entrepreneurs’ relief further encourage entrepreneurs in Colchester to thrive?
My hon. Friend has named some of the measures that we have recently brought forward to support entrepreneurship in all parts of the country. At the recent Budget, the Federation of Small Businesses declared it the most business-friendly Budget ever, and rightly so. We have extended the start-up loans scheme, helping an extra 10,000 entrepreneurs to get the capital they need, and with that—along with our reductions in business rates and with entrepreneurs’ relief, the seed enterprise investment scheme, the enterprise investment scheme and reductions in corporate taxes, including for small businesses—we are creating the most globally competitive tax regime to support those who create jobs and enterprise in our country.
Data suggest that new businesses struggle in areas where communities do not have free access to cash. As of this month, the mother town of the Potteries, Burslem—a town of 20,000 people—no longer has access to a free-to-use ATM. Will the Minister meet me to discuss how we can work together to fix this?
I would be very happy to meet the hon. Lady. We are continually pressing the Payment Systems Regulator and the LINK organisation, which manages the ATM network, to ensure a good supply of cash in all parts of the country. We recently issued a call for evidence at the Treasury to give greater consideration to how we can maintain that supply as we move to an increasingly cashless society and protect those who are vulnerable and harder to serve, perhaps including the hon. Lady’s constituents.
The Minister will know that Essex is the county of entrepreneurs. How are the Government supporting more small business creation, alongside new housing schemes such as the garden settlements that are proposed for the great county of Essex?
I concur with everything my right hon. Friend has said. This is of course a country of entrepreneurs. All of our most recent statistics have shown that the UK is attracting entrepreneurs from around the world. We are the third leading destination in the world, after the US and China, for inward investment. That is not happening by accident; it is happening as a result of the pro-business policies of this Government, creating the most globally competitive tax regime, and investing in our productivity.
The Government are making a range of plans to support businesses in the event of all Brexit outcomes. For example, Her Majesty’s Revenue and Customs is increasing its guidance to firms online and by writing to more than 140,000 businesses across the country to ensure that they make appropriate plans. As I have already described, in the Budget we made a whole range of moves to support small businesses across the country—business rates relief, the future high streets fund—all of which have been Barnetted. It is for the Scottish Government to come forward with their plans for how they intend to support small businesses; at the moment, there is only silence.
I note that “Barnett” has now become a verb, and we are grateful to the Minister for his ingenuity.
In its report on small business, the Business, Energy and Industrial Strategy Committee drew attention to the need for consistency of advice for small businesses and those starting small businesses. In Rugby, that is provided by the growth hub, as part of the local enterprise partnership. Does the Minister agree with me that it is important that these bodies are properly resourced?
We do agree with that. All the evidence suggests that small businesses would benefit from better quality advice across a range of areas. Recently in the Budget, we have supported extra funding for networks in order to bring businesses together, and we are working across Government to think about ways in which we can improve the quality of advice and increase competition within business advisory services.
The Minister should take some advice from someone who has been in the House a long time: bragging about being an “every 75 minutes” Minister is very dangerous. I have just checked and in Huddersfield it is cloudy but not cold, but the economic temperature is freezing: start-ups are not starting, the new creative businesses are putting everything on hold and until they have some reassurance about Brexit, they will not move.
If the hon. Gentleman wanted to give greater certainty to businesses in his constituency, he would support the deal. He did not do so in the recent vote, but I hope he will come forward and do so shortly. I would not be so negative about the business community and the state of the economy in Yorkshire. We have record levels of employment, the jobs market is the second best in the country and real wages are rising. In Yorkshire, real wages and household disposable income are rising above the national average.
Small and medium-sized businesses are the bedrock of Stirling’s economy and the engine of the UK economy. What is being done in practical terms to help those businesses find the funding that they need to scale up?
We have made a number of interventions in this space, because as my hon. Friend says, while the UK is generating record numbers of start-ups, there is evidence that we need to help businesses to scale up and achieve their full potential. We launched the patient capital initiative, and we put £2.5 billion behind the British Business Bank to help small businesses in all parts of the country, including Scotland, and it is making good progress.
I am pleased to let the Minister know that in the next financial year, 90% of businesses in Scotland will pay less in business rates than they would if they were elsewhere in the UK. Following on from the question from the hon. Member for Stirling (Stephen Kerr), it is important that new firms have access to banking and lending facilities. What is the Minister doing to encourage banks to lend to businesses?
We are taking a range of steps to ensure that banks are able to finance small businesses. For example, as I have just described, we are establishing the British Business Bank, which is supporting tens of thousands of businesses across the country, including many in Scotland, and helping to ensure that finance is available. The venture capital sector is vibrant and maturing in all parts of the country—not just the areas traditionally associated with venture capital, such as London, Oxford and Cambridge—and helping those businesses to scale up.
The news that Santander is to close 15 branches across Scotland will leave firms across the country without access to basic banking services. When did the Treasury become aware of that news, and what action has it taken to protect those services and those jobs in our local communities?
We have taken action already to ensure that banks, including Santander, work more closely with post offices, so that there are always banking services available in all parts of the country. We give post offices over £50 million in financial support a year to help keep branches open, particularly in rural and harder-to-serve communities.
Lowest Paid: Earnings
The national living wage was introduced by my predecessor. It will rise to £8.21 from April this year. In total, it will have delivered a pay rise of over £2,750 for a full-time minimum wage worker since its introduction in 2016. While we are proud of that achievement, my hon. Friend the Member for Chelmsford (Vicky Ford) will know that in the long term, sustainable pay growth relies on improving productivity. That is why we are investing heavily in infrastructure, and are delivering a national retraining scheme to ensure that people are equipped for the technology revolution ahead.
What steps are the Government taking to make sure that everyone, including those on the lowest incomes, has the opportunity to save for their future?
The Government are committed to supporting savers at all levels of income, and at all stages of life. In September 2018, we introduced Help to Save, which is targeted at people on low incomes, and which Martin Lewis of moneysavingexpert.com described as
“a very clever scheme”
“enables people possibly to have the best of both worlds”.
It pays a 50% bonus on savings of up to £50 made by working families on low incomes. We have 80,000 accounts open already, and we expect the numbers to rise substantially over the next few months.
My constituency has a quarter more businesses and 6,700 more people in work than in 2010, and Harborough district has seen the fastest growth in wages anywhere in the east midlands over the last five years, but we cannot rest on our laurels. To accommodate 230 more jobs, Harborough District Council is building a new “grow on space”. Will the Chancellor come and visit it once it is complete?
The sting was in the tale. I am delighted to welcome the new jobs that have been created in Harborough through the action of the council, no doubt with strong encouragement from my hon. Friend. The Government are keeping taxes low and are helping start-ups to access the support that they need. That is why 3.4 million new jobs and 1.2 million more businesses have been created since 2010. With regard to his generous invitation, as I visited his constituency and had the pleasure of seeing what was going on there only very recently, if he does not mind, I will offer it to one of my team.
Given that the Government’s own analysis shows that every region and every nation of the country will be poorer under any form of Brexit, does the Chancellor really believe that the lowest paid will be better off as a result of us leaving the EU?
The hon. Lady’s statistics are wrong. It is not right to say that every region will be worse off. Every region under every scenario will be better off. The UK economy will continue growing. [Interruption.] The UK economy will continue growing. There is no doubt, as the published cross-government analysis shows, that leaving with a deal will best protect the UK economy and will be in the interests of all our constituents. I urge the hon. Lady to get behind the deal.
Given what the Chancellor has said, why do large numbers of families in my constituency have to go to food banks? Many of them are on universal credit. Working families are having to use food banks in my constituency. What is he doing for them?
The measures we have taken to increase the national living wage, combined with the increases in the personal tax allowance, mean that a single person on national minimum wage will be £4,500 better off in terms of take-home pay than they would have been in 2010.
My hon. Friend is right and we are proud of that record. From 2015, 1.7 million of the lowest paid will be taken out of tax entirely and a typical basic rate taxpayer is £1,205 better off in terms of tax paid than in 2010-11. As I have just said, when we combine that with the changes to the national living wage, that is a £4,500 a year increase in take-home pay—8% in real terms, the largest increase across any part of the income distribution.
Westminster has repeatedly failed to support Scottish National party demands to introduce a real living wage, ban unpaid trial shifts and extend rights to those in the gig economy. If Westminster will not act, when will employment law be devolved to allow the SNP Scottish Government to boost the wages of the lowest paid in Scotland?
As I have just said twice, we have substantially increased the national living wage and reduced the amount of tax that people on low incomes are paying. With regard to the question on the gig economy, the hon. Gentleman will know that my right hon. Friend the Business Secretary is currently reviewing proposals for introducing additional employment protections to those in this sector of the economy.
Leaving the EU: No Deal
Last year, the Government published a comprehensive assessment of the impact of our departure from the European Union, covering four different scenarios and looking at the effect on GDP and GDP per capita on exports and imports. That analysis is available on gov.uk.
The British Retail Consortium estimates that if we leave the EU without a deal, new non-tariff barriers will add on average 29% to the cost of food imports from the EU, on top of new import duties on food. The Chancellor was surely right in his call to business leaders to argue for no deal to be taken off the table. Will he continue to press the Prime Minister to do so?
What we will continue is our extensive planning for the possibility of a no deal, day one exit to make sure that our ports are indeed flowing and goods are moving, including food. But the best way to ensure that we have the right conditions for UK consumers is to back the deal that has been negotiated with the European Union.
Will the Minister confirm that, in the event of a no-deal Brexit, we would immediately be able to eliminate VAT on domestic fuel and reduce tariffs on foods imported from outside the European Union to zero?
This country will achieve a range of additional flexibilities when we are outside the European Union. We will, of course, assess them all in due course, taking into account the fiscal costs of some of the measures that my hon. Friend has raised.
The simple reality of the situation that Parliament finds itself in is that, in the event that we do not conclude a deal successfully with the European Union, this country may well leave without a deal. I urge the hon. Lady, in order to address the concerns that she has rightly raised in this House, to get behind the deal.
Will the Minister confirm that the Government have no plans for any new non-tariff barriers and call out the British Retail Consortium’s recent “Project Fear” comments? Will he also confirm that it is within the Government’s power, after we leave, to reduce tariff barriers and tariffs on food and clothing?
My hon. Friend raises two issues. On non-tariff barriers, we have made it very clear that we will implement a solution in the event of no deal, for example, that will be as friction-free as possible. But there will be requirements in that scenario for us to handle pre-custom declarations and various checks, which will come with having a border under those circumstances with the EU27. On our tariff policy, we will come to that in due course.
Stockpiling by business is at its second highest rate since 1992. The Treasury suggests that new customs paperwork for no deal would cost UK business £13 billion. When will the Minister’s boss, the Chancellor, stop arguing privately against no deal’s staying on the table and publicly take on the scorched-earth fantasists in his own party?
The questions I have just responded to are in a similar vein and all lead back to one conclusion, which is that, if we are to avoid a no-deal scenario, there has, by definition, to be a deal that is agreed with the United Kingdom. We have a very good deal that the Prime Minister has negotiated and will be negotiating further with the European Union. It sees us respecting the outcome of the 2016 referendum but, most importantly, making sure that flows across our borders are as frictionless as possible.
Leaving the EU: Scotland
The Prime Minister’s deal delivers the ability to negotiate free trade agreements with third-party countries and to protect trade with the EU. So I suggest that the SNP backs the deal, rather than try to stop Brexit.
Will the Minister confirm that we do not actually know any of the full economic effects because the Treasury has not conducted an economic analysis of the Prime Minister’s deal? On that basis, can it really be the Government’s view, as the Environment, Food and Rural Affairs Secretary told me a couple of weeks ago, that other European countries will be looking enviously at the UK’s position?
It is an absolute cheek for SNP Members to claim that there is an issue with our deal, given that they want to break up the UK. Some 61% of Scotland’s external sales are actually to the rest of the United Kingdom.
In Scotland, goods exports to non-EU countries are higher than those to EU countries, so does my right hon. Friend agree that because of the trade deals that this Government are seeking to strike Scotland will benefit from that growth?
My hon. Friend is correct. Of course, Scotch whisky is one of our flagship exports right across the world. We have the opportunity to renegotiate some very high tariffs and make it even more of a bestseller.
The Government’s deal was rejected by a record vote in the House. Business leaders in Scotland and across the UK want the Government to rule out any prospect of no deal, and the Chancellor told business leaders that that was possible, so why have the Government not ruled out any prospect of no deal?
It is important that we keep no deal on the table to get a better deal from the EU. I strongly encourage the hon. Gentleman to support our deal as the best way to take no deal off the table.
Quite clearly, the Union of the UK is vital to the prosperity of Scotland and the border area. Does the Chief Secretary to the Treasury agree that Government initiatives, such as the borderlands growth initiative, also make a vital contribution to the prosperity and success of the region?
My hon. Friend makes a good point. The borderlands deal is an important way of stimulating growth across the border area, although it would also help if the Scottish National party Government followed through in Scotland on things such as the tax cuts we have introduced elsewhere in the UK.
In 2010, the Government inherited from Labour a deficit at a post-war high. Since then, owing to decisions the Government have taken and the hard work of the British people, the deficit has reduced by about four fifths and is forecast to be just 1% of GDP by 2021-22. The Government’s balanced approach is ensuring that debt is falling while also supporting vital public services, keeping taxes low and investing in Britain’s future.
I am sure the Chancellor will join me in celebrating the fact that for the first time we are starting to see a sustained reduction in our overall debt. Does he agree that the worst thing we could do is hand over the levers of our economy to the Labour party so that it might leave us yet another toxic inheritance to clean up?
My hon. Friend is right. The public finances have reached a turning point. This is the first time in 17 years that we are not borrowing for day-to-day expenditure. Debt has peaked and now begun to fall—its first sustained fall in a generation—and the last thing we want is for the hard work of the British people to be thrown away by the incompetence of a Labour Government delivering higher debt and higher interest payments, which they always do.
The Bank of England has forecast a range of negative impacts on the economy from Britain’s leaving the EU, with or without a deal. What assessment has the Chancellor made of the impact of these on the public sector deficit and his current public spending plans?
The Government have made a cross-departmental assessment of the medium to long-term effects of different Brexit outcomes, which the Government have published. The Bank of England, because it is better equipped to do so, has made an assessment of the short-term impacts of leaving the EU under different scenarios, which it has published.
You’re the Chancellor of the Exchequer. You should have made it yourself.
Order. The hon. Gentleman is a cerebral denizen of the House. I know he is arguing the toss about what he thinks is the inapplicability of the personal views or the professional opinion of the Chancellor, but he should not offer a lecture from a sedentary position. We are accustomed to hearing this eloquence when he is on his feet. We do not need to hear him when he is in his seat.
The next most important update on the deficit will be the Office for Budget Responsibility’s statement around the time of the spring statement, but the OBR has been clear that it can only make a forecast once it knows the Government’s plans for Brexit, so could the Chancellor give the House an update on when he thinks the OBR will be able to produce that work for the spring statement in relation to the Brexit timetable?
Yes I can. My understanding is that the OBR is basing its forecasting work on the same assumptions it used at Budget 2018 but, as my right hon. Friend has asked me, I can inform the House that the spring statement will be made on Wednesday 13 March. I remind the House that it is not a fiscal event but that, as I have said before, if the economic or fiscal outlook changes materially, it is always open to us to turn it into one.
World-class connectivity is vital to tackling the deficit, but the Treasury’s decision to stop investors in community benefit societies receiving 30% tax relief could undermine the good work of broadband pioneers such as Broadband for the Rural North—B4RN—in Cumbria. Given that B4RN has reached the parts of Cumbria that the Government and BT could not or would not reach, what assessment has the Chancellor made of the effect of that decision, and will he think again about his damaging proposals?
I am not familiar with the case to which the hon. Gentleman has referred, but obviously we want to encourage the delivery of high-speed connectivity in all areas, including rural areas. If the hon. Gentleman wishes to write to me with the details, I shall be happy to look at them and respond to him.
We have taken a large number of measures to ensure that all companies pay the appropriate amount of tax, and we have closed a significant number of loopholes that have been used to avoid corporate tax in the past. My hon. Friend will understand that I cannot discuss individual taxpayers at the Dispatch Box, but of course the Government want to see every taxpayer paying the appropriate amount and contributing fairly to the support of our public services.
Bonkers, Mr Speaker. Let me add, respectfully, that I am referring not to you, Sir, but to the response of the Resolution Foundation’s director to the Chancellor’s £6.2 billion corporation tax giveaway. Even the adviser to the previous Chancellor says that the cut represents poor value for money, and the danger is that it will slow progress in reducing the deficit. If the Chancellor is giving away £6.2 billion, does he accept that it would be better given to, for example, cash-strapped local councils, rather providing handouts for cash-rich corporations?
The Labour party will have to get its act together, and organise a discussion between its Front Benches and its Back Benches.
You ought to get your act together.
Well, I know where the deep divisions lie. [Interruption.] We have heard many Opposition Members express concern about a lack of investment and the potential relocation of businesses, but now the hon. Member for Bootle (Peter Dowd) has popped up on the Front Bench suggesting that we hit business with an additional tax charge. Labour is the party that is proposing to increase corporation tax for businesses, including the smallest in our country. We will remain the party that is encouraging businesses, large and small, by ensuring that ours is an attractive jurisdiction for investment to take place.
Not content with his Government’s manic drive—and there was an example of it—to turn Britain into a bargain basement economy, the Chancellor is splashing out billions of pounds of taxpayers’ money to prop up a no-deal Brexit. Will he come clean and admit that the hard Brexit for which he is reluctantly preparing may lead to increased borrowing, more debt and the widening of the deficit, not to progress in reducing it?
Some might think it a bit rich for Labour Members to lecture us about increasing deficits and debt, given that their stated policy is to increase the deficit and the debt. Let me be frank with the hon. Gentleman. He has seen the analysis that the Government have published. If we leave the European Union without a deal, yes, it will lead to an increased deficit, and it will lead to an increase in the debt. That is why the Conservatives are working to ensure that we deliver the deal that will protect the British economy. What I do not understand is why Labour Members who genuinely fear a no-deal outcome do not get behind the solution.
New Hospitals: Capital Funding
We have committed £3.9 billion of capital investment by 2023 to transform and modernise NHS buildings. We are also increasing the NHS budget by 3.4% a year, while keeping taxes low for working people.
Despite the hospital having outstanding staff and the extra moneys that have gone to Princess Alexandra Hospital in Harlow, the building is in a very bad state and not fit for purpose and we desperately need a new hospital. Will my right hon. Friend use the moneys from the excellent £20 billion extra money for the NHS and work with the Health Secretary to make sure that we get a new hospital for Harlow?
I thank my right hon. Friend for his question. In December, we allocated £9.5 million to the Princess Alexandra Hospital to help to improve the emergency care pathway, but I recognise that there are further issues. Of course we are in discussions with the Department of Health and Social Care and these issues will be looked at in the spending review.
It is not just about capital spending; it really is, in relation to acquired brain injury, for instance, also about making sure we have enough people to follow on from the work done in the new trauma centres to make sure there is proper neuro-rehabilitation and local authorities have enough money to provide decent housing for people. Will the right hon. Lady look at this in the round? Will she make sure that we are not letting people down? We can have as many wonderful hospital buildings as we want, but in the end you need people to treat people.
That is one of the reasons—rising demand—that we have put extra money into the NHS: up to £20 billion per year. But as part of the spending review we will be looking across the board to make sure that services are integrated and we are investing to get the best possible results for people.
We are working to tackle the root causes of poverty by getting people into work and giving children the best possible education. A record number of children are now in working households and there are 630,000 fewer children in workless households than there were in 2010.
A number of Members have been involved in the children’s future food inquiry, and we have heard some shocking stories recently about children going to school hungry, packed lunches consisting of maybe two slices of white bread with nothing in between and worse stories. What is the Treasury doing to help the UK to meet the sustainable development goal on zero hunger because it seems at the moment that it is doing very little?
I point out to the hon. Lady that 1 million fewer people are now in absolute poverty than were in 2010, including 300,000 fewer children, but of course we continue to look at the best way to help children in school—I know that the Department for Education is looking at this—to make sure that children are properly nourished.
The Treasury could tackle child poverty, attack the bureaucracy and help lower-paid workers across the economy in the UK by raising the level at which people begin to pay national insurance contributions as well as tax, thereby assisting local people in the economy across the United Kingdom.
We are working to make sure that those on the lowest incomes keep more money in their pockets, so at the Budget we increased the amount working families will be getting on universal credit by £630 and we cut basic rate tax, to the benefit of £130, for families on those incomes.
If the hon. Member for Bolton West (Chris Green) wishes to shoehorn his inquiry into the question of which we are treating now, it is a very neat fit.
One of the reasons we introduced UC was to make sure that work always pays and we have been continually working to make the system better, reducing the taper rate. Of course we continue to look at that as we roll it out.
For heaven’s sake. In the last two years of the Labour Government, the number of children living in absolute poverty fell by 400,000. In the next seven years of Tory rule, it fell by only 100,000. At this rate it is going to take 28 years for the Tories to achieve what Labour achieved in two, and one and a half centuries to end child poverty, even without this Government’s blooming Brexit disaster. Does the Minister not understand—this ain’t success, or doesn’t she care?
If we are going to trade statistics, at the end of the last Labour Government, 20% of young people were unemployed and 1.4 million people were on welfare and left on the scrapheap. We have record employment and the lowest unemployment since the mid-1970s. The way we are going to solve the issue of poverty is to help people get on, help people get into work and get our education levels up.
Leaving the EU: No Deal
Leaving the EU with a deal remains the Government’s top priority, but as a responsible Government we are, of course, also making preparations to ensure that the country is ready for every eventuality across all sectors of the economy. I have made substantial funding available to prepare for the UK’s exit from the EU in all scenarios. HMRC has written on no-deal preparations to 145,000 EU-only traders, and the Government have produced a partner pack to support stakeholders in preparing for a no-deal scenario.
And worth every penny, isn’t it? How much in total is the Chancellor spending on delivering the people’s decision?
Let me put it this way: since 2016 I have made more than £4.2 billion available for EU exit planning, and funding for the 2019-20 financial year has now been allocated to Departments. That is funding to prepare the Government for leaving the EU in any scenario. In addition, I have made arrangements to ensure that Departments and the devolved Administrations can fund measures to address urgent civil contingencies in a no-deal scenario.
The Chancellor has rightly made very clear his determination to avoid a no-deal Brexit. How in practice does the Treasury distinguish between those no-deal preparations that have enduring value for money and those that will have been wasted in the event that he is successful?
Some of the expenditure being undertaken by Departments will be required in any case for our post-EU future, whether we leave with a deal or no deal, but I have made no bones about the fact that some of the expenditure is of a precautionary nature. The expenditure will be nugatory if the deal is agreed and we leave with a smooth trajectory. Every responsible Government, across all areas of activity, undertake expenditure to deal with potential contingencies, to ensure that the country is prepared for eventualities that may arise. It is proper that we should do so.
We are running out of time, so we need one-sentence questions.
Deal or no deal, one deal that is really working is the nuclear sector deal. Does my right hon. Friend agree that that is a hugely important venture in the south-west and that we should support and encourage it? So far, it has put £900 million into the south-west economy.
That was absolutely hopelessly long.
My hon. Friend demonstrates ingenuity and she is absolutely right: the nuclear sector deal is very important.
Obviously, we are disappointed by Hitachi’s decision to suspend work on the Wylfa project, but we have not given up hope. It retains the site and we hope that the work we are doing on a possible alternative financing model may yet allow the project to go ahead, but I am very happy to meet the hon. Gentleman.
Leaving the EU: Economic Forecasts
On 28 November, the Bank of England published analysis on how the short-term impact of leaving the EU could affect the Bank’s ability to meet its objectives for monetary and financial stability. That analysis is published independently and reported to Parliament, but in line with normal practice no comment will be made on discussions between Ministers.
The Bank of England knows that no deal will be a disaster, and so do Ministers and the Chancellor, yet the Prime Minister is whipping her MPs to vote today for an amendment that will make it more likely. What does that say about the Chancellor? Does the continued presence of no deal on the table speak to his lack of influence, his lack of authority or his lack of courage?
I very much regret the hon. Gentleman’s tone. As he knows, the reality is that the best way of avoiding a no-deal scenario is to get behind the Prime Minister’s deal and vote for it.
I was contacted this week by a constituent who runs a business in Derry/Londonderry. He writes:
“The official position is that”
the recent bomb attack
“is nothing to do with Brexit; everyone I’ve spoken to finds this laughable—it is everything to do with Brexit. The danger, irresponsibility and absurdity really comes home to you when the bomb disposal Land Rovers are screaming past our office.”
What does the Chancellor think the implications of Brexit will be for jobs in Northern Ireland, when local employers feel like this?
I very much recognise the risks associated with no deal. That is why the Government are very clear, as the Prime Minister will set out shortly, about the imperative for the House to come behind the deal and vote for it.
2019 Loan Charge
The loan charge is not retrospective. The schemes that were entered into and to which the loan charge relates have always been defective—they never worked, including at the time when they were entered into. That has been evidenced by a number of court cases, including one put before the highest court in the land, the Supreme Court.
Her Majesty’s Revenue and Customs is allowed to go back to 1999 to look at tax records. Records that it can look at include those in otherwise closed years. If that is not retrospective, I don’t know what it is. What word would the Minister use to describe the loan charge to my constituent, who tells me that he started a business working in the oil and gas industry, living in Orkney but working across the globe, doing everything the Government would want him do? How does he now find himself facing bankruptcy, before his 29th birthday?
An important principle lies at the heart of the whole debate around the loan charge, which is that individuals should pay the tax that is due. If they enter into arrangements that basically mean they disguise income as a loan that they have no intention of ultimately repaying—money that is, more often than not, routed via low or no-tax jurisdictions overseas, via a trust, then brought back into the United Kingdom by way of payment—the Government believe that that is wrong, and the tax should be paid.
What assessment has the Chancellor made concerning an immediate suspension of the loan charge and all settlement discussions within an appropriate period, to allow the loan charge review to be properly conducted and any recommendations to alter the legislation to be implemented?
My hon. Friend will know that the loan charge was brought into effect in 2016. It allowed three years for individuals to clean up the loans—if they were loans, they could be refinanced on a proper, commercial basis—or to come to an arrangement with HMRC. The most important message that I can give from the Dispatch Box today to those involved in these schemes is to get out of avoidance, to get in touch with HMRC and to settle their affairs. They will have a sympathetic and proportionate hearing.
Adult Education Funding
We fully fund adults to take English and Maths to level 2. From 2020, we will also be funding them for basic digital skills. Those are the vital skills that people need to get a job and get on in life.
In the last 10 years, total enrolment of adults in further education colleges has dropped by 62%, including at Bath College in my constituency. Enrolment in health and social care is down by 68%; in engineering, it is down by 68%; and in construction, it is down by 37%. Does the Minister agree that this situation is of huge concern and that the Treasury must look at serious reinvestment in adult skills as part of the upcoming spending review?
We do fund the core courses that are going to help people get work and get on in life, but we also provide adult learner loans so that people can help shape their own future. In 2017-18, we spent £220 million on those loans.
My principal responsibility is to ensure economic stability and the continued prosperity of the British people. At this juncture, the best way to achieve that objective is to support a negotiated Brexit, ensuring a smooth and orderly departure from the EU.
Cheltenham’s Government-backed future cyber park will deliver jobs and opportunities for local people. What role will the Government’s university enterprise zones play in ensuring that this project is backed to its full potential?
I welcome the work that is going on in Cheltenham to build on the magnetic effect of GCHQ and to attract innovative cyber-based firms to the area. In autumn Budget 2018, I announced £5 million to support proposals for university enterprise zones, which will encourage collaboration between universities and businesses, promote knowledge and skills exchange, and deliver a boost to local productivity. The funding will allow excellent institutions such as the University of Gloucestershire to develop locally led proposals to build on strengths like cyber-security, technology and engineering.
Let me bring the Chancellor back to Brexit. He knows full well the impact that no deal would have on people’s everyday lives. As we have heard, the British Retail Consortium warned yesterday that a no deal would lead to higher food prices, and even to empty shelves. The Government’s own economic analysis suggests a 10% hit to real wages. Knowing all this, would not a responsible Chancellor—a senior member of the Cabinet—stand up to the Prime Minister to insist that she rules out a no deal?
We are absolutely determined to avoid no deal, but the way to avoid no deal is to deliver a deal. As the Prime Minister has said from this Dispatch Box many times, the choice is stark: do the deal or face no deal or no Brexit. No Brexit would be a betrayal of the democratic decision of the British people, and no deal would be a betrayal of our economic future. The deal is the only way forward that protects our democracy and our economy.
It is a deal that lost in this House by a majority of 230. Just as business leaders were not reassured by the Chancellor’s phone call, I do not think the House will be reassured by his response today. The Bank of England has warned that we are potentially facing an economic crisis even more severe than the financial crisis of 2008. Past holders of his great office of state would have had the strength and authority around the Cabinet table to prevent the Prime Minister from behaving so recklessly. At a time when the country is facing a potential national economic crisis, has there ever been a Chancellor so weak?
If the right hon. Gentleman believes what he has just told the House, he should get off his backside and get the Leader of the Opposition off his backside, and they should get themselves over to Downing Street to sit down and engage with the Prime Minister so that we can solve this problem in the national interest.
There is a lot to be said for Essex. The right hon. Lady and I can agree about that.
Mr Speaker is right: the only way is Essex. My right hon. Friend the Member for Witham (Priti Patel) is a great champion of the fantastic county of Essex, and she will have noticed that the Ministry of Housing, Communities and Local Government has already launched a fair funding consultation on local government spending. In the spending review we will, of course, look at the different funding streams and make sure they are fair for all parts of the country.
The hon. Lady is incorrect. Over the course of this Parliament, infrastructure spending will be highest in the north of England—higher than in London, higher than in the south-east and significantly higher than under the last Labour Government.
A consultation was launched in October, and we intend it to be as wide as possible. The consultation closes today and the Government will respond shortly, but we are very sympathetic to where my right hon. Friend is coming from.
We have a cross-Whitehall committee that regularly discusses impacts of a no-deal exit and makes preparations for them. The issues that the hon. Lady is raising have been and will continue to be considered in that forum.
I thank my hon. Friend for that question. The creative industries are vital to our country. This Government have provided an array of very important tax reliefs to that sector—they were valued at £850 million in 2017-18. We will continue to support the sector.
As the hon. Lady may know, the way the loan charge works is that those who have been involved in this form of tax avoidance have until April to settle their affairs, in which case no penalty will be applied at all. We have also said that those earning £50,000 or less will automatically qualify for a five-year minimum repayment term. My message, as always in these circumstances, is that those who are involved in these schemes should come forward, speak to HMRC and sensibly sort out their arrangements.
I agree with my hon. Friend on this. Forecasting has had a bit of a bad rap in this House over the past couple of years, but this report was interesting, because it showed that economic forecasts in fact have a good track record of delivering, and we should pay attention to what the experts are telling us.
Let us hear about the jazz situation in Runnymede.
Jazz is alive and well in Runnymede. Perhaps the hon. Gentleman will give me the precise address of the Runnymede Jazz Club later. The measures we announced in the Budget to support high street and retail more generally apply to all retail outlets with a rateable value of less than £51,000. If he has a specific point to make about music venues, I or one of my colleagues would be happy to meet him to talk about it.
I welcome the future high streets fund and the various business rate reliefs that the Chancellor has provided. What more can he do to support bricks and mortar retailers who have a far greater business tax liability than the online giants they are now competing against?
We have made more than £1.5 billion available to reduce the impact of business rates on smaller retailers. At the Budget, we provided a 30% discount for small retailers, which will have a huge impact in my hon. Friend’s constituency. We have the £675 million future high streets fund, and we are also bringing forward planning reforms to make it easier for small businesses and entrepreneurs to change the use of their shops and restaurants.
What I can tell the hon. Gentleman is that banks must make commercial decisions on the basis of what works for them. When I visited Scotland, I found they were also keen to work with post offices and the Government’s provision to make sure that services can be delivered through the Post Office.
Average wages in my constituency are below the national average, with many people earning the living wage. Tax rates really matter to them, so is that not precisely why we Conservatives voted for a tax cut for 32 million people, in contrast with the Opposition? Will we continue to be truly the party for working people?
We are truly the party for working people, as my hon. Friend states, unlike the Labour party. We are the party that raised the personal allowance to £12,500 one year ahead of our manifesto commitment to do so, taking well over 4 million of the lowest paid out of tax altogether. We are also the party of the national living wage, which will go up by 4.9% this April and be of great benefit to the very lowest paid in our country.
We knew that shifting the BBC licence fee concession to the BBC has always been folly, but we now know from the BBC’s consultation that the £745 million cost is likely to mean either a reduction in output, pensioners losing the concession, or both. Will the UK Government finally reverse this ridiculous decision and bring the concession back to the Government?
A consultation is under way that I believe ends on 13 February. Once it is complete, the Government will consider it.
What is the Treasury’s view of the idea of opportunity zones to help to revitalise some of the more disadvantaged parts of our country, particularly in that they differ from enterprise zones because they involve a capital gains cut rather than other types of tax relief?
I congratulate my hon. Friend on his article proposing new ideas. He raises one example of some of the exciting prospects for the post-Brexit economy that will help to revive some of the industrial areas throughout Britain.
Does the Chancellor of the Exchequer have any plans to meet Tom Enders, the chief executive of Airbus, to discuss his view that no deal will be disastrous for the UK economy?
I am pleased to say that I recently had an opportunity to talk to Tom Enders and his successor Guillaume Faury, the incoming chief executive of Airbus, and to assure them of the Government’s commitment to make the UK a hospitable and attractive place for Airbus to continue to do business.
UK corporation tax was already the third lowest in the G20, yet this year the Government are spending more on an unnecessary corporation tax cut than it would cost to end the cruel benefits freeze. Politics is about choices. Can the Chancellor not see that when the poorest are suffering, a race to the bottom on corporation tax is the wrong priority?
If we want to have well-funded public services and a generous welfare support system in this country, we also have to ensure that we have a solid business base creating the jobs and the tax revenues for the future. It is about getting that balance right, and in my opinion right now is not the time to be sending a negative message to businesses about the attractiveness of investing in the UK.
When is the Chancellor going to make money available to address the shortage of police officers in the West Midlands? We are 3,000 short. I regularly have representations from residents in Finham, Willenhall and St Michael’s about the high increase of crime in their areas. When is the Chancellor going to make funds available to replace these officers?
As the hon. Gentleman will recognise, the recent police grant funding statement provided extra funding, both from grant and from precept, into the police, meaning funding will be going up in real terms.
Sirius Minerals already employs more than 800 people in North Yorkshire and Teesside in the world’s largest polyhalite mine, but to bring 50 years of growth and job opportunities to our region, it needs a Treasury guarantee on its funding. Will the Chancellor make that guarantee available today and unleash a whole new era of jobs and opportunities in my area?
I am familiar with the project in question and a discussion is going on between the company and the Treasury. Those discussions are of course commercially sensitive and confidential, so I cannot discuss them, but the conversation is ongoing.
I feel sure that the House will want to hear the Strangford Zebedee. The hon. Member for Strangford (Jim Shannon) has been bouncing up and down on virtually every question; I do not want him to feel socially excluded.
They always wish to hear the Strangford perspective on life, but that is by the by.
Will the Chancellor outline the possible negative effects that reducing the deficit could and would have on the defence budget in the next three years?
The Government have made a commitment to maintain the real-terms value of the defence budget at 2% of our GDP, increasing defence spending in real terms in every year. We have no intention of changing that commitment to UK defence.
When will the Chancellor give some much-needed money to our police forces?
As I have just pointed out, we have given extra grant funding to the police forces. We are also achieving better efficiencies in conjunction with the Home Office, and we have covered the cost of additional pensions as well.
Workers at Dyson, Jaguar Land Rover and Ford are among the casualties of the threat of no deal. Given the number of jobs at risk, is it not time for the Chancellor to get off his backside and ask the Prime Minister to rule out the threat of a no deal and to stop holding Parliament and the country to ransom?
Parliament speaks for itself, and Parliament clearly has the opportunity to speak on this issue. I will continue to work with the Prime Minister to try to ensure that the deal that we place before the House of Commons is improved in a way that allows Members of Parliament to get behind it to ensure that we are not faced with the unacceptable choice of either no deal or no Brexit.
Further to the question asked by the hon. Member for Bethnal Green and Bow (Rushanara Ali), will my right hon. Friend find time to have a meeting with my constituent, Sir James Dyson, to ask for confirmation that, rather than taking people to Singapore, he is taking only two senior executives to Singapore? He has invested £200 million in a research and development facility at Hullavington in my constituency and £43 million in a college in Malmesbury. He is employing 4,500 people, and that number is increasing rather than decreasing.
I or one of my colleagues will be very happy to meet Sir James Dyson should he request such a meeting. We regularly meet industrial leaders, and we will continue to do so.
Yesterday, the Prime Minister announced her support for the Brady amendment, which will profoundly change the deal. What right has the Chancellor got to ask us to vote for a deal that the Prime Minister herself wants to tear up?
In a very short while, after a very important statement that is about to be made by my right hon. Friend the Financial Secretary to the Treasury, the Prime Minister will set out her case to the House, and the hon. Gentleman and all his colleagues will be able to consider carefully what is now in the national interest.
Can the Chancellor explain to people across the UK what the point is in balancing the books if it is on the backs of the poorest in our society, and they are being starved into shoplifting? In Dundee recently a woman was left with £90 a month on which to live. The sheriff said that it was a matter of considerable concern that someone was trying to live on £90 a month. What does he say to the judiciary and what does he say to our citizens who are being starved into poverty?
Earlier in this session, I said that, if we want to have well-funded public services and a well-funded welfare support system, we must ensure that we have a sound economy. Part of having a sound economy is to get our deficit under control and our debt falling so that we are less vulnerable to shocks in the future. Our current levels of debt mean that this country is vulnerable in the event of an economic downturn. Such downturns come along from time to time, and we need to be able to manage them in order, precisely, to protect the poorest in our society.
Does the Minister agree that the Government’s idea of turning high streets into residential streets or office spaces is not a solution to solving our high street crisis?
That is not what the Government propose or have proposed, but we must recognise that retail is changing and that the nature of our high streets has to change. The future high street will probably be smaller than the high streets of today. It makes sense to use the land that is released around our high streets to develop residential accommodation, addressing the housing challenges that we face, but also bringing footfall back into our high streets and town centre areas to give them vibrancy and a decent chance for the future.
What procurement and budget advice did the Chancellor’s Department provide the Department for Transport before it awarded a ferry contract to a ferry company with no ferries?
The Department for Transport has complied with all the Treasury’s Green Book procedures in letting the contract in question, and the decision to go ahead will have been taken with the consent of the Department for Transport’s accounting officer.
On a point of order, Mr Speaker. I may have erroneously misled the House when I said that the Minister said that the Government were creating 75 businesses a minute. It has been pointed out to me that he actually said 75 businesses a second.
No, I think that the Minister said a business every 75 seconds.
But is it true?
It is not for the Speaker to be the arbiter of truth. Knowing the ambitions of the hon. Member for Rhondda (Chris Bryant), it is important that he knows what he is letting himself in for. He would have important responsibilities, but the adjudication upon the matter of truth would not be one of them.
Further to that point of order, Mr Speaker.
In deference to the seniority of the hon. Gentleman, I will hear his point of order if he insists.
I just wanted to thank you for correcting the record, Mr Speaker. I would be glad if the record could be put straight. As you said, the figure was 75 businesses a second. [Interruption.]
I am getting advice that is the product of the scholarly cranium of the Clerk of the House, but I think I will leave the hon. Gentleman to find his own salvation. We will leave it there.
HMRC Estate Transformation
With permission, Mr Speaker, I would like to make a statement relating to Her Majesty’s Revenue and Customs estate transformation.
In the 2015 spending review, the Government announced HMRC’s locations programme to transport the Department’s office accommodation across the United Kingdom, moving from 170 legacy offices to 13 regional centres over the space of 10 years. I am pleased to report to the House that HMRC has now successfully secured sites for each of these 13 regional centres. This is a significant milestone in the Department’s trajectory towards serving the taxpayer from buildings that facilitate more efficient and technologically adept working across every region and country of the United Kingdom. This year will see two regional centres open in Belfast and Bristol—the first to follow the pilot in Croydon and to learn from the Department’s findings there. I will be receiving the keys from the developer on behalf of Her Majesty’s Government in the handover next month in Bristol.
The HMRC offices in 2015 varied hugely in size, quality and accessibility of location, but HMRC has since worked towards offices that are well equipped and large enough to offer serious career progression in city centre locations that allow for travel across the country as well as the recruitment of local graduates. The higher standard of building, designed to support digital, flexible ways of working, is an integral component of HMRC’s broader plans to better provide service to the taxpayer at a lower cost. It is by making better use of technology and working differently that HMRC can become a more highly skilled organisation, maximising revenue, increasing compliance and further reducing the tax gap. Its Croydon regional centre is already open, impressing those who visit it with a new understanding of what it means to work for the civil service, and providing a valuable prototype for the remaining offices.
Securing the locations of these 13 offices is an important step in the wider Government plans to create hubs across the country, and to move civil servants out of London and the south-east. The regional centres are not just offices for HMRC, but form part of Government hubs and sites for cross-Government work. NHS Digital will be taking space in the Leeds regional centre, for example, and the DWP will be taking space in Birmingham.
The Cabinet Office is responsible for the wider Government hubs programme and it plans to align Government policy so that it is efficiently used and maximises opportunities for, and productivity of, civil servants. HMRC’s 13 regional centres are the first phase of delivering this vision. I am proud that the public sector is stepping up to the forefront of industry, thinking about what an effective, flexible and inclusive working environment looks and feels like. Far from lagging behind the private sector, HMRC is delivering offices that are suited to the 21st century, maximising current technology and planning ahead for what further change might be in the pipeline. Not only will this enable HMRC to provide its customers with good service while cracking down on the dishonest minority, it is also excellent value for money, saving over £300 million in the 10 years of the programme up until 2025 and then saving a further £90 million a year from 2028.
The route to this transformation is balanced by the recognition that in order to protect HMRC from business disruption, current staff and their expertise should be retained wherever possible. HMRC believes that about 90% of the staff that it had at the start of this transformational journey will move to a new regional centre or finish their careers in their current offices. To further manage potential disruption, the department is keeping eight transitional sites that will be open for longer to help to maintain continuity.
As HMRC gears up to manage the workload resulting from exiting the European Union, it is also providing additional space in regional centre cities for additional staff and retaining some space for longer so that the planning can benefit from the knowledge and experience of existing personnel.
To transform the services that HMRC delivers for the United Kingdom, we are modernising almost every aspect of what we do. I am proud that HMRC is at the forefront of this change within the civil service, and I commend this statement to the House.
I was given advance notice of the contents of this statement while I was in the Chamber for Treasury questions, and therefore time has been limited to prepare for it. I am surprised that we are now discussing this matter given that I and many of my colleagues have repeatedly raised problems with the Building our Future programme, and generally been met with one-sentence answers from the Government.
The Minister maintains that this announcement has come today because of the successful securing of sites for 13 regional centres, so I hope that he will indicate to this House which centre was secured yesterday in order to justify this statement being presented today. When will he publish the list of precise locations of each of these centres, given that he maintains that we have today secured those new places? That would be enormously helpful for us, because without that information we will be forced to conclude that this statement has been made today for reasons other than its newsworthiness.
In July 2014, HMRC published the Building our Future proposals on reforming tax collection services for the next five years. In November 2015, HMRC announced plans to cut the number of offices from 170 to the 13 that are, apparently, having their locations announced today. In January 2017, the National Audit Office published its report on that process. It indicated that that original plan was unrealistic. It stated that the estimate of estate costs over the next 10 years had risen by nearly £600 million—almost a fifth—with more than half of that being due to higher than anticipated running costs for the new buildings. The National Audit Office also forecast a further 5,000 job losses and said that the costs of redundancy and travel had tripled from £17 million to £54 million due to this programme.
So what exactly is happening now among the HMRC workforce as a result of Building our Future? Some 73% of HMRC staff surveyed said that the Building our Future plans will undermine their ability to provide tax collection services. Half of them said that it would actually undermine their ability to clamp down on tax evasion and avoidance. I have to say that that was my assessment as well when I visited a number of current and former HMRC offices right across the country— 10 of them—over the past few months.
The Government say in this statement that
“90% of the staff that”
“had at the start of this transformational journey”—
a piece of jargon if ever I heard one—
“will move to a new regional centre or finish their careers in their current offices.”
During the visits that I conducted, I did hear about staff finishing their careers—they were finishing their careers early because they could not travel to the new regional centres that the Minister is trumpeting today. People from Wrexham were being expected to travel every single day to Cardiff or to Liverpool. People from Exeter were being expected to travel to Bristol. These journeys are simply not feasible for people with caring responsibilities and simply not feasible on public transport. I note that the Minister said that having city centre locations leads to a situation where it will be possible to recruit local graduates, but of course what his Department has forgotten, and what the NAO reminded him of a couple of years ago, is that in many of these city centre locations the labour market is far tighter, so we often find that there is actually an enormous recruitment problem rather than the bonanza that might be suggested to people who read his statement uncritically.
At the end of the statement, the Government accept, it seems, the need to learn from expertise. I will quote the sentence, although it pains me a little to do so given its construction:
“As HMRC gears up to manage the workload resulting from exiting the European Union, it is also providing additional space in regional centre cities”,
which I assume means offices,
“for additional staff and retaining some space for longer so that the planning”—
of what, we do not know—
“can benefit from the knowledge and experience of existing personnel.”
Well, that raises almost as many questions as it answers. The situation is still unclear about where 5,000 extra customs staff will go—a point I will return to later.
None the less, that sentence, as garbled as it is, suggests that HMRC wants to build on existing experience, but that principle is just not being followed in the Building our Future programme. We had within HMRC centres of excellence across a whole range of different specialisms, whether income tax fraud or the different kinds of multifarious problems that taxpayers can have in filling out their self-assessment forms. Many of the staff who were employed in those specialisms have either already left or are thinking of leaving. A great example of this is what we have seen happening in Swindon, which was previously a centre for income tax fraud. There is now a centre of excellence being built up on that in Liverpool, but with none of the same staff and with none of that expertise. It is being built up from scratch, creating huge inefficiency.
The Government have dogmatically refused to reassess the Building our Future programme apart from when they have been forced to do so—as they acknowledge very, very briefly in this statement—and that is exacerbating problems in HMRC. The attrition rate is greater than the hire rate. We saw in 2014 an absolute reduction in staff of over 3,000 and in 2015 an absolute reduction in staff of over 4,000. In 2017, the UK had the second highest attrition rate out of the 55 countries that share data on their tax services. There has also been incredible mismanagement, with the release of 5,600 customer services staff and then, in 2015, the hiring of 2,400 new customer services staff. It is no surprise that morale is at rock bottom in HMRC.
I therefore want to ask some very quick questions of the Minister. Which new regional centre was secured yesterday? When will we have the list of locations of regional centres? If 90% of positions are retained or vacated due to people finishing their careers, does that mean that 10% of people in HMRC are going to be made redundant? Have there been any reviews of these plans in the context of Brexit? Has the Minister thought about the impact of this on the local economies that are so dependent on these jobs, as raised by many of my colleagues?
I thank the hon. Lady for her response. I will pick up on some of the points that she has raised.
The hon. Lady asked why this statement is being delivered today. I think that she partly, at least, supplied the reason for that herself, in that she has shown a very keen interest in these matters, as have many other Members across the House, quite rightly. It is right, as we have always said, that we will be transparent in the roll-out of this transformation programme, and today is part of that process.
Towards the end of the hon. Lady’s remarks, she called for a review of our arrangements in the context of Brexit and the customs arrangements that our country may face. That is the second reason why it is important that we consider these matters. The debate this afternoon will rightly focus on preparedness, among other matters, and HMRC and its transformation programme lies at the heart of the issues that will be debated.
The hon. Lady asked for the locations of these sites. I believe they are all in the public domain, but I am happy to provide her with a list. She also made several observations about the NAO report and value for money. We are still confident that we will meet our roll-out end date of around 2025. In terms of value for money, there will be savings of some £300 million across the 10 years. I remind the hon. Lady that we will be getting out of a substantial number of private finance initiative contracts that the existing offices are engaged with—PFI contracts that were brought in under her party’s Government in 2001. One driver of additional value for money is that we will be able to unpick the unfavourable arrangements that her party’s Government got us into in the first place.
The hon. Lady asked about the cost of redundancy. I said in my opening remarks that some 90% of those who will be impacted by these moves will either conclude their career in their existing offices or relocate to the new regional hub. The overall thrust of these changes is to ensure that we are better equipped at getting in more tax. It is very much a Labour philosophy that every solution has to involve more money and more people, whereas our approach is adjusting with the times and getting offices in place that are fit for the 21st century, often using complicated data-based interrogation techniques, for which large regional hubs are the way forward.
Some of the 170 legacy offices that the hon. Lady seems so intent upon protecting had under 10 staff in them. Most of the processes carried out by those staff were manual in nature rather than technology-driven, so they were far less efficient. For example, over 80% of self-assessment returns are now done in a digital format, which is why it is important that we move to this model.
I turn to the hon. Lady’s remarks about the staff themselves, who have been at the heart of our considerations as we have rolled out this process. All staff are given at least one year’s notice of any proposed change. They are quite rightly given face-to-face meetings with their managers to discuss the changes and assistance that they may require. In determining the locations of the regional hubs, HMRC mapped out the journey to work of the staff who would be impacted, to ensure that that was one of the principles taken into account when assessing where the locations should be. Those who have extended travel arrangements as a consequence of any move may be given assistance with additional travel costs for between three and five years. Transitional offices, which the hon. Lady raised, will provide additional opportunities for continuity of HMRC’s work and the opportunity of employment for those within these arrangements.
There is a purpose to this. It is not just about saving money, closing offices, suggesting that we are ready for the 21st century or making change for the sake of change. The purpose of these changes is to ensure that we continue the excellent work that HMRC is carrying out in clamping down on avoidance, evasion and non-compliance. The proof of the cake is in the eating: some £200 billion has been brought in or protected since 2010, and we have one of the lowest tax gaps in the world at 5.7%. That does not happen by magic; it happens by having an HMRC that is lean, efficient and up to the job. I commend this statement to the House.
More than 1,000 people work for HMRC in Southend. I understand that Southend will not be a regional centre, but what does this mean for the people who work in HMRC in Southend? Do the words “eight transitional sites” offer them any short-term hope? Will the Financial Secretary work with me to ensure that the figure is 90%-plus in Southend?
I thank my hon. Friend for his question. As he will be aware, we have announced that we will retain the Southend office until the end of 2022, but I am happy to meet him to discuss that matter.
I thank the Financial Secretary for giving this statement and for advance sight of it. It is clear that he has drawn the short straw today—perhaps it is penance for his “no food, no channel tunnel” gaffe. Somebody needed to give a statement so that we had less time for the Brexit debate, and at least 10 fewer Members will get to speak in it as a result of this statement.
This is an important statement, but the timing is bizarre, given that on 8 January HMRC produced on its website a list of addresses and details of the transitional sites. How come it has taken 21 days for the Financial Secretary to come to Parliament to allow us to ask questions on this statement? How come it happens to be on the day when we are discussing Brexit?
As the hon. Member for Oxford East (Anneliese Dodds) said, the entire programme of transformation and the way that this has been gone about is completely bonkers. Dedicated, experienced staff are being forced out of HMRC as a result of these closures. Communities such as Cumbernauld and Livingston are losing thousands of jobs as a result of these changes. Why on earth does the Financial Secretary think it is good value to close a large out-of-town office and move it to a city centre location where rents are hugely in excess of those in out-of-town locations, where staff will have massively increased travel costs to get to work and where business rates are likely to be far higher? Why does he think that this is a good idea?
The Financial Secretary said that 90% of staff who were at HMRC at the beginning of this process will still be there at the end. What about the 10% of staff who will not be there at the end? Will those staff be made redundant? How many of those 10% of staff are in Scotland?
People worked in HMRC offices in Inverness, Wick and Aberdeen, but the only regional offices in Scotland will be in Edinburgh and Glasgow. Does the Financial Secretary realise how long it takes to get from Aberdeen to Edinburgh, from Inverness to Glasgow or from Wick to Glasgow? It takes the best part of a day to get there from Wick. There is no way that people can commute that distance.
In terms of the customs checking functions that HMRC will need to perform, does the Financial Secretary believe that there will be adequate geographical coverage of customs staff once Brexit happens? More checks by customs officers will be required at those ports, and if it takes them a day to get to the port, there will be even more of a hold-up than is being suggested in a no-deal scenario.
I understand that HMRC is taking on an extra 5,300 staff to deal with Brexit planning. Could the Financial Secretary confirm how many of those 5,300 staff who are being taken on or have been taken on are in Scotland? How many of the 3,000 additional customer service staff who have been taken on are in Scotland? How many jobs will HMRC have in Scotland at the end of this process compared with the beginning? Lastly, I want to know why the Financial Secretary has taken 21 days to come to the House to tell us what was published on HMRC’s website on 8 January.
The hon. Lady raised a number of questions, one of which was about the issue of staff.
Answer the question.
If the hon. Gentleman gives me a moment, I will do precisely that, as I always do.
The answers to the hon. Lady’s questions relating to staff and the way in which we will be handling the staff are as I have set out. All staff will have at least one year’s notice of any impending move. The mapping process that HMRC undertook, as it went into the detail of where to locate the regional hubs, was very thorough. It took into account a number of principles, which I will come on to in a moment to answer another of the hon. Lady’s questions. Among those principles is the issue of the travel-to-work time, and every single employee’s home location was mapped against the possible new alternatives under consideration at the time those decisions were being made. I have also raised the issue of the transition offices, which are of course there, among other reasons, to provide employment opportunities for the staff.
The location principles—this comes to the questions the hon. Lady asked about why we have chosen one particular location rather than another, or indeed the existing location of the legacy offices—come down to eight key principles. They include transport connections, which are of course excellent in both Edinburgh and Glasgow, and the talent pool there, such as in universities—for example, Edinburgh and Glasgow have world-class universities—as well as the housing that is available, the quality of the schools and all the matters that will sustain the recruitment of the teams we will be bringing together in these 21st-century and much more sophisticated hubs for dealing with our tax purposes.
The hon. Lady raised the issue, which I know she has raised on previous occasions, of the location of these hubs in relation to our ports and points of entry into the United Kingdom. I think I can reassure her that, quite outside this whole process of the transitional arrangements, we will of course ensure that Border Force, HMRC and the Department for Environment, Food and Rural Affairs have the personnel available at those locations to make sure that they are able to run imports and exports efficiently. There is a general premise, however, in the suggestion that the offices somehow need to be close to people all the time. In fact, since 2014 it has been the case—[Interruption.]
Order. I think there is a sense in the Chamber that there is an inadvertent abuse going on. This is not a debate; it is a statement. The Financial Secretary has twice said that he commended the statement to the House: he said it in response to the first set of questions, and he had already said it when he delivered the statement. A brief and pithy encapsulation of the argument is what is required. A long dilation is not only not required, but notably irritating to the House.
I can only apologise, Mr Speaker, and I obviously accept your guidance on this matter. I believe I was asked about 20-plus questions between the two Front Benchers, but I take your point.
I will deal with one last point. The hon. Member for Aberdeen North (Kirsty Blackman) specifically asked me how many of the 5,000-plus personnel that HMRC is recruiting in the context of our Brexit planning will be based in Scotland. We are up to about 3,500 currently, and I will write to the hon. Lady to make sure that we provide her with the information she has sought.
When I was an inspector of taxes, the office network was totally incapable of being developed for a digital situation. How will this new programme make such development a possibility?
As a former tax inspector, my hon. Friend is probably about as popular as I am as a tax Minister, which is never the most popular job in the world. The answer to his question—in a short and pithy response, Mr Speaker—is that we have to move to the more digital-based, data-based and inspection-based system that is facilitated by the very hubs I have been describing.
This has already cost more, the projected savings have gone down, there are no break clauses in most of the 20 to 25-year leases and there is little buy-in from other Departments. The Minister has said that the DWP and NHS Digital—interestingly, he picked only two small examples—are buying into a couple of the hubs. Will he list the other Departments that are buying in by locating in these regional hubs?
There has been a series of discussions right across Whitehall, led by the Cabinet Office, in the area in which the hon. Lady has framed her question. The hon. Lady levelled the charge of cost, but she then very quickly went on to talk about savings, and there will of course be net savings from this approach of some £300 million by 2025.
Representing a coastal community, as I do, regional centres tend to be very many miles away. This is clearly a problem for staff, but also for constituents in their dealings with HMRC. Will the Minister give an assurance that, even in this digital age, face-to-face meetings between staff and constituents, where necessary, will be available locally?
All requests for face-to-face meetings are of course treated on their merits, and they are certainly not discarded out of hand. I reiterate my point that, since 2004, tax offices have generally not been open for members of the public to walk in and ask to speak to a tax inspector. Indeed, some 80% of self-assessments are now done digitally online.
I have a tax office in Wolverhampton South West that is going to close, and my constituents are not happy. For a start, Carillion has gone and now the tax office is going, and it does not make sense. The Minister has talked about face-to-face meetings, but there are actually a lot of face-to-face meetings in that tax office. The staff there are not happy about having to travel, and the Government are going to lose a lot of staff with experience. How can he explain that with regard to the regional hubs, because they are supposed to go to Birmingham?
The hon. Lady raises the issue of the tax office in her particular area of Wolverhampton. I am very happy at any point—this is of course an invitation to any Member—to speak to her specifically about the circumstances of the HMRC office in her location. Equally, Birmingham is not a huge distance from Wolverhampton for many of those people to commute to, but if the hon. Lady would like to take up any aspects of that with me, I will be delighted to speak to her.
I welcome HMRC’s work on the transformation of its estate and on gearing up for customs readiness for any eventuality. In particular, it is great news that the CHIEF—customs handling of import and export freight—system will be fully ready on 30 March to handle declarations for customs, and that simplifications of customs procedure are being made available to business. That will enable imports of goods into the UK to flow without hold-ups using inland clearance techniques. Will my right hon. Friend confirm that we will indeed be ready, and that fear is unjustified? Will he say what he is doing to ensure that a campaign is now activated to inform small and medium-sized enterprises about what they have to do to make use of the simplifications?
On the IT systems element of my hon. Friend’s question, he is absolutely right. CHIEF has been upgraded, and it is now capable of processing about 90 messages per second, which will be enough to handle the import and export declarations that may be required.
On the issue of informing the marketplace or traders about the new circumstances that may pertain after 29 March, we have written to 145,000 exporters that export only to the European Union and are not therefore familiar with customs arrangements. We have issued three iterations of our partnership pack and there is a huge amount of information on gov.uk, where businesses can also sign up to email alerts to make sure that they are aware of the very latest relevant information.
On behalf of myself and my hon. Friend the Member for Wolverhampton South West (Eleanor Smith), I have written to the Minister to ask for a meeting, with one or two reps from the trade unions, to discuss the situation in Wolverhampton and Coventry. People in Coventry will have to travel 16 miles to premises that are inadequate, while those who are left are not guaranteed jobs. I will not rehearse all the arguments now, but I would like to meet the Minister, with some reps and my hon. Friend, to discuss this further. Will he agree to do so?
I would be very happy to meet the hon. Gentleman to discuss the matters he has raised.
Improving public services is about more than just spending more money; it is about delivering better services more efficiently, on which the Treasury is well placed to lead. Will my right hon. Friend confirm that these changes will improve the services available to my constituents and how much money will he save to spend on the other public services they receive?
I can confirm that services will be improved. All the evidence suggests that is the case as we have upgraded and brought HMRC into the 21st century, and I have already stated that the savings will be of the order of £300 million in the run-up to 2025.
As the hon. Member for Aberdeen North (Kirsty Blackman) pointed out, the nearest centre will be a huge distance from my constituency. If we end up out of the customs union, ports such as Scrabster and Wick in my constituency will be the UK’s border. How exactly will the Minister get HMRC to support those ports? If he is going to put personnel in them, why do we not simply reopen the Wick tax office?
I cannot comment on the specific tax office that the hon. Gentleman mentions, although I am of course very happy to discuss that element of his question outside this statement. As I have already set out, having effective manpower at our ports and borders is a matter of making sure that we have adequate HMRC, Border Force and Department for Environment, Food and Rural Affairs staff available for that, and it will not impact on the fact that we are rearranging our HMRC tax offices.
Property prices tend to fluctuate, so how long are the leases on the new centres, and what break clauses are included in them?
I will write to my hon. Friend with the answer to that question, on the basis that these are all individual arrangements that have been entered into. As for lease arrangements, the first stage of the process is to enter into a commitment with the developer to take possession of the building; the lease is signed in due course. I will, of course, write to him with a more specific answer.
Given that a no-deal Brexit is likely to increase massively the number of customs declarations made at ports such as Hull by those transporting goods through them, and given that that is combined with the Department for Transport’s general lack of preparedness when it comes to our ports, how can the Minister justify taking these decisions at this point?
These are two relatively unrelated matters. Reconfiguring our tax offices is important for the reasons I set out in the statement. As to the hon. Lady’s point about preparedness for the very large increase that there may be in customs declarations, depending on where we land with the deal, I pointed out in answer to my hon. Friend the Member for Yeovil (Mr Fysh) that CHIEF has been upgraded substantially; it will be able to handle the kind of volumes that it may be necessary to handle.
The Minister may have heard of Trump Plaza in Atlantic City, which is now closed, but is he aware of Telford Plaza in the borough of Telford and Wrekin, which is very much open, and is the largest letting in Telford and Wrekin in the last decade? It is 112,000 square feet over 13 floors, and many HMRC staff are employed there. Would he care to visit that centre of excellence, when he can find the time in his diary?
I thank my hon. Friend for shamelessly promoting, quite rightly, the properties in his constituency. I would be very happy to meet him to discuss the area.
“‘Beauty is truth, truth beauty’—that is all
Ye know on earth, and all ye need to know.”
The Minister keeps referring to bringing together hubs, but the danger is that that will mean everything moving to big cities, and all the smaller towns in a constituency, such as all those towns in the valleys in south Wales, losing out. There are loyal HMRC workers, and cheaper properties, in many of these towns. Will he not look at those smaller towns?
The hon. Gentleman is suggesting that we set all current arrangements in aspic. Going back some decades, there would have been not 170 offices across the country, but several hundred. No doubt if we went back in time, the hon. Gentleman would have been on his feet telling us that we should keep 700 offices, rather than shrinking the number down to 170. The reality is that the way that the tax authority conducts its affairs is effective—I have given the figures—and there is a model that makes that happen. That lends itself to 21st-century hubs that have the right resourcing to do the job.
Given that cheaper premises were available just up the road in Bradford, it is absolutely ridiculous that the Yorkshire hub will be in Leeds. As HMRC made no economic impact assessment of the effect on the places that it is moving out of, will the Minister look at what financial support the Treasury can give from its savings to Shipley, to make sure that its local economy is not damaged by the closure of its tax office? There is already great congestion for commuters trying to get to Leeds on the train; what investment will he make to ensure that people can get from my constituency to Leeds on the train, which they cannot do at the moment?
The decision to have a Leeds office as opposed to a Bradford office has been rigorously looked at. It hinged on eight principles, some of which I set out in my response to the hon. Member for Aberdeen North (Kirsty Blackman), who spoke for the Scottish National party. On my hon. Friend’s more general point about the economic impact, the House should celebrate the economic success that we have had; we have the highest level of employment and lowest unemployment since the mid-1970s, and it is this Government’s policies that are providing that.
Four hundred people work for HMRC in George Stephenson House in Stockton South. Many of them have built their lives as carers and parents around their work. Why does the Minister think that it is okay to ask them to travel for an hour and a half each way just to keep their job, when 97% of them say that that is unacceptable?
I do not think that we are requiring all the employees at that location to travel in excess of an hour to fit in with the new arrangements. In my statement, I set out at length the various measures—I will not repeat them now—that we have taken to make sure that HMRC does the right thing.
How can we ensure that niche skills and the expertise of key HMRC staff are retained in this move to regional hubs?
My hon. Friend asks a very good question that goes right to the heart of why we are making these changes. If we are to build teams of highly skilled individuals, we need the right locations in which to house them; that will lend itself to the hubs that we are rolling out, which are in locations with good housing, good education, good access to a talent pool, good transport facilities and so on.
The Minister spoke of graduates being part of this transformation scheme. Will he confirm that HMRC will offer opportunities to apprentices, and will support apprenticeships across the board?
I can certainly assure my hon. Friend that HMRC engages with apprenticeship programmes, and is supportive of apprentices, as are the rest of the Government.
East Kilbride’s Centre 1 is so named because it was deemed No. 1 for taxation skills and experience, but the Public and Commercial Services Union reports that these plans lose the UK 17,000 years of tax experience. Everyone in EK knows someone who has worked in Centre 1 and utterly condemns this Government’s plans. Given that the Minister’s Department has been working constructively with me on the all-party parliamentary group on new towns to regenerate them, why is he devastating East Kilbride and new towns by closing our largest employer?
The hon. Lady is absolutely right to be as passionate as she is about protecting the existing workforce and making sure that we do not lose the workforce’s vital skills. That is why we have taken this approach. We are ensuring that the new locations are viable for those from the old. For example, we are assisting those who need to travel by meeting some of their travel costs over three to five years. We very much want to keep the high level of skills in the organisation.
Businesses in Chesterfield that I have spoken to that have had cause to query HMRC judgments have found the organisation monolithic and unresponsive to their queries. Does the Minister have any assessment of how many successful businesses go bankrupt or have a huge financial deficit as a result of a lack of experience in HMRC, and what will he do about that?
If we look at all the metrics, we can see that HMRC is doing extremely well on customer service at the moment, including time taken to answer telephone calls. There is always more to do, and we will continue to work at this, but it has a good record to date.
HMRC’s New Waverley development in Edinburgh is being used for photo opportunities by Back-Bench Tory MPs even before it opens. We know that the office of the Secretary of State for Scotland and of the Advocate General for Scotland, the Office for Statistics Regulation, the Information Commissioner’s Office, the Government Actuary’s Department and Her Majesty’s Treasury are also moving in. Will the Minister tell us exactly how much this enormous white elephant is costing us, and to which other Departments HMRC will sub-let?
The main thrust of the hon. Lady’s question seems to be to decry the fact that we are decanting more and more services into one location. There are many logical economic and business reasons why one would do exactly that. As for her charge that Conservative Back Benchers are going up to that location, I would suggest that that says they are very interested in these particular matters.
Unlike the CEO of HMRC, will the Minister show some common sense and heed the PCS union, which says he should halt his programme and instead concentrate on keeping the expertise, amounting to thousands of years, of staff at offices under threat?
Rather like the question from the hon. Member for Rhondda (Chris Bryant), the suggestion is that we just do nothing and stay exactly as we are. That would not be to the benefit of the taxpayer. Frankly, that would not be to the benefit of the staff, either, who will have increased opportunities as a result of the changes we are bringing in.
Phoenix House in Oldham is due to close to relocate to Manchester city centre. The cruelty is that, when we asked whether a different site in Oldham could be considered, there was a categorical refusal to even shortlist a site, despite rents in Oldham being half the price of those in Manchester city centre. Does the Minister understand the anger felt in many of our towns, which are being cast aside in favour of our city centres by a Government who just do not care?
HMRC has stuck to very clear, very fair and balanced guidelines on how to make the assessments—the eight location principles we have been discussing this afternoon—and I have absolutely no doubt that it was rigorous in adhering to that process. The individuals impacted by this decision are central to the approach HMRC is taking, in the way I have described.
Will the Minister publish an economic impact assessment for each HMRC office closure—in many towns, the largest employer is leaving? Will he publish an equality impact assessment, so we can see the impact on staff, particularly those with disabilities, who are being asked to travel over 100 miles to their new workplace?
There has already been an equality impact assessment. It is in the public domain, but I would be very happy to share it with the hon. Member.
Seventy-nine per cent. of staff surveyed said that the plans undermine their ability to provide tax collection. Are HMRC staff wrong?
What is wrong is the suggestion that we are not good at collecting tax. We are world class at collecting tax. We have a tax gap of just 5.7%. If we had the same tax gap that we had under the Labour party, the missing revenue would be enough to employ every policeman and woman in England and Wales. The Conservative way works; the Labour way squanders resources.
Given the staff and estate upheaval at HMRC, and the fact that the Government will not take no deal Brexit off the table, can the Minister explain to my concerned constituents why HMRC is sticking with the date of 1 April 2019 for making tax digital for all businesses—a day on which many businesses may have something else to consider?
When I first became Financial Secretary, one of the early decisions I took was to limit the roll-out of Making Tax Digital to just VAT and those businesses over the VAT threshold. The roll-out was delayed. I am confident that we are now in a position where businesses will be ready for that important change. That will be of benefit to HMRC by way of tax collection and important for the efficient running of those companies.
The Minister is closing down the valuation office in Rhyl, with the loss of 40 jobs. His Government have already closed the Army careers office in Rhyl, the Crown post office and the county court. In contrast, the Welsh Labour Government are investing £50 million in new schools, £50 million in flood defences, £28 million in housing and possibly £42 million in the refurbishment of a new hospital. Why are the Conservative Government disinvesting in struggling seaside towns and reinvesting in already overheated city centres?
The simple fact is that the Government are adopting an efficient approach to the use of our resources, including across HMRC. We do that for a distinct purpose: it allows us to spend more money on the things that our country expects us to spend money on, such as vital public services, including the national health service, where we will be spending £84 billion more over the next few years than under the previous Labour Government. I make no apologies for doing things that drive efficiency and allow us to support health and public services.
On value for money, the Minister is either sadly mistaken or badly briefed, because the reality for the 1,000 staff in my constituency is that they are going to one of the most expensive retail units in all of Scotland when they move to Edinburgh. Does he think it acceptable that, as I understand it from the PCS union, staff will be expected to sit in armchairs about which occupational therapists have huge concerns, and that staff who have disabilities or who are in wheelchairs have been told that if they cannot reach the screen or the plug sockets on their desks someone else can do it for them?
Clearly, I am not in a position to comment on very specific remarks about armchairs, but if the hon. Lady would like to raise the matter with me outside of this statement I would be very happy to discuss it with her.
There is deep and clear concern from the 479 hard-working HMRC staff at Sidlaw House in Dundee that their jobs may come to an end this year, rather than as planned in 2021, which was promised by the Treasury. Can the Financial Secretary give me an absolute guarantee today that their jobs are safe until the end of 2021?
I would be happy to meet the hon. Gentleman to discuss the details of that specific office location.
European Union (Revocation of Notice of Withdrawal) (No.2) Bill
Presentation and First Reading (Standing Order No. 57)
Angus Brendan MacNeil, supported by Pete Wishart, presented a Bill to require the Prime Minister to revoke the notification, under Article 50(2) of the Treaty on European Union, of the United Kingdom’s intention to withdraw from the European Union, subject to the legislative consent of the Scottish Parliament and the National Assembly for Wales; and for connected purposes.
Bill read for the First time; to be read a Second time on 8 February, and to be printed (Bill 326).
Smoking Prohibition (National Health Service Premises)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to prohibit smoking on National Health Service premises; and for connected purposes.
It is fabulous to have a full House, Mr Speaker. How marvellous.
This is a Bill that I hope is simple in its terms, can forge the support of as much of this House as possible and can bring us in line with the intentions of the Welsh and Scottish Parliaments—a Bill that would give our NHS trusts the legal back-up to ban smoking on their grounds, which I believe would be to the benefit of patients, visitors, staff, trusts and society more widely. During my contribution I will try to convince Members of its benefits, but I am not naïve. I am aware that some Members, indeed some commentators too, will have already written this off as some sort of attempted nanny state intervention that will only seek to cruelly deny unwell people the so-called pleasure of smoking a cigarette. I know I have my work cut out for me, so let us start at the beginning.
Our country has taken great steps in raising public awareness about the risks and harm of smoking. Those warnings are rightfully embedded in our education system. I doubt there are many children who would not know that smoking is linked to cancer and other life-threatening conditions. Most recently, Britain introduced plain packaging for cigarettes. Advertising by cigarette companies is also banned. This House has a history of introducing legislation to reduce the proliferation of smokers, including limits on where people can smoke. Work locations and public buildings both have bans in place. If there is a roof, you cannot spark up. You cannot smoke in cars with children. Yet, think about your last visit to a hospital, whether as a patient or a visitor. Why is it that, in order to reach the hospital, a place that by its very purpose should be a leading light of health and wellbeing, the chances are that you are forced to walk through great plumes of smoke to reach your location, with cigarette butts and litter filling wall-mounted bins? That scene is more than likely replicated day in, day out.
The inspiration for my Bill came from the Mid Yorkshire Hospitals NHS Trust, which serves my constituents in Batley and Spen and people across mid-Yorkshire. On a recent service visit, I was deeply concerned to hear of the havoc that smoking on the premises can cause. As I go through some of the arguments for legally outlawing smoking on NHS grounds, keep in mind that smoking is already banned on those premises, and that smokers are already defying the rules of the hospital. This Bill is about putting that in legislation.
The Mid Yorkshire Hospitals NHS Trust has told me—and I have experienced this—about the unpleasant stench of smoke when people enter and exit the building. Staff face abuse when asking smokers to put out their cigarettes. The ethics of hospitals as health promoters is undermined. I also suggest that it makes the enforcement of other rules, such as bringing alcohol on to the premises, much more difficult. Smokers congregating outside the entrance cause congestion and block access for less mobile or disabled visitors, and that is significantly worse in bad weather.
If smoking is a free-for-all as soon as visitors hit the fresh air, that affects services, too. Our hard-working and over-stretched staff are asked to escort patients outside and wait with them while they smoke, and staff are taken away from duties to let patients back into the ward after smoking. Wheelchairs are difficult to find as smokers use them, and volunteers, who have given up their time, are subject to complaints from members of the public as they walk through smokers to reach the entrance. One of the trust’s neonatal wards cannot even open the windows because smoke would come in. Just think of the risk to newborn babies and patients with breathing difficulties.
In short, the case is compelling from that one trust, but we will not achieve smoke-free hospital grounds without legislation. [Interruption.]
Order. The hon. Lady is a distinguished actress and has a voice that projects, but it seems to me that the House is rather irreverent. What she is saying on this matter should be heard.
Thank you, Mr Speaker.
A senior member of NHS staff, who will remain unnamed, said to me that we do not let alcoholics drink White Lightning, so why do we let smokers damage their recovery? Of course, the trust has not been idly waiting for legislation. It has introduced a speaker system to inform smokers where they should not be smoking, and has even brought in a fruit and vegetable store to promote healthy eating, but sadly people smoke in front of it.
This issue is about much more than just mid-Yorkshire. I am calling for legislative support for all NHS trusts seeking to implement the Government’s smokeless NHS debate initiative, as laid out in the 2017 tobacco control plan for England. This is about more than simply installing no-smoking signs; it is about creating a culture that is in favour of quitting. I want this legislation to be part of a package that includes support to help smokers quit or abstain. They should receive encouragement to do so while on hospital grounds. Smoke-free policies should be communicated before appointments; staff should be given stop-smoking training; carers, families and visitors should have cessation advice; and, crucially, patients who smoke should be identified so they can be given support to stop. That is the whole package that I want to see implemented, but while we wait for legislation there are a number of things that I believe we should be doing now.
I gently say to NHS England that it would be welcome to see it produce guidance on smoke-free NHS policy, alongside implementation procedure. Such a step would strengthen the message to trusts that smoke-free policies are an essential part of their operation and would be a very welcome push towards a smoke-free NHS. I say this to Ministers: I am aware that the prevention Green Paper is on its way and this Bill might be the opportunity to implement that legislation.
At the start of my speech, I mentioned the Scottish and Welsh Governments. In Wales, legislation to ban smoking on hospital grounds is expected to be implemented this summer. In Scotland, legislation has been passed giving Ministers the power to designate a perimeter around hospital buildings within which smoking is prohibited. This Bill would be an example of this House taking a lead from the devolved Administrations where appropriate. We should never be shy of doing that. It is worth remembering that the smoking population inside hospitals is higher than it is among the general public and that illnesses can be a major factor in quitting. Let us support people in the first hours and days of kicking the habit.
I know that, for some Members, the provision of support will depend on cold, hard cash. They will be relieved to know that a full implementation of smoke-free policies on the Royal College of Physicians estate would deliver a net saving to the NHS of up to £60 million within one year and greater savings in the long term. Let us not lose sight of the immediate benefits. Even following diagnosis of lung cancer, people who quit have a significantly lower risk of mortality and cancer recurrence.
Although the number of smokers is reducing, it remains a serious menace in my constituency of Batley and Spen. In Kirklees, we have a higher than average number of smokers—17.1%—and in Yorkshire it is 17%. In England, the average is 14.9%. Sadly, 12.6% of pregnant women smoke at the time of delivery in Kirklees; the national average is just over 10%. According to Public Health England, between 2015 and 2017, there were 4,439 smoking-related hospital admissions in Kirklees—again, that is above average. In the same period, there were sadly 1,942 deaths attributable to smoking in Kirklees.
The need for this measure is obvious. We still have our work cut out for us. I am not saying that the Bill will magically reduce the number of smokers. Although I am aware of the hard work carried out on cessation programmes at the Mid Yorkshire Hospitals NHS Trust, we all need to do our part to make hospital grounds smoke-free, take the burden off our NHS staff and create a more pleasant experience for patients and businesses alike.
This is an incredibly simple Bill of the kind introduced in Scotland and Wales. I hope it will be implemented with ease.
Question put and agreed to.
That Tracy Brabin, Mary Creagh, Mrs Sharon Hodgson, Bambos Charalambous, Thelma Walker, Yasmin Qureshi, Paula Sherriff, Holly Lynch and Dr Rosena Allin-Khan present the Bill.
Tracy Brabin accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 15 March, and to be printed (Bill 327).
Business of the House (Today)
That, at this day’s sitting, the Speaker shall put the questions necessary to dispose of proceedings on the motion tabled under section 13(6)(a) and 13(11)(b)(i) of the European Union (Withdrawal) Act 2018 in the name of the Prime Minister not later than 7.00pm; such questions shall include the questions on any amendments selected by the Speaker which may then be moved; the questions may be put after the moment of interruption; and Standing Order No. 16 (Proceedings under an Act or on European Union documents) and Standing Order No. 41A (Deferred divisions) shall not apply.—(Michelle Donelan.)
European Union (Withdrawal) Act 2018
[Relevant documents: Eleventh Report from the Exiting the European Union Committee, Response to the vote on the Withdrawal Agreement and Political Declaration: Options for Parliament, HC 1902; and Twelfth Report from the Exiting the European Union Committee, Response to the vote on the Withdrawal Agreement and Political Declaration: Assessing the Options, HC 1908.]
I have provisionally selected the following amendments in the following order: (a) in the name of the Leader of the Opposition, Jeremy Corbyn; (o) in the name of the right hon. Member for Ross, Skye and Lochaber, Mr Ian Blackford; (g) in the name of the right hon. and learned Member for Beaconsfield, Dominic Grieve; (b) in the name of the right hon. Member for Normanton, Pontefract and Castleford, Yvette Cooper; (j) in the name of the hon. Member for Leeds West, Rachel Reeves; (i) in the name of the right hon. Member for Meriden, Dame Caroline Spelman; and (n) in the name of the hon. Member for Altrincham and Sale West, Sir Graham Brady. Reference may be made in debate to any of the amendments on the Order Paper, including those I have not selected.
For the benefit of right hon. and hon. Members, and of those observing our proceedings, I will set out concisely what will happen at the end of today’s debate. At 7 o’clock, I will first invite the Leader of the Opposition to move his amendment. If his amendment (a) is agreed to, amendment (o) falls, and I will invite the right hon. and learned Member for Beaconsfield to move his amendment (g), and so on down the list. If amendment (a) is disagreed to, I will invite the right hon. Member for Ross, Skye and Lochaber to move his amendment (o). When amendment (o) has been decided, we will move to amendment (g), and so on down the list. If amendment (b) is agreed to, amendment (j) falls. At the end, I will put to the House the original question in the name of the Prime Minister, as amended, if amendments have been made, or in its original form, if no amendments have been agreed. To move the main motion, I call the Prime Minister.
I beg to move,
That this House, in accordance with the provisions of section 13(6)(a) and 13(11)(b)(i) and 13(13)(b) of the European Union (Withdrawal) Act 2018, has considered the Written Statement titled “Statement under Section 13(4) of the European Union (Withdrawal) Act 2018” and made on 21 January 2019, and the Written Statement titled “Statement under Section 13(11)(a) of the European Union (Withdrawal) Act 2018”and made on 24 January 2019.
Over the past few weeks, this House has left no one in any doubt about what it does not want. It does not want to leave the EU without a deal, because that would hurt our economy and disrupt people’s lives. It does not want to hold a general election, because it would waste time, increase division and solve none of the problems we face. Indeed, this House renewed its confidence in Her Majesty’s Government a fortnight ago. Neither do I see anything approaching a majority across the House to hold a second referendum. Indeed, the leaders of the so-called “People’s Vote” campaign obviously agree with me, because they declined even to table an amendment to put that into effect. I also accept, however, that this House does not want the deal I put before it in the form it currently exists. The vote was decisive, and I listened.
The world knows what this House does not want. Today, we need to send an emphatic message about what we do want. I believe that that must include honouring the votes of our fellow citizens and completing the democratic process that began when this House voted overwhelmingly to hold the referendum and then voted to trigger article 50 and which saw the vast majority of us elected on manifestos pledging to see Brexit through.
At the November European Council, the Prime Minister pleaded with other European leaders, telling them that her deal was not only the best deal but the only possible deal—a statement she repeated time and again, including in this House. We now hear from her spokespeople at No. 10 that she wants to rip up the withdrawal agreement and open up the whole process again. Why would other European leaders agree to that?
I gently suggest that the hon. Gentleman listen to my speech before asking questions of that sort.
Seeing Brexit through means reaching an agreement that works for this country and our people and for the other 27 nations of the European Union, including our nearest neighbour, Ireland. It means listening to the message being sent by the great manufacturing firms that employ millions of our constituents that they need an implementation period and a free trade area with our nearest market. It means protecting the security partnerships that keep us safe. It means caring about every part of this United Kingdom, including the people of Northern Ireland, who should be just as much the concern of each one of us in this Union Parliament as their fellow citizens in England, Scotland and Wales. We need a good deal that sets us on course for a bright future.
That is what I believe this House wants. It is what this Government want, it is what I want, and it is what the British people want. Today, we have the chance to show the European Union what it will take to get a deal through this House of Commons and to move beyond the confusion, division and uncertainty that now hangs over us and on to the bright, new, close, open relationship we want to build and can build with our European friends in the years ahead.
The Prime Minister knows that her Treasury analysis shows that every single plan for Brexit makes us poorer. If she is confident of her plan, will she publish it?
We published an economic analysis, along with other analyses, and they showed that the Government’s proposal was the best deal for honouring the referendum and providing protection for jobs and the economy in this country. I know the hon. Gentleman does not agree, because he does not want to honour the referendum result, but I think it is our duty to honour it.
The Prime Minister has had some strong words for the House for not forming an alternative consensus to her deal, but she is now supporting the Brady amendment, and so will be voting against her own deal. How does she expect the House to provide an alternative when she is voting against her own deal?
Time and again, Opposition Members have stood up and asked me to listen to the House. Now I come to the House having listened to the House, and Members say I should not have.
The way to make clear what it will take to agree a deal is to reject the amendments that state and restate once again what we do not want and back instead the amendment that shows what this House needs in order to agree a deal.
The Prime Minister is absolutely right about honouring the referendum result. Millions of people across the north of England voted in huge numbers to leave the EU, and many of them went out and re-elected Labour MPs who stood on a solemn commitment to make good on the referendum result. Is it not the case that if any Member of Parliament representing a northern leave constituency votes for amendment (b) this evening, they will be voting to dishonour the referendum result?
My hon. Friend makes an important point. It is up to every Member to remember the manifesto on which they were elected. Some 80% of the votes cast at the general election were cast for parties that said they would honour the referendum result, and that is what we need to do, and we can honour it by showing tonight what it will take to enable this House to agree a deal on the basis of which we can leave the EU.
The Prime Minister now no longer favours the backstop arrangement she negotiated and instead is in favour of alternative arrangements. Will she set out for the House what those alternative arrangements are?
The right hon. Gentleman refers to alternative arrangements as if it is a phrase that has suddenly come into use. As I will mention later, the deal we negotiated allows for alternative arrangements.
I would like to turn to the amendments. I appreciate the spirit of the amendment tabled by my right hon. Friend the Member for Meriden (Dame Caroline Spelman). I, too, want to avoid leaving without a deal. I have heard the concerns and anxieties of businesses and families around the country who worry about what would happen if we left without a deal, and I do not want to put at risk all the hard work that has seen this Government deliver record high employment; the joint lowest unemployment in 45 years and wages growing at their fastest rate in a decade.
That said, my right hon. Friend’s amendment is missing the other half of the equation, for unless we are to end up with no Brexit at all, the only way to avoid no deal is to agree a deal. That is why I want to go back to Brussels with the clearest possible mandate to secure a deal that this House can support. That means sending the clearest possible message not about what the House does not want, but about what we do want.
Will the Prime Minister give way?
I am just going to make a little more progress. I am always generous in taking interventions, as the hon. Gentleman knows.
I know that some Members have been concerned that this debate could be the last chance to vote on their desire to avoid a no deal, so I want to reassure the House that it is not. We will bring a revised deal back to the House for a second meaningful vote as soon as we possibly can.
Will the Prime Minister give way?
If the hon. Gentleman wants to comment on what I am saying about the process that the Government will follow, I suggest that he should wait until I have completed what I am saying. [Interruption.]
Order. Let me very gently say to the hon. Member for Perth and North Perthshire (Pete Wishart) and his hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) that both of them are very senior figures in the land, as Chairs of important Select Committees of the House, and they should behave with the decorum that befits their high status.
First of all, as I have said, we will bring a revised deal back to this House for a second meaningful vote as soon as we possibly can. While we will want the House to support that deal, if it did not, we would—just as before—table an amendable motion for debate the next day. Furthermore, if we have not brought a revised deal back to this House by Wednesday 13 February, we will make a statement and, again, table an amendable motion for debate the next day. So the House will have a further opportunity to revisit this question of leaving without a deal. Today, we can and must instead focus all our efforts on securing a good deal with the EU that enables us to leave in a smooth and orderly way on 29 March.
The Prime Minister is, of course, right that there is more clarity about what the House does not want than about what it does want, but in order to get that clarity about what the House wants, why will she not agree to a series of indicative votes on all the substantive options before us—not the process but the substance, including a comprehensive customs union?
The hon. Lady and others—indeed, Members on her party’s Front Bench—had the opportunity to table indicative votes. Did they do so? No. They tabled something that said, “Well, what’s the answer? Let’s have a few more votes in the future, possibly, maybe, if we think that it might be useful at some stage.”
This morning there was some kite-flying about a so-called Tory Brexit compromise which would still take Scotland out of the EU, would probably require an extension of article 50, and proposes what has already been ruled out. Does that not further emphasise the fact that this Prime Minister’s Brexit policy has been about the Tory party, first, last and always?
My Brexit policy, and the policy of the Government, has been about the vote that took place in 2016 in the referendum, and about delivering on leaving the European Union.
Does the Prime Minister agree that it is important for us to honour the referendum and the vote of 2016? Will she rule out any extension of article 50 and any wrecking tactics from the Labour party, and make sure that we leave on 29 March?
I absolutely agree that we need to deliver on the result of the referendum. Let me add that when people talk about things such as delaying article 50, that does not resolve the issue of what deal we should have in leaving the European Union. What we can do today is send a clear message to Brussels about what the House wants to see changing in the withdrawal agreement in order to be able to support it.
I will give way to the hon. Member for Nottingham East (Mr Leslie), and then I will relent and give way to the hon. Member for Perth and North Perthshire (Pete Wishart).
I want to find out what has changed since the Prime Minister said to the House just a fortnight ago:
“some…wanted to see changes to the withdrawal agreement, a unilateral exit mechanism from the backstop, an end date or rejecting the backstop…The simple truth is that the EU was not prepared to agree to this and rejecting the backstop…means no deal.”—[Official Report, 14 January 2019; Vol. 652, c. 826.]
Does she still agree with herself?
If the hon. Gentleman will wait, I shall come on to talk about the issue of the backstop. We retain absolutely our commitment to a way of ensuring that we deliver on the commitment to no hard border between Northern Ireland and Ireland. However, the hon. Gentleman may have noticed that actually we lost a vote, and we have been listening to Members on both sides of the House. The hon. Gentleman and his right hon. and hon. Friends say to me that I must recognise that we lost a vote. Yes, that is why we are here, looking at what it will take to ensure that we get a deal through the House.
I said to the hon. Gentleman that I would give way.
I am very grateful to the Prime Minister for relenting. She is just about to rip up her backstop, and we are all wishing that she would get on with it and tell the House exactly what she plans to do. That involves an agreement—[Interruption.] Hold on a minute. That involves an agreement—[Interruption.]
Order. I know that Conservative Members find the hon. Gentleman mildly provocative—[Laughter] —and no, he is not in an isolated category in that regard—but he must be heard.
Thank you, Mr Speaker. I shall continue to be mildly provocative, if I can, by asking the following question. This is an agreement with the European Union. What happens when the European Union says no to the Prime Minister again?
The first step in all this is for the House to make clear what it wants to see in relation to changes. The hon. Gentleman says that he wants me to get on with it and actually talk about what I want to talk about. If he were not jumping up and down all the time, I might be able to get on with it.
Let me now turn to the amendments from my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve) and the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). I understand the concerns that led to the tabling of the amendments, but I have the most profound doubts about the consequences to which they would lead.
Both amendments seek to create and exploit mechanisms that would allow Parliament to usurp the proper role of the Executive. Such actions would be unprecedented, and could have far-reaching and long-term implications for the way in which the United Kingdom is governed and the balance of powers and responsibilities in our democratic institutions. I am sure that, as former Ministers of the Crown, both Members must know that. So, while I do not question their sincerity in trying to avoid a no-deal Brexit, to seek to achieve that through such means is, I believe, deeply misguided, and not a responsible course of action.
Furthermore, neither amendment actually delivers on the best way of avoiding no deal, which is, as I have said, for the House to approve a deal with the European Union. The amendment tabled by my right hon. and learned Friend would see six full days given over to debates and votes on alternative plans, on which we could have voted today. With just 59 days left before we are due to leave the European Union, the way in which to deliver Brexit and avoid a no deal is to focus all our energies and time on getting a revised deal that both the House and the European Union can agree to support.
Does the Prime Minister not understand that the reason we are in this mess is that she chose to go and negotiate without first commanding the support of a majority in the House? Does she also not understand that, whether we are talking about the option that has been put forward by her Back Benchers or other options, she will need two things for that to succeed—time, and the opportunity for the House to agree on the negotiating mandate? The amendments provide that time and that opportunity. Why is the Prime Minister opposing them?
The hon. Gentleman has an opportunity today to agree the negotiating mandate for going back to Brussels by supporting the amendment tabled by my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady).
My right hon. Friend will have seen that the amendment that I tabled goes solely to process, not to outcome. But is it not the case that the House has never had a proper opportunity to debate options, and to do it in a reasoned way? What the Prime Minister is asking the House to do again today is to suddenly adopt a measure that the Government have signed up to at the last moment, and to say that that should be the route we should take. Surely that illustrates the precise problem that the House has had throughout. Let me make it clear to my right hon. Friend that the purpose of my amendment is to give the House the space in which to find where the majority lies, and I commend it to her.
Let me say first that we have that opportunity today. I, and others, have been listening and talking to Members on both sides of the House about the issues that they have raised—apart from the Leader of the Opposition, who did not want to come and talk to me. I shall mention a number of those issues later in my speech, but one of them, which has been raised consistently by Members, is the backstop. We have an opportunity to give a clear message to the European Union on this matter today, and I also say to my right hon. and learned Friend that I am sure he has thought through very carefully the longer-term implications of the moves proposed tonight in the amendments that he and the right hon. Member for Normanton, Pontefract and Castleford have put forward and the implications they have for the relationship between the Executive and Parliament in the future.
Does the Prime Minister also get the idea that the European Union too wants to do a deal with the United Kingdom? We have a £95 billion deficit with it, the Germans sell us 850,000 cars every year, we buy 20% of all the prosecco produced in Italy: does she agree with me that the European Union wishes to carry on trading with the United Kingdom in the way it currently does?
I am going to reference this later on, and I think there is a willingness on the other side—the European Union—to agree a deal with the UK, but what it clearly said when the meaningful vote was lost was that it wanted to know what the UK wanted to see happening in relation to the deal, and that is an opportunity that we have today.
I will give way to the hon. Member for North Down (Lady Hermon) and then I will make some progress.
I am grateful to the Prime Minister for allowing me to intervene at this early stage.
The Prime Minister is trying to encourage this House to vote for an amendment that uses the words
“alternative arrangements to avoid a hard border”
on the island of Ireland. Forgive me, Prime Minister, if I say that those words are nebulous. They are nebulous; the Prime Minister has a duty to spell out to this House before we vote what those alternative arrangements are, and how on earth the other 27 EU member states are expected to agree to this revised arrangement before Brexit date on 29 March.