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House of Commons Hansard
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Oral Answers to Questions
29 January 2019
Volume 653

Treasury

The Chancellor of the Exchequer was asked—

Economic Growth: Yorkshire

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1. What recent assessment he has made of trends in economic growth in Yorkshire. [908864]

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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%.

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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?

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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.

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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?

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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.

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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?

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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.

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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?

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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

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2. What steps he is taking to encourage the creation of new businesses. [908865]

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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21. If Brexit goes ahead, what plans has the Chancellor made to compensate firms in Scotland, such as the live transport of shellfish and seed potatoes industry, which will suffer losses because of delays at the ports? [908884]

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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.

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I note that “Barnett” has now become a verb, and we are grateful to the Minister for his ingenuity.

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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?

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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.

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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.

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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.

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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?

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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.

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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?

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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.

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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?

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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

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3. What steps he is taking to increase earnings for the lowest paid. [908866]

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4. What steps he is taking to increase earnings for the lowest paid. [908867]

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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.

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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?

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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”

that

“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.

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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?

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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.

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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?

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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.

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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?

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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.

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24.    The Chancellor has actually already answered my question. What assessment has he made of the effect on the lowest pay of meeting our manifesto commitment to cut personal allowance a year early, which in effect has almost doubled the tax-free allowance under the Conservatives? [908887]

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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.

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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?

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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

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5. What assessment he has made of the potential effect on consumer prices of new non-tariff barriers in the event that the UK leaves the EU without a deal. [908868]

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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.

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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?

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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.

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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?

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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.

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20.   The CBI and many others have warned that leaving the EU with no deal will exacerbate existing regional economic inequalities. The north-west alone is predicted to lose £20 billion a year in a no-deal scenario. That will, of course, impact on jobs, not least the 350,000 that are linked to EU exports, 14,000 of which are in my constituency of Oldham East and Saddleworth. So will the Chancellor and the Government as a whole once and for all rule out a no-deal Brexit scenario, which would harm the country as a whole and particularly my constituents and the north? [908883]

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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.

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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?

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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.

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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?

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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

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6. What discussions he has had with the Secretary of State for Scotland on the economic effect on Scotland of the UK leaving the EU Customs Union and single market. [908869]

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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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?

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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.

Deficit Reduction

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7. What progress his Department has made on reducing the deficit since 2010. [908870]

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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.

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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?

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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.

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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?

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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.

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You’re the Chancellor of the Exchequer. You should have made it yourself.

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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.

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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?

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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.

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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?

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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.

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18. Does my right hon. Friend agree that we would be paying off the deficit even more quickly if companies such as Starbucks and Amazon paid a fair share of tax? Is that a point that he might be willing to make to their bosses next time they get on the phone to him to complain about Brexit? [908881]

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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.

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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?

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The Labour party will have to get its act together, and organise a discussion between its Front Benches and its Back Benches.

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You ought to get your act together.

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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.

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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?

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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

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8. What plans the Government have to make capital funding available for new hospitals. [908871]

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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.

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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?

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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.

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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.

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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.

Child Poverty

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9. What plans he has to tackle child poverty. [908872]

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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.

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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?

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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.

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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.

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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.

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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.

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12. Does my right hon. Friend the Minister agree that the effective marginal tax rate of 73% for one-earner married couple families with two children at 75% of the average wage is too high and should be brought down to the OECD average of about 33%? [908875]

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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.

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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?

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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

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10. What recent contingency plans he has made to prepare for the UK leaving the EU without a deal. [908873]

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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.

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And worth every penny, isn’t it? How much in total is the Chancellor spending on delivering the people’s decision?

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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.

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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?

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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.

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We are running out of time, so we need one-sentence questions.

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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.

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That was absolutely hopelessly long.

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My hon. Friend demonstrates ingenuity and she is absolutely right: the nuclear sector deal is very important.

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15.   Some £16 billion to £20 billion of private sector investment has been taken out of north Wales because of the suspension of the nuclear project. Will the Chancellor meet me and other MPs from north Wales to discuss the north Wales growth deal, which was put in place before that dreadful announcement? [908878]

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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

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11. What discussions he has had with the Secretary of State for Exiting the European Union on the Bank of England’s forecasts for the economy after the UK leaves the EU. [908874]

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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.

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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?

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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.

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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?

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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

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13. If he will take steps to prevent the 2019 loan charge from being applied retrospectively. [908876]

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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.

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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?

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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.

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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?

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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

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14. What recent discussions he has had with the Secretary of State for Education on the adequacy of funding for adult education. [908877]

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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.

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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?

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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.

Topical Questions

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T1. If he will make a statement on his departmental responsibilities. [908889]

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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T3. The Chancellor will know that the great county of Essex is underfunded, on per capita measures, for education, health and policing, so will he use the forthcoming comprehensive spending review to ensure that Essex is at the top of the list so we can make sure that our services are well funded? [908891]

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There is a lot to be said for Essex. The right hon. Lady and I can agree about that.

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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.

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T2. In the north, we face years of disruption on the trans-Pennine line, but there is no money for electrification. In London, the Government bail-out Crossrail to the tune of £1.4 billion, in addition to what they have already spent. When is the Chancellor going to act to tackle these inequalities in transport infrastructure spending, which are damaging the economies of the north of England? [908890]

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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.

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T7. Will the Chancellor give a firm commitment that debts owed to major Departments such as Her Majesty’s Revenue and Customs and the Department for Work and Pensions will fall within the breathing space scheme? [908895]

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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.

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T4. What discussions has the Chancellor had with the Transport Secretary about the economic impact of a no deal on cities that have regional ports? [908892]

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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.

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T8. What is the Minister’s estimate of new start-ups in the creative industries and of their contribution to the economy? [908896]

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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.

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T5.   Constituents such as mine are facing large retrospective bills because of the loan charge. What plans does HMRC have to litigate against those who have disguised remuneration arrangements since 2016? [908893]

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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.

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T10. Forecasting has had a bad rap recently from some people. Will the Chancellor therefore join me in welcoming a report from Commerce Bank which found that economic forecasting is more accurate now than it has been for most of the past 30 years? [908898]

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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.

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T6. It is Independent Venue Week. Such venues are the research and development to a £4.5 billion music industry, but a third of them have closed in the past decade. Why is the Chancellor, who has Runnymede Jazz Club in his constituency, giving a rates discount to pubs but not to music venues? Will he look at that again? [908894]

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Let us hear about the jazz situation in Runnymede.

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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.

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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?

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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.

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T9. Last week, in an absolute hammer blow to the east end of Glasgow, Santander announced that it was closing the Parkhead branch and abandoning the east end. So when I meet Santander bosses this afternoon, can I have the UK Government’s support in saying that they should keep our branches open, rather than waffle about post offices? Will the Minister give a clear, unequivocal message at that Dispatch Box to save our Santander? [908897]

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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.

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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?

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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.

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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?

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A consultation is under way that I believe ends on 13 February. Once it is complete, the Government will consider it.

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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?

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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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.

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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?

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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.

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When will the Chancellor give some much-needed money to our police forces?

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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.

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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?

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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.

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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.

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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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?

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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.

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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.

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No, I think that the Minister said a business every 75 seconds.

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But is it true?

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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.

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Further to that point of order, Mr Speaker.

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In deference to the seniority of the hon. Gentleman, I will hear his point of order if he insists.

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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.]

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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.