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Oral Answers to Questions

Volume 655: debated on Tuesday 5 March 2019


The Chancellor of the Exchequer was asked—

Infrastructure Funding: Devon and Cornwall

The Government are increasing our national investment in infrastructure to the highest sustained level since the 1970s. In Devon, this will include £83 million towards the widening of part of the north Devon link road, and in Cornwall £78 million towards the St Austell link road.

Mr Speaker, may I wish Cornish Members gool Peran lowen—a very happy St Piran’s day?

I thank my hon. Friend for his answer, although my Cornish is not quite up to his level, given that I am a Devon Member.

The recent announcement of £80 million of funding for major resilience work at Dawlish was very welcome. Can my hon. Friend confirm that this is the first part of the investment plan and that the Government will provide additional investment as further aspects of the plan to secure our key rail infrastructure come forward?

We are fully committed to rail resilience in the south-west, and the Chancellor restated this as a national priority in the Budget Red Book. As my hon. Friend has said, we are investing up to £80 million in the new seawall to provide greater protection to the railway at Dawlish. Network Rail is providing the further options he mentions to protect the line from extreme weather and improve the rail network for passengers in the south-west, and of course we will consider those proposals when we receive them.

Added rail resilience at Dawlish is really important for the far south-west to keep our train line open, but so is added road resilience. Can the Minister set out what additional funding he can put in place to make sure that the A38 is a safer road? At the moment, there are far too many delays and sadly far too many people die on it?

The hon. Gentleman raises an important point. By our decision to hypothecate vehicle excise duty, we have created the largest ever investment in our strategic road network, which could perhaps fund projects such as the one he raises. Additionally, our £2.7 billion transforming cities fund will support Plymouth and its surrounding areas in particular.

Meur ras, Mr Speaker. Gool Peran lowen—happy St Piran’s day—and Kernow bys vyken!

The announcement yesterday on the stronger towns fund did not include any areas from Cornwall, yet Cornwall has always scored very highly on social deprivation and funding. I know that the coastal communities fund has been a help, but what assurance can I have from the Treasury that it will support towns in my area?

The stronger towns fund announced this week will provide support for the south-west and all regions of the country, both in terms of direct funding to be paid to local enterprise partnerships and the competitive fund of £600 million that towns in the my hon. Friend’s constituency and those of other right hon. and hon. Members across the country should bid into.

The port of Brixham in my constituency lands the most valuable catch in England, but it has now reached capacity and needs urgent infrastructure investment to expand opportunities. Will the Minister assure me that our strategically important fishing industry and processing sectors will be fully considered in future infrastructure plans, and will he meet me to discuss Brixham port’s exciting plans for development, which need only modest investment to help them get rapidly off the ground?

I would be happy to meet the hon. Lady. We are investing in port infrastructure, as indeed in other infrastructure projects across the south-west. I believe it was she who asked the Chancellor in the lead-up to the Budget to make that national commitment to Dawlish, for example. We are keen to listen to her opinions in this respect, and I would be very happy to meet her.

Money Laundering

The Government have made a very strong commitment to tackling money laundering. Recent initiatives include the creation of the economic crime strategic board and the National Economic Crime Centre. We have also strengthened anti-money laundering supervision through the creation of the Office for Professional Body Anti-Money Laundering Supervision, and we are reforming suspicious activity reports and tackling the abuse of Scottish limited partnerships.

The Economic Secretary to the Treasury knows better than most of us about the nefarious impact of Russia, and I send my best wishes to his constituency, to the Skripals and, most of all, to the family and friends of Dawn Sturgess, one year after the Salisbury attack.

Yesterday, Prince Charles ended up being drawn into the troika laundromat scandal, with money linked via a maze of shell companies back to the Magnitsky case. Criminal and legitimate money is sloshing around together in our banking system. What are the Government doing to close the loopholes and stop legitimising the proceeds of kleptocracy?

I thank the hon. Lady for her kind remarks about my constituency. I am familiar with the reports that appeared in The Guardian yesterday evening about the case to which she has referred. Following the response by the Financial Action Task Force to a two-year review of our standards in the United Kingdom, the Government recognise that we are world leaders in this regard, but there are some outstanding concerns about reports of suspicious activity in the banking sector. Work is ongoing, and I will take a close interest in it.

Can the Minister quantify the amount of extra tax that the Government have collected since 2010 that would otherwise have been unpaid, as a result of the measures they have taken to tackle money laundering?

I cannot give my hon. Friend the exact figure, but we are anxious to crack down on suspicious activity when reports give us reason to believe that further measures are necessary. We have taken action in improving cross-governmental co-ordination, and we are working closely with the Home Office on the suspicious activity reports.

The Financial Secretary was unable to answer this question yesterday, so I shall ask it again. Can the Economic Secretary explain why, although the call for evidence on extending corporate liability for economic crime closed two years ago, we have yet to receive a response or see any action?

The Ministry of Justice is looking at that, and will present its response to the call for evidence later this year.

May I suggest that the answer to the question from my hon. Friend the Member for Kettering (Mr Hollobone) is £185 billion?

I always take my right hon. Friend’s words very seriously, and I am sure that he must be right.

Britain is now a world leader in financial transparency and dealing with money laundering owing to the public register of beneficial ownership. What action do the Government propose to take to stop those standards being undermined by Crown dependencies, which rely on the British passport and British defence protection, but operate in a much more opaque manner?

We are committed to introducing those registers by 2023. Since 2017, we have worked closely with law enforcement agencies through the mechanism of the exchange of notes with the overseas territories, and that has led us to unexplained wealth orders and the forfeiture of bank accounts.

New Technologies

The Government are determined to ensure that the UK is at the forefront of the development of new technologies. Since 2016, I have committed £7 billion more—a 20% uplift —for research and development, thus demonstrating clear progress towards the Government’s ambition to raise investment in R&D to 2.4% of GDP by 2027. Among other things, those funds are supporting a £305 million national quantum technology programme and a £950 million artificial intelligence sector deal, and there is £250 million for connected and autonomous vehicles.

Small modular reactors could bring a wealth of economic, environmental and social benefits. Will the Chancellor confirm that he supports their merits, and that there will be financial and policy support to ensure that they succeed?

The Government do indeed recognise the potential for the UK to become a leader in the development of the next generation of nuclear technologies, provided that there is demonstrable value for money for consumers and taxpayers. To that end, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is considering an industrial strategy challenge fund proposal for small modular reactors and whether it would provide value for money.

I do not know whether you are aware, Mr Speaker, that up to 50 different metals may be used in a smartphone. What fiscal support could be given to the excellent work done by Birmingham University in addressing the rareness of those materials, as well as the recycling and reuse of batteries?

My hon. Friend is right. Rare earths and other critical elements are at the centre of the electronics industry, which now defines our modern life. Some of the materials are very scarce, and recycling the large amounts that are already in use in batteries is crucial. In the 2017 spring Budget I announced the £246 million Faraday battery challenge, to be funded from the national productivity investment fund. Supported by the fund, the University of Birmingham, together with industry partners, is leading the way in developing new methods of recycling lithium batteries, which power so many of the objects that we use in our everyday lives.

Quantum technology is one of the most mission-critical technologies being developed today, and so far much of the work has been done at research level. How do the Government intend to help leading British companies such as Teledyne e2v in Chelmsford to commercialise this activity, to ensure that quantum technology remains based in the UK?

I knew Chelmsford was going to get in there somewhere.

The additional £7 billion I mentioned earlier is focused on applied research and industry innovation and the commercialisation of the UK’s world-leading science base. Quantum technologies have the potential to be transformative, and the UK is a global leader, so last autumn I committed £315 million for a second phase of the UK’s landmark national quantum technology programme. This investment includes a £70 million industrial strategy challenge fund, which will help leading UK firms such as Teledyne accelerate getting their products to the market.

The Chancellor knows very well that Huddersfield in the Leeds city region is a hotspot for new technology and innovation and a tech centre, but many people in Huddersfield and Leeds are demoralised by the future and leaving the European Union. What can the Chancellor do to give them some hope that there is a future for their businesses and universities?

I am well aware that Huddersfield, like Chelmsford, is a leading centre of industry and technology development. Many of our towns and cities that have traditionally been centres of manufacturing are changing very fast in response to the changing nature of manufacturing industry. What I can say to the hon. Gentleman is that I will be making a spring statement to the House next week in the context of some very important decisions that the House will be making about our exit from the EU, and I will be setting out my vision for Britain’s future.

Renewables is a key future technology sector. Can the Chancellor assure the House that the growth of the offshore sector will not be limited by Government airspace protection rules, or, if it will, will the Government look to invest instead in onshore wind?

I think the hon. Lady is talking about radar interference problems with wind turbines, something I remember from my Ministry of Defence days. The Treasury and the Department for Business, Energy and Industrial Strategy will always argue robustly for protecting the economic potential of these technologies, but of course we have to look at our national security interests as well and get the balance right.

How on earth do people think that we are going to be improving the UK’s new technology position when we are on the brink in this House of committing to a disastrous Brexit that will undermine our research funding, stifle our skilled migration, hobble in some ways some of the developments in our pharmaceuticals and biotech sector, and wave goodbye to the European Medicines Agency? Is not the truth that actually our task is going to be to prevent a deterioration in our prospects as a country if we go down that route?

I understand the hon. Gentleman’s point and I know he speaks sincerely and from the heart on these matters, but my view is that we have a huge amount of pent-up investment that has not gone ahead over the last two and a half years because of uncertainty. Once we can provide clarity to British business about our future, which we do by supporting the deal that my right hon. Friend the Prime Minister will be bringing forward next week, we will unleash that investment, allowing Britain to achieve its rightful potential as one of the world’s leading technology powers.

18. New technologies enabling us to work from anywhere and at any time are bringing an end to the traditional, rapidly declining nine-to-five. To make the most of this, we need to harness such advantages to work smarter rather than just harder. How is the Treasury investing in enabling people to become more productive and to work more flexibly? (909589)

I started work in 1977 and I am not sure I ever remember that traditional nine-to-five, but the Government are helping people to be more productive and work flexibly by committing over £1 billion of public money to next-generation digital infrastructure, including full fibre broadband and 5G. Obviously, the primary investment will come from the private sector, but the public investment ensures that those parts of the country that would not otherwise be served because they are not commercial can share in this important technology. We are also supporting workplace productivity in other ways, including by investing £56 million to help small businesses to develop leadership and management skills in partnership with “be the business” programme.

I am sorry, but when it comes to funding the new technologies that really matter, this Government, and especially the Treasury, have been abysmal. The climate crisis is upon us now, but this Government’s reaction has been to axe carbon capture and storage funding; to cancel the Swansea lagoon, despite the fact that we were poised to be a world leader in tidal technology; and to slap innovative emerging storage technologies with business rates. At the same time, they are throwing billions into new tax breaks for oil and gas. Does the Chancellor agree that this Government are not facing the climate emergency but creating it?

No, we are committing additional funding to innovation and to research and development—the Faraday battery challenge is a good example—and lots of that money is going into the technologies that will underpin the decarbonisation of our economy. However, we have to get the balance right. Consumers of energy in this country do not want to see their bills rising because we have made imprudent decisions. We have to do this in a way that takes public opinion with us as we decarbonise our energy sector, our homes and our industry in a sustainable way.

20. What is my right hon. Friend doing to ensure that small and medium-sized businesses in the north-west of England are at the forefront of our ongoing technological revolution? (909591)

I recently visited the north-west of England and saw at first hand the enterprising and enthusiastic spirit of SMEs in the region. I am happy to confirm that, in the 2018 Budget, I backed locally led innovation by doubling the strength in places fund to £235 million. I also committed an additional £5 million to encourage proposals for new university enterprise zones, following a successful pilot scheme that invested £15 million in Liverpool. The made smarter pilot in the north-west is helping manufacturers to adopt digital technologies, and together these measures will ensure that businesses in the north-west can take the lead in the fourth industrial revolution.

National Living Wage: Under-25s

4. Whether his Department has undertaken an economic impact assessment of extending the national living wage to people under the age of 25. (909575)

The Low Pay Commission recommends minimum wages for the under-25s, such that they are as high as possible while maintaining young people’s employment prospects. We have seen a 45% reduction in youth unemployment since 2010 as a result.

That is lovely, but it is not actually the answer to the question I asked, which was whether an economic impact assessment had been carried out. Clearly, the answer is no. The Government obviously have an ideological problem with a fair day’s pay for a fair day’s work. Given that this is national apprenticeship week, does the right hon. Lady really think that it is acceptable to pay apprentices just £3.70 an hour in this country under UK law? Will she use the spring statement to take action to introduce a fair day’s pay for a fair day’s work? If she will not, will she devolve this to Scotland so that we can do the job for her?

The reality is that we have been so successful in reducing youth unemployment—which in 2010 was almost double what it is now—because we have taken a reasonable strategy with minimum wages. We have also had a welfare to work programme and helped young people to get experience and skills. It would be completely wrong to raise wages to the extent that young people were unemployed and unable to get the experience and skills that they need to succeed in life.

No Deal EU Exit: Job Losses

5. What discussions he has had with the Secretary of State for Business, Energy and Industrial Strategy on potential job losses as a result of the UK leaving the EU without a deal. (909576)

The Government’s analysis indicates that leaving the EU without a deal would not be good for the UK economy, which is why we are so determined as a Government to secure an appropriate deal with the European Union that can pass through this House.

There are 4,000 jobs in the manufacturing sector in Merthyr Tydfil and Rhymney. This Government have had two years to negotiate a good deal for that sector, but they have so far failed to do so. Does the Minister share my concern that Nissan’s decision to build its X-Trail in Japan, and similar decisions by Honda, are a sign of things to come as a result of this Government’s chaotic negotiations?

The chief executive of Honda has made it perfectly clear that the company’s recent decisions were not a consequence of Brexit. Other factors across the world are affecting car sales, including the switch away from diesel and, in the case of Honda, the agreement on tariffs that has been entered into between the European Union and Japan, which will mean that, after the move to Japan, exports into Japan will attract no tariffs.

Does not this underline the importance of fine-tuning the deal so that we can jettison the backstop and use existing technology and EU law to take forward the innovative Malthouse proposals, which will ensure that we can move forward and build the new Britain?

The House has made clear the basis on which it would be prepared to accept the deal negotiated with the European Union, and that will necessitate some changes to the backstop arrangements. That is what is being negotiated at the moment and it will come back to the House in due course.

17. This country’s public sector institutions spend £1 billion a year on food, and there have been many warnings that food price inflation in the event of a no-deal Brexit will make that unaffordable. What is the Minister doing to protect not just jobs in the food sector, but the people who depend on those meals? (909588)

The hon. Lady is right to raise an issue that relates to our tariff policy in the event of a no-deal Brexit. We have made it clear that we will carefully balance this, protecting consumers from unwanted price rises at the same time as using our tariff policy to provide appropriate protection to vital elements of the economy.

Cheshire-based company ABB has stated that investment in automation could result in radical improvements in cost efficiency, allowing work to move back to the UK. Will my right hon. Friend consider incentivising investment in automation through the tax system?

We have already brought in some important measures to do just that, not least by increasing the annual investment allowance from £200,000 to £1 million, as announced at the previous Budget. We keep all taxes under review and I will certainly bear my hon. Friend’s important point in mind.

In a recent survey by the Fraser of Allander Institute, 62% of Scottish businesses said that they did not feel ready for Brexit. Will the Chancellor bring forward an emergency Budget to provide support for small and medium-sized enterprises so that they can cope with the Brexit that he proposes?

My right hon. Friend the Chancellor has made it clear that, in the event of a no-deal Brexit, we will take stock of the situation and take whatever measures are necessary to ensure that we protect and support businesses throughout the United Kingdom.

I was specifically talking about the Brexit that the Chancellor is proposing, which is presumably not a no-deal Brexit, although it looks like 100,000 jobs could be lost in Scotland as a direct result of no deal. However, in relation to the deal Brexit, the Bank of England has said that unemployment could be up to 4% higher by 2023 if the Prime Minister’s deal is approved. Does the Chancellor believe that keeping his job is worth costing thousands of others?

I do not believe that the figure to which the hon. Lady refers is accurate. This Government have seen employment at a record high and unemployment at the lowest level since 1975, and youth employment is half what it was in 2010—unlike the Labour Government, who saw youth unemployment increase by almost 50%.

Road Infrastructure Funding

At the Budget, I announced an extra £420 million for road maintenance, including potholes, and £150 million to ease congestion on local roads. I also announced that, from 2020, all road tax will be invested back into our road network via a national roads fund, which will involve £28.8 billion between 2020 and 2025, including a record £25.3 billion for our strategic roads. That is part of our plan to upgrade our infrastructure so that it is fit for the future and another element of our overall public investment, which is set to reach the highest sustained level for 40 years.

I am grateful for that answer and for the continued investment in our roads, but does my right hon. Friend understand the frustration felt by my constituents, who have seen their area transformed by massive housing developments, but have not seen improvements to the local road infrastructure, particularly the A249 and the M2, to serve the new homes?

We are making good progress on improving junction 5 of the M2 and the A249 Stockbury roundabout, reducing journey times, making journeys safer and supporting future housing and employment growth. All that is in addition to recent investments from the local growth fund in Sittingbourne and Sheppey, including the opening of a new roundabout on the A2500 in December 2018, following a £1.26 million investment, and £2.5 million for the regeneration of Sittingbourne town centre.

Funding for road infrastructure is very important, but I wonder whether the Chancellor thinks it should sit alongside investment in more active travel—walking and cycling.

Both. Of course we want to encourage active travel—cycling and walking—particularly in cities where that is the most appropriate response to dealing with the twin challenges of congestion and air quality. Sheffield has benefited from funding that will allow it to enhance the offer to walkers and cyclists.

Over the last decade, we have seen a 25% increase in the number of enterprises in the fantastic county of Essex. That is despite our crumbling infrastructure and our roads. May I make an urgent plea to the Chancellor to support and invest in the two economic arteries that go through the heart of Essex and the Witham constituency—the A12 and the A120?

This is probably not the first time that my right hon. Friend has asked me about those two roads. She is a formidable champion of the transport infrastructure that runs through her constituency; I congratulate her on that. As I have just announced, we have made a commitment to hypothecate all road tax to the national roads fund. That will make a record amount of funding available for road projects in the next period.

Road traffic accidents are a major cause of acquired brain injury, so I urge the Chancellor of the Exchequer to consider setting up a special fund, in proportion to the amount that he is talking about for road infrastructure—and announce it next week, if he is still going to do his statement next Wednesday—to make sure that there is a fund available to people in the national health service who are developing very innovative ways of rehabilitating people who have had road traffic accidents. If he does not understand, he can ask his hon. Friend the Economic Secretary to the Treasury, who is very good on that.

I reassure the hon. Gentleman that I will be making a spring statement next week and remind him and the House that it is not a fiscal event under the new Budget architecture. We have put very significant additional funding into the national health service. I note the point he makes about acquired brain injury and the research that is happening on that. I will draw the Health Secretary’s attention to his comments.

The Chancellor has rightly made great play of the fact that we need to improve our productivity in this country. One of the biggest drags on productivity in my part of the world is clogged-up roads, and my part of West Yorkshire is one of the most congested parts of the UK. So will the Chancellor use money from either his productivity fund or his road-building fund to ensure that there is enough money in the kitty to progress the long-awaited, much-needed Shipley eastern bypass?

As my hon. Friend will know, we have funded a study into the Shipley bypass. It is absolutely right that, often, the highest-value road investments can be relatively modest local schemes that relieve pressure and allow town regeneration, the release of housing land and the more efficient operation of local industry. We will have a record-sized fund available through the hypothecation of vehicle excise duty.

The Member for Shipley will not stop going on about it until he gets it; I think of that we can be absolutely certain.

No Deal EU Exit: Manufacturing Sector

7. What steps his Department has taken to mitigate the potential effect on the economic sustainability of the manufacturing sector of the UK leaving the EU without a deal. (909578)

The steps we are taking to protect our manufacturing in the event of no deal include supporting the Prime Minister’s deal and the negotiations to make sure that we have a smooth exit from the European Union, and the Treasury itself has made available in excess of £4 billion by way of contingency funding for Departments right across Whitehall.

I thank the Minister for that response. Last month, I surveyed businesses in my constituency and they overwhelmingly said that they wanted Brexit cancelled. Will the Chancellor stand up for British businesses, end the uncertainty and use his immense personal prestige in the Cabinet and with the Prime Minister to stop Brexit once and for all?

It is just little old me, I am afraid, but I have to say that I believe we should respect the result of the June 2016 referendum, a democratic exercise that saw a higher turnout than for any other democratic event in the history of our country. The important thing now is that we get the right deal for us to leave, which we are working on. When it comes back to Parliament, I hope that the hon. Gentleman will support it.

21. The Chancellor has recently attended two events that I was also present at, which were organised by major aerospace companies, so he knows how they feel about the terrifying prospects of no deal. As these are the companies that pay this country’s bills, why is he ignoring them? (909592)

We are most certainly not ignoring those businesses—or indeed businesses from a variety of different sectors up and down the economy. We have been deeply engaged with business, through the Treasury, the Department for Business, Energy and Industrial Strategy and other Departments. I can assure the hon. Gentleman that, for example, on the issue of just-in-time deliveries and the flow of trade across our borders, we have done an immense amount of work to prepare for the possibility of a no-deal exit to make sure that we protect the very companies to which he refers.

Single-use Plastic Waste

8. What fiscal steps he is taking to help reduce the amount of single-use plastic waste in the environment. (909579)

We are acting to tackle single-use plastic waste at source by introducing a world-leading tax on plastic packaging. The tax, which I announced at the Budget, will provide a clear economic incentive to business to use recycled plastic and, alongside the reform of the plastic producer responsibility system by the Department for Environment, Food and Rural Affairs, it will transform the economics of sustainable packaging. The Government recently published consultations on the detail of both measures, alongside consultations on consistent waste collection and a potential deposit return scheme for beverage containers. We are determined to be the first Government who leave the environment in a better state than they found it in.

I hear what the Chancellor is saying, but in setting policy will he recognise the positive role that plastic packaging plays in reducing cost to consumers by protecting goods in transit and in reducing the environmental burden of food waste by keeping food fresher for longer?

The points my hon. Friend makes are well made, and of course this is about getting the balance right. The Government recognise that plastic packaging can play an important role, but we want to reduce the environmental impact of single-use plastic waste and encourage more sustainable forms of plastic packaging that can be recycled. The packaging tax will encourage businesses to use more recycled plastic in the production of packaging and will therefore drive a more sustainable packaging industry.

My 10-year-old constituent Emily Haines wrote to me about this issue, and she assured me she had not just copied and pasted. Indeed, when I wrote back to her by hand, her father emailed me to say that he had no idea that his daughter had written to me on this subject. So may I ask the Chancellor not to listen to those who say that he should in any way dilute what he is doing on single-use plastics? Indeed, he should do more and do as Emily says: introduce “tough new taxes” to make sure that we deal with this environmental scourge.

That is what we are doing. This will be the world’s first plastic tax and it is carefully designed to go with the grain of the market: to incentivise manufacturers to use more recycled plastic in their packaging. Because of that, it creates an effective market for packaging and, together with the producer responsibility note system, will transform the way in which plastic packaging enters the circular economy in this country.

I am pleased that the Chancellor is, apparently, taking the issue of plastic waste seriously. The Government have committed £61.4 million to global research to help to prevent plastic waste from entering the oceans. Given the challenge, is that sufficient?

It is a good start. The idea is to identify ways in which we can work with countries around the world, including many of our overseas territories, which are particularly vulnerable to this issue, to ensure that we develop effective methods of avoiding plastic waste entering the ocean. Of course the best way to do that is by ensuring that plastics are not created in the first place, or that they are effectively recycled, but avoiding dumping at sea is our No. 1 priority.

Talking of preventing waste, what with the millions wasted on the ferries fiasco, the drone debacle, the Northern rail mess, the Carillion collapse, the electronic tagging turmoil, the £2 billion East Coast chaos and, finally, £72,000 spent on defending an illegal prisoner book ban, is it not time for the Chancellor, as the custodian of the public finances, to impose a ban on the failing Secretary of State for Transport wasting any more public dosh?

I am not going to take any lectures about waste from anybody on the Opposition Front Bench. This lot are world-champion wasters of public money. They have done it before and given half a chance they will do it again.

Infrastructure Funding: Medway and Kent

The Government are committed to ensuring that Medway and, indeed, the whole of Kent have the infrastructure that they need. The South East local enterprise partnership has secured £590 million from three local growth fund rounds, to support around 30 important transport schemes in Kent and Medway.

Medway Council’s £170 million housing infrastructure bid will have a significant impact on the unlocking of regeneration in the Thames estuary, providing the extra much-needed homes, jobs and transport connectivity. Will the Minister clarify when such excellent bids will be considered and announced? By way of declaration, I am a member of Medway Council.

My hon. Friend has been raising this matter assiduously. At the spring statement in 2018, the Government announced that Medway’s housing infrastructure fund bid was shortlisted for the next stage of assessment, and we look forward to receiving the final proposal later this month. It will be considered alongside other HIF bids.

Social Care Funding

At the autumn Budget 2018, we gave councils an additional £650 million, which could be spent on adult and children’s social care. Since 2017, we have given access to up to £10 billion of dedicated adult social care funding, which has meant above-inflation rises.

Eighty-seven people in this country die each day before receiving the care that they need. Does the Minister agree that that figure is shameful and that the Chancellor should use the spring statement to tackle the funding crisis in social care?

As I pointed out, social care funding and access to it is increasing beyond inflation. In fact, we have seen improvements in many figures. For example, since March 2017, the number of patients who have been delayed leaving hospital due to social care has halved.

Economic Growth and Employment

The Government have worked hard to build a stronger, fairer economy. The economy has grown continuously for the past nine years, employment is currently at a record high, unemployment is currently at its lowest rate since 1975 and real wages are rising.

It is welcome that 75% of those new jobs are full-time and only 3% are zero-hours contracts. It is also welcome that the minimum wage has gone up by 38% since 2010, but what assurance can the Minister give that the policy of dramatically increasing the minimum wage to help the poorest in our society will continue?

I can confirm that the national living wage will rise again this year, to £8.21. I can also tell my hon. Friend that later this year the Low Pay Commission will be set a new remit for beyond 2020. We want to be ambitious, with the ultimate objective of ending low pay in the UK while protecting employment for lower-paid workers.

I suspect the Minister knows that it will be more difficult to increase jobs in services businesses if we replace single market membership with a free trade agreement. Will he set out for the House what estimate he has made of the scale of the difficulty, particularly that facing financial services businesses that want to increase jobs in the current Brexit situation?

Financial services are well protected and ready to engage on arrangements for beyond the implementation period, but the Government are not complacent in respect of the whole economy. We have made a series of interventions through our productivity fund to meet the challenges of the next generation.

Whenever the Government table self-congratulatory questions like that one, there is a need to put on record what is really happening out there. Six million jobs in the UK pay less than the real living wage, 3.8 million people are in insecure employment and 2.5 million people work less than 15 hours a week. Economic growth, where it exists, is so geographically unequal that it does not reflect the reality of what people see around them. Let me ask, on behalf of those people: what is this Government’s strategy for in-work poverty and insecure employment?

I thank the hon. Gentleman for his question. This Government’s strategy is to relentlessly pursue growth in the economy and opportunities for all. We have seen 18.3% growth since 2010, and a record 32.6 million people in work. We will continue to prioritise interventions around technical education, cuts in business taxes and support for new technologies to recognise the new jobs that need to be provided for.

Benefits Freeze

13. What assessment he has made of the effect of the freeze on benefits on the level of personal debt of benefit recipients. (909584)

The decision to freeze most working-age benefits for four years from 2016-17 was one of a number of difficult financial decisions that were taken, but to assist claimants who are affected by debt, the Government announced, as part of the 2018 Budget package, a reduction from 40% to 30% in the maximum rate at which deductions can be made from universal credit awards. That change will help 290,000 claimants.

I thank the Minister for his reply. This morning, the Select Committee on Work and Pensions visited Charles Dickens Primary School in my constituency to talk to parents, children and teachers about the impact that the benefits freeze and other welfare cuts have had on local families, many of whom have been pushed into debt, poverty and destitution as a direct result of Government policy. Will the Government listen to the Select Committee and lift the benefits freeze one year early?

The Government have been very responsive to representations over the last two Budgets. There are 637,000 fewer children in workless households than in 2010. We made a number of interventions in the last Budget to increase the availability of interest-free advance loans to those who need them. We are listening, and continue to listen, to the concerns of the sector.

Economic Productivity

The best way to sustainably drive economic growth is to raise productivity, and that is a priority for this Government. We are increasing public investment in economic infrastructure to its highest sustained level in my lifetime. In the autumn Budget, we set out further investments to support business, technical skills and new technologies.

Last month, the Chief Secretary to the Treasury saw for herself the investment that York-based Pavers Shoes is making to change its productivity, yet local businesses are concerned about the effect of traffic congestion on local productivity. With that in mind, will my hon. Friend the Exchequer Secretary assure me that the Treasury is fully behind the Department for Transport’s proposals to fund the dualling of the York northern ring road?

My right hon. Friend the Chief Secretary says that she saw some very good leopard-print shoes at Pavers Shoes—and she knows a potential customer for them. Pavers is a highly successful business; I have seen for myself in India the success that it is having in selling shoes. We are committed to increasing transport investment in the north of England; the Secretary of State for Transport recently announced the dualling of the A1237 York outer ring road as a scheme in development for the major road network funding.

Does the Minister agree that one of the ways to increase productivity is by maintaining grants at European levels of investment in research and development? We have a lot of good universities in this country.

This Government are absolutely committed to maintaining research and development; that is why we will be investing in it at record levels. We are also supporting the private sector, for example by making research and development tax credits more generous so that businesses across the country can collaborate with universities to drive the economy forward.

24. Does my hon. Friend the Minister agree that the Ayrshire growth deal and other growth deals nationally can act as a catalyst for jobs and productivity? Will he do all he can to support that growth deal? (909596)

Absolutely. We are very excited about the £100 million Ayrshire growth deal and will continue to support that part of Scotland.

Tax Avoidance Enablers: HMRC Resources

16. What steps he has taken to ensure that HMRC has adequate (a) powers and (b) resources to investigate tax avoidance enablers. (909587)

The Government take a very serious view of those who enable or promote tax avoidance. We have taken a number of measures to clamp down on them, including penalties of up to £1 million.

In 2017, the Government introduced the Criminal Finances Act to great fanfare, claiming that they were clamping down on the facilitators of tax-dodging. Will the Minister please confirm how many prosecutions have been brought for the new offence of failing to prevent tax evasion?

We have taken action against enablers and promoters, and the cumulative amount of time in prison that has resulted from those particular actions is in excess of 100 years.

22. HMRC has 2,000 fewer staff today than it did on the day of the referendum. Will the Minister explain the impact of HMRC cuts on the delayed timetable for the implementation of the UK’s future customs regime? (909593)

I am confident that HMRC will be ready for the outcome of the EU negotiations, whatever that outcome is. We have taken on over 4,000 additional staff to ensure that we are ready, and we have of course invested £2 billion in additional funding since 2010 to ensure that HMRC can operate effectively.

Job Creation

Can my hon. Friend confirm that under the Conservatives, in addition to a record number of jobs, wages are growing at their fastest rate in over a decade, meaning that more people have the security of a regular wage to provide for their families?

My hon. Friend is right, and this has not happened by accident; it is because of the decisions that this Government have made to cut taxes and to reform employment and welfare, unlike the Opposition’s approach, which is to say that business is the enemy and damage our economy.

Order. We are running late, so if the hon. Member for Strangford (Jim Shannon) can manage to ask a one-sentence question with a question mark at the end of it, I will call him; if he cannot, I will not. It is a deal. [Interruption.] No, not one and a half sentence—one sentence. Mr Shannon, get in there.

Can the Minister further outline whether there will be tax benefits available for small businesses that may not be able to sustain this level of wage increase? That was one sentence.

We need to ensure that all businesses succeed. In the spending review, we will be ensuring that business support is just as supportive of new entrants and start-ups.

No, but you can blurt it out on the question with which we were dealing, if you want. Unburden yourself, man.

23. Thank you for setting the stage for me so well, Mr Speaker. I am proud to chair the all-party parliamentary group for post-Brexit funding for nations, regions and local areas. It is vital that we have a fair settlement for the regions that need it most as we transition from EU funding to post-Brexit funding. Will the Chancellor of the Exchequer or the Minister responsible meet the APPG to discuss this vital issue? (909594)

Oh, I see what the hon. Gentleman was driving at in relation to topical questions. Jolly well done; what a prescient fellow. We now come to topical questions. I call Stephen Kinnock.

Topical Questions

I know that the hon. Gentleman does not believe in the hereditary principle, but I do not think that those words would ever have come out of the mouth of his dad. I think he should have a go. Just say “Topical 1”, young man.

I have a sense that by the time I have responded, inspiration will have struck the hon. Gentleman.

My principal responsibility is to ensure economic stability and the continued prosperity of this country. 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 through a transition period to a new relationship that allows our mutual trade to continue to flourish.

Since the introduction of the minimum wage, only 14 employers have been prosecuted by HMRC for failing to pay the minimum wage. Does the Chancellor agree that that is a completely unacceptable state of affairs? What action is he taking to boost the capacity of HMRC to go after those who are not paying the minimum wage?

HMRC does take action against errant employers. It is always pleased to receive information on suspected non-compliance and will investigate any such cases. I am sorry that the hon. Gentleman had difficulty thinking of a question. Anticipating this situation, I have at least four or five potential questions that he could have asked me, and I am happy to show them to him afterwards.

Colleagues, on a discretionary basis I am changing the order, but, believe me, I know why I am changing the order and there is a compelling reason in this instance for doing so.

T8. In yesterday’s education debate in Westminster Hall, we heard about a national emergency in school funding based on the National Audit Office’s predictions of £3 billion of savings being required in the next year—and I have often gone on about the £2 billion shortfall in children’s social care. Will schools and children’s social care be at the top of the Chancellor’s priority list in the forthcoming comprehensive spending review? (909604)

We were able to increase the education budget by £1.3 billion last year, which means there have been real-terms funding increases per pupil. We are already the top spenders in the G7 as a proportion of GDP, according to the OECD. But I do recognise that we need to make sure that, going into the future, our education system is properly supported. I would be delighted to meet my hon. Friend and colleagues to discuss this further.

When the Conservatives lost their majority at the last election, the Chancellor conjured up a £1 billion bung to the Democratic Unionist party to buy the Tories back into office. Yesterday, with the announcement of the towns fund, we reached a new low in politics in this country, with the attempt by the Government to purchase the votes of Labour MPs to vote for the Brexit deal. Pork barrel politics has become the new norm under this Government. Can I ask the Chancellor: if the price of a DUP vote has been £100 million each, how much has he calculated a Labour MP’s vote will cost?

The Government have been investing in our cities across the country with interventions such as the transforming cities fund—a £2.5 billion investment. We believe it is important to mirror those investments to drive productivity and economic growth in our towns. This week, we have announced a £1.6 billion intervention to support those towns, building on other interventions that we have made throughout the course of the past 12 months, including the future high streets fund.

I can understand why the Chancellor has broken convention today in not responding, because I think he would be ashamed to respond. Let me tell him what the answer is: if a DUP vote is worth £100 million, what Labour MPs were offered yesterday was £6 million.

Let me ask the Chancellor to undertake another calculation. Seven days ago, he was forced to publish the Government’s assessment, again, of how much a no-deal Brexit would cost this country—in today’s prices, nearly £200 billion. How much of a threatened cost to this country will it take for this Chancellor to find a backbone to stand up to the Prime Minister and the European Research Group to prevent no deal or a bad deal? Or is the Secretary of State for Work and Pensions the only Cabinet Minister willing to put country before career?

Oh dear, oh dear. As the right hon. Gentleman knows very well, I have been working tirelessly to ensure that we avoid a no-deal exit—that we leave the European Union in a smooth and orderly fashion to a new negotiated partnership that allows our complex and important trade relationships to continue to flourish in the future. That is what I spend every working day doing.

T2. The Chancellor briefly mentioned the spring statement. Can he update the House on his plans for the spring statement on 13 March? (909598)

As my hon. Friend is aware, because I have said it already this afternoon, the spring statement is not a fiscal event, but I will update the House on the Office for Budget Responsibility’s forecasts for the UK economy and for the public finances. I will follow the approach that I took at spring statement 2018 and also provide the House with an update on progress since the 2018 Budget and set out our intended direction for announcements later in the year. Although it is not a fiscal event, I already anticipate my hon. Friend beating a path to my door before the Budget in the autumn.

T3. Schools in my constituency face severe budget pressures running into millions. By 2021, some schools will not be able to afford any teaching assistants, learning support assistants, office staff or site staff. Does the Chancellor realise the perilous state of schools’ finances, and will he announce adequate funding for schools in his spring statement next week? (909599)

As the Chancellor said, the spring statement is not a fiscal event. We are increasing school funding in real terms per pupil, but of course we need to ensure that we are investing properly in our education system. We are looking at human capital and what will be the most important investments, and we will report on that at the spending review.

T5. Given the vital work done by East Coast College and Lowestoft Sixth Form College in promoting social mobility and improving the UK’s productivity, will my right hon. Friend take full account of the letter sent on behalf of 164 Members from across the House and increase further education funding, ideally at next week’s spring statement, but if not, at the forthcoming spending review? (909601)

FE spending is a priority, and we have protected the base rate of funding between 2015 and 2020. I was grateful to receive that letter from colleagues and have organised a meeting on 19 March. I am not sure whether we will be able to fit 164 people in a room, but I hope my hon. Friend will be able to attend.

T4. Does the Chancellor agree that the £1.6 billion set aside for towns is a pale imitation of the regional growth fund set up under the coalition? Will he look at establishing a Brexit redundancy fund of up to £7.5 billion, to help the 750,000 people who are estimated to lose their jobs in a no-deal scenario? (909600)

As I have told the House many times—I will elaborate more at the spring statement next week—in what I now think is the unlikely event of a no-deal exit, the Government have both fiscal and monetary tools available to them to support the economy. Of course, the likely shock would be on the supply side of the economy, and we would have to be careful that fiscal interventions did not merely stimulate inflation. If we are to find ourselves in that situation, we have the firepower and the clear intent to intervene to support the economy.

T6. I am sure that all those on the Treasury Bench agree that it is a really important responsibility of the Government to ensure that our children and young people can achieve their full potential. With that in mind, can my right hon. Friend assure me that skills and education funding will receive the priority attention it deserves in the upcoming spending round? (909602)

My hon. Friend is right. We also need to ensure that we are spending money on the right things. For example, the changes this Government have made to phonics have seen our children go from some of the poorest readers in Europe to some of the best. It is about money, but it is also about what we do with that money.

T9. Given the urgent need for clarity on post-Brexit regional funding, when do the Government intend to launch the consultation on the UK shared prosperity fund? (909605)

We regard the UK shared prosperity fund as very important, and we will launch a consultation this year on plans for the fund.

T7. Will the Chancellor tell the House how many people in my Dover and Deal constituency, since 2010, are either paying no income tax whatsoever, thanks to Government policies, or have seen an income tax cut? While he is about it, could he put that in a spreadsheet for every single constituency so that the whole House can see what has been done? (909603)

It is not possible to provide an estimate down at constituency level about the impacts of the changes in the personal allowance, but I can inform my hon. Friend that no fewer than 234,000 individuals have been taken out of income tax altogether who are living in the south-east, which obviously includes Dover.

Does the Chancellor agree with his right hon. Friend the Environment Secretary, who has told me on a number of occasions that he believes other European countries are looking enviously at the United Kingdom’s withdrawal deal, especially in the context of all the economic analysis the Treasury has carried out on Brexit scenarios?

I am not in a position to comment on private conversations that the hon. Gentleman may have had with my right hon. Friend the Environment Secretary, but I can tell him that I agree with everything my right hon. Friend has said at this Dispatch Box.

T10.   What assessment has the Treasury made of the impact of air passenger duty on regional and short-haul airlines? (909606)

Air passenger duty is a per passenger levy paid by all airlines, so there is no reason to believe that it discriminates against smaller airlines. We have now chosen to freeze APD on short-haul flights for eight years and to take children out of it altogether. The Labour party of course want to hike it with its holiday tax.

What is the Chancellor doing to make sure local authorities have sufficient funding to allow care providers to pay sleep-in shifts at a national living wage rate?

The Treasury Committee will today publish the Economic Secretary’s letter to me of 30 January on the current solution to problems faced by mortgage prisoners. This solution requires the private sector to be receptive to providing new mortgages to mortgage prisoners currently trapped with inactive lenders. What update can Ministers provide on the promised Treasury officials’ work with those lenders?

I can tell my right hon. Friend that I am in conversation with the Financial Conduct Authority about its move to a relative rather than an absolute test. I note that there are a range of views out there about how this problem can be dealt with. The FCA has said that it will come back later this spring with its response, and I am happy to meet my right hon. Friend to discuss her concerns further.

This morning, the Financial Times entitled its editorial, “UK territories need to embrace transparency”, prompted by the Government’s decision to pull a vote they knew they were going to lose last night. Does the Chancellor of the Exchequer not feel that he is completely out of kilter with the spirit of the modern age?

Some amendments were tabled on Thursday, and given the constitutional implications of those amendments, I think it is right that the Government work across Departments—with the Ministry of Justice and the Foreign Office—and have dialogue with the Crown dependencies and overseas territories to resolve the matter as the amendments suggested.

Adding to the calls of colleagues, may I ask the Chancellor to ensure that more money is provided for schools? Schools across the country desperately need it, particularly in Cheshire, which is the lowest funded.

In response to my right hon. Friend, I can say that one of the things we have done is to introduce a national funding formula to make sure schools funding is more fair across the country, and it is getting fairer every year. I would be delighted to meet her and other colleagues.

The Chancellor has claimed that the best way to protect the public finances from a decline in the motor industry post-Brexit is to back the PM’s deal. The Society of Motor Manufacturers and Traders says the best way is for the Prime Minister to abandon her red lines and be part of a customs union. Who is right?

As the Prime Minister has explained to the House many times, the deal that we have negotiated with the European Union provides for most of the benefits of a customs union, while still enabling the United Kingdom in certain circumstances to be able to strike trade deals with third countries. That is a win-win outcome, and the House should get behind it.

Is it the intention that we will be publishing our draft tariff schedule in the event of no deal before the meaningful vote?

I cannot give my hon. Friend a clear answer on a specific date, but soon as we are in a position to publish the tariff schedule, we will do so.

Personal debt is now higher than it has ever been in British history. Household debt is now also higher than it has ever been and has increased by nearly £1,000 in the past year alone. How sustainable is that?

That is why the Government are concerned that the establishment of a single financial guidance body should happen quickly this year. Some £56 million is spent on debt advice to 530,000 people. This is an area I take very seriously, and I will be going to the credit union conference on Saturday to outline some more policy initiatives.

Order. As is normally the case, demand exceeds supply. I am sorry to disappoint remaining colleagues, but we are well out of time and we must now move on.