The Chancellor of the Exchequer was asked—
Fuel Duty: Hauliers
Fuel duty has been frozen for nine consecutive years, saving money for all those who regularly use our roads. I can confirm that the average road haulier has saved £23,300 per vehicle on fuel since 2010 compared with the pre-2010 escalator plan. However, the benefits to hauliers and motorists of freezing fuel duty must be balanced against the cost to the Exchequer in the context of our need to fund our public services, so we continue to keep it under review.
Hauliers have definitely been a major beneficiary of the duty freeze, but will my right hon. Friend consider helping the industry further by investing in a new motorway junction between junctions 25 and 26 of the M1 to help improve connectivity throughout the east midlands?
From 2020, all English road tax will be spent on our roads via a dedicated national roads fund—that will be £28.8 billion between 2020 and 2025, including £25.3 billion for strategic roads. We have spent £120 million on the recently opened smart motorway between junctions 23a and 25 of the M1, which will reduce congestion, but we will, of course, continue to take into account the need for connectivity in planning future roads investment in the east midlands.
The Chancellor says this needs to be balanced against the needs of the Exchequer, but what about the needs of the environment? What effects have we seen during the period of the freeze, with the failure to tackle emissions and with the road transport sector in particular failing compared with others?
The freeze in fuel duty has helped hauliers across Essex, but of course there is another measure that could help our hauliers and businesses even more, which would be to dual the A120. Will my right hon. Friend have a word with the Department for Transport to see how we can use the taxes raised to get this road dualled?
Never a Treasury questions goes by without my right hon. Friend raising the dualling of the A120. Of course we have a very large fund available, with £25.3 billion for strategic roads, and I am sure my right hon. Friend the Secretary of State for Transport is well aware of the compelling arguments in favour of dualling the A120.
As I have already mentioned, hauliers have benefited very significantly from the freeze in fuel duty, but the hon. Gentleman asks a wider question. If we were to find ourselves leaving the European Union without a deal—a situation that I sincerely hope will not arise—we have a full range of tools available to us, including all the usual tools of fiscal policy. I have headroom within the fiscal rules of just under £27 billion, as I set out at the spring statement, and the Government will work closely with the Bank of England in those circumstances to ensure that fiscal and monetary policy are used to support the UK economy.
Thank you, Mr Speaker. Of course, hauliers and motorists warmly welcome the fuel duty freeze, but they are concerned about the disparity in fuel costs across the country and the impact of the cost of oil—they are not seeing that at the pumps. Will the Chancellor, or a member of his ministerial team, meet me to discuss an independent fuel price regulator and to see whether we can sort out these issues?
I chair Labour’s Back-Bench environment, food and rural affairs committee.
The Chancellor always impresses me. He is thoughtful, and I like him a lot. He is thoughtful on Europe and on the environment, but can I take him back to what my hon. Friend the Member for Cambridge (Daniel Zeichner) said? Is it not about time we had a modern taxation system that encourages sustainable transport? We are killing kids and poisoning pregnant women. We know that air pollution is of the utmost importance. I appeal to the Chancellor’s radical instinct: let us have a new form of sustainable taxation.
I am bemused by the disappearance of Mr Angry, who I am quite used to dealing with at the Dispatch Box. As I said earlier, we have a good track record on decarbonisation and addressing air quality challenges. We provide substantial support for ultra low emission vehicles, we have a highly differentiated vehicle excise duty and company car tax regime, which encourages the purchase of the cleanest and most efficient vehicles, and we will go on seeking to change behaviour through a carefully constructed tax system.
Manufacturing Output Levels
Manufacturing output has grown by 8.3% since the start of 2010, having fallen sharply as a result of the financial crisis. The manufacturing sector has seen productivity increase more than three times faster than the UK economy as a whole over the past 10 years. It accounts for almost half of UK exports, and directly employs 2.6 million people.
According to Make UK, we now have the highest level of manufacturing stockpiling of any country in the G7 ever. The chamber of commerce tells me that, in the north-east, stockpiling is putting huge pressure on warehousing and cash flow. That is a direct consequence of Brexit uncertainty. What additional support will the Minister offer to manufacturers? I asked a similar question of the Brexit Minister last week, and he did not seem to know what I was talking about. Will the Minister acknowledge the link between manufacturing output, stockpiling, cash flow and financial viability?
My right hon. Friend the Chancellor and other Treasury Ministers are working with the banks, which tell us that they are making funds available to businesses that need support as their cash flow is under pressure and need working capital in the months ahead. Of course, the best service that any of us in this House can do for manufacturers and businesses across the United Kingdom is to support a negotiated exit from the European Union as soon as possible.
Building on the previous question, I am told that manufacturing output in Plymouth is holding up well, but that is partly due to customers purchasing to stockpile because of Brexit uncertainty. That may result in a lack of demand once we get Brexit over the line, if we ever do so. Have the Government given any thought to supporting manufacturing businesses through any short-term downturn that paradoxically might occur once we get Brexit over the line?
The Treasury and other Departments have advanced plans to support the manufacturing sector should that be required in the event of a no-deal exit. The evidence we see shows that, if we can secure a negotiated exit, there is a great deal of business investment waiting to go back into the economy. This year could turn out to be a strong one for the British economy, if only we can secure the deal.
Does the Treasury acknowledge the wisdom in the letter that the Engineering Employers’ Federation, which represents 20,000 companies and 1 million workers, sent to the Prime Minister yesterday? It spoke of the renaissance of manufacturing in the earlier part of the decade, but is now expressing despair and is asking simply for the revocation of article 50.
If the right hon. Gentleman wants to support this country’s manufacturing sector, he and his colleagues should support a deal so we can leave the European Union in an orderly fashion. We are taking a number of important steps to support manufacturing, including increasing the annual investment allowance from £200,000 a year to £1 million, making research and development tax credits more generous, and backing schemes such as “Make Smarter”, which help the manufacturing sector to embrace automation and digital technology and move forward with confidence.
I can confirm that. The UK remains the European leader for foreign direct investment, venture capital investment and tech investment. Even in manufacturing, which is under a certain degree of strain, the UK remains the ninth largest manufacturing nation in the world.
“Strain” is not the word. In the real world, production and manufacturing output remained 6.8% and 2.7% lower respectively in the three months to January 2019, compared with pre-downturn GDP in the first quarter of 2008. After nine years of policy failure, should the Chancellor and his team not stop throwing spanners in the manufacturing works and instead oil the machine?
Not at all. Manufacturing exports are up 35% since 2010. We are investing in the manufacturing sector through our industrial strategy. We are creating a tax system that is pro-business. We are reducing corporate taxes to amongst the lowest in the developed world. The hon. Gentleman would do the opposite and reverse that. The very clear message that businesses give us, particularly international investors in this country, is that the threat of a hard left Labour Government dwarfs the risk of a Brexit outcome. We want to secure the future of the British economy in a resolutely pro-enterprise country.
What can I say? That old chestnut—and the Leader of the Opposition will be in No. 10 today as well. Anyway, I admire the Chancellor’s perseverance in trying to get the Prime Minister to grasp the concept of compromise—a challenging task, I have to say. Perhaps a less onerous task would be to sort out the problem with production. In the three months to January 2019, it fell by 1% compared with the same period last year, driven by a significant fall of 1.5% in manufacturing, which, of course, includes the beleaguered automotive sector. If the Government were a car, it would fail its MOT. The Chancellor has been putting manufacturing into reverse gear. Isn’t it time for a new car with a new driver?
The British economy is remarkably robust in its present state. We are seeing continued economic growth, record levels of employment and record low levels of unemployment. Businesspeople, investors and entrepreneurs the length and breadth of the country know that the greatest threat to our prosperity is a hard left Labour Government.
Renewable Energy: Public Funding
The Government have increased support for low-carbon electricity generation through consumer-funded levies, from £1.3 billion in 2010 to over £7.3 billion today, spending £30.7 billion since 2010. This support has enabled the UK to become a world leader in clean growth, and the private sector has invested more than £92 billion in clean energy since 2010.
I think that is quite a selective answer. A coalition of 20 community energy projects and affiliated groups has warned that the Government’s decision to axe the feed-in tariff incentive scheme could prove the final nail in the coffin for the sector. Since that warning was issued in February, at least 30 planned community energy projects have stalled. So what conversations has the Minister had with his colleagues in the Department for Business, Energy and Industrial Strategy to give proper support to community energy projects?
I thank the hon. Lady for that question, but that is not our experience. The investment that I have just described that is going into the sector is very considerable. Renewable capacity has quadrupled since 2010. Renewables’ share of electricity generation increased to 33% last year—a record high. The UK is decarbonising and we are meeting our climate change targets.
Members across the House recognise the importance of funding renewable energy policies to tackle climate change and improve air quality, but that does not go far enough. In Manchester, 126,600 children are growing up in an area with an unsafe level of air pollution. As the Mayor of Greater Manchester highlighted, further investment is needed to tackle the scale of the problem and protect the health of the most vulnerable—our children. Will the Chancellor commit to providing the wider resources needed to protect our children from toxic air?
The Mayor of Greater Manchester has the resources that he requires. The Government are supporting Mayors and urban areas across the country to take action on air quality, and we are providing money from national Government, for example through the £2.6 billion transforming cities fund, of which Greater Manchester has a significant share, to invest in the transport solutions of the future.
Although there is clearly more to do on climate change, surely action taken by this Government since 2010—we have reduced greenhouse gases, we have got more low-carbon jobs, especially in my constituency, and we are investing billions in renewables—must show our commitment.
My hon. Friend is absolutely right. Last month, in the spring statement, my right hon. Friend the Chancellor was able to add to those policies by announcing a scheme to help small and medium-sized enterprises to reduce their carbon footprint; a new marine zone around Ascension Island; support for the renewables sector; the new future homes standard, to ensure that from 2025 homes are built with low-carbon heating and high levels of energy efficiency; and many other policies.
Tidal energy projects are powering ahead in Scotland and show substantial export potential. The Scottish Government recently announced support funding of up to £10 million to assist in commercialising its use. What support will the UK Government give the industry?
The UK Government are supporting tidal energy. We have looked at any schemes that have become available to us. We have to balance the interests of the ratepayer, the taxpayer, to ensure that the schemes that we do support are the right strategic technology and the right value for money for the UK.
Will the Minister join me in paying tribute to one of this country’s most successful publicly funded renewable energy programmes ever? I am of course talking about the last Labour Government’s export tariff, the feed-in tariff scheme, the biggest single democratisation of energy that the UK has ever seen, cutting 700,000 tonnes of carbon. This month, however, in an act of supreme national and international self-harm, the Government killed it off—kaput, finito, game over. In the real world, how can anyone, anywhere believe that this Government take their climate change obligations seriously?
The facts speak for themselves. The UK is on track to over-deliver comfortably on the first three carbon budgets out to 2022. The clean growth strategy sets out how we will meet our fourth and fifth carbon budgets, which take us to 2032, while keeping down costs for consumers, creating good jobs in the clean energy market and growing the economy.
Thanks to our stewardship of the economy and the fact that wages are now rising above inflation, we are able to move on from the benefits freeze. From April 2020, we expect that increases will resume in line with inflation.
That entirely misses the point. Research by the Resolution Foundation published last week confirms that the value of child benefit is at a record low, 40 years after it was introduced. Meanwhile, the shambolic Tory Government throw good money after bad in their botched Brexit plans. Is it not time for the Chief Secretary to speak to the Chancellor and ask him to get his priorities right and to give families a much-needed pay rise?
Yesterday marked the beginning of the fourth year of the benefits freeze. Since it was brought in in 2016, the consumer prices index has increased by 6.6%, but working-age benefits have been frozen. That literally means that those in the most need can afford fewer necessities. The Joseph Rowntree Foundation says that by 2020, the benefits freeze will have pushed 400,000 into poverty. How can the Chancellor justify that?
I would have thought that the hon. Lady would welcome the fact that we are ending the benefits freeze. It is responsible to do so only when people in work’s wages are rising. Thanks to our economic reforms, our reforms to employment law and our welfare reforms, we are now able to do that.
The benefits freeze is a political choice made by this Conservative Government and this Conservative Treasury; it is not a necessity. It is one of the biggest cuts to social security we have seen in recent times. The entire cost of the work allowance concessions over three years amounts to less than the benefits freeze takes away in one year. When FTSE 100 chief executive pay has increased by 11% in the past year, is it not now time that the UK Government got their priorities in order and protected those who need it most rather than giving tax cuts to the richest?
The hon. Lady obviously has not heard my answer that we are now moving to a situation in which benefits will rise in line with inflation, but let us be honest about the choices that the Scottish Government are making. Their choice is to raise taxes on people earning £50,000 by £1,500 a year, driving business out of Scotland and making the Scottish economy less successful.
Low-paid Workers: Take-home Pay
The Government are committed to making work pay and ensuring that people keep more of the money they earn in their pockets. Last week, we saw another above-inflation increase in the national living wage, meaning that a full-time worker on the national living wage would be earning £690 more over the coming year. This week, the personal allowance has increased to £12,500. A single person on the national minimum wage, working 35 hours a week, would have taken home £9,200 in 2010; this year, they will take home £13,700.
One way of increasing take-home pay is to create more high-paying jobs in the first place. Does my right hon. Friend agree that Cheltenham’s Government-backed cyber innovation centre, which sees the country’s finest cyber-security minds from GCHQ nurturing small businesses, is an excellent example of how the state and the private sector can combine to boost the economy and generate great jobs to boot?
I agree that the public and private sectors can work together to support digital businesses, including in the vital area of cyber, and that is why we have established the Cheltenham innovation centre as part of our £1.9 billion commitment to cyber-security.
There are two parts to our approach. The first is a laser-like focus on raising productivity—investing in the infrastructure and skills that we need to raise productivity—because that is the only way to raise wages sustainably. We have also introduced the national living wage, and have increased it way ahead of inflation. We will have to set a new target for the national living wage from next year. I announced in the Budget that I have asked Professor Arindrajit Dube to conduct a survey of the literature on minimum wages and employment opportunities for people on low pay, so that we can address this issue and seek to raise the pay of the lowest paid as fast as we can without destroying their employment opportunities.
Further increases in the national living wage are vital to tackling the low pay culture, but does the Chancellor agree that as the rates increase, so does the risk of non-compliance? Does he therefore think that Her Majesty’s Revenue and Customs is adequately resourced to be able to go after rogue employers who do not pay a fair wage?
A recent survey by the Centre for Labour and Social Studies showed that a third of workers struggle with the cost of living and two thirds of workers expect to get poorer this year, yet FTSE 100 CEOs have been seeing their wages rise six times as fast as those of the average worker. To me, that sounds like a laser-like focus on increasing inequality.
The Government are responsible for the productivity agenda and the setting of targets for the national living wage. As I have already set out, working in those two tracks is the way to deal with the challenge of low pay. I can tell the hon. Lady what will not help workers on low pay: having their personal allowance taken away from them.
Tax Paid: Reductions
This Government have made very significant progress in reducing the burden of taxation on the low paid, including by recently increasing the personal allowance to £12,500—thus taking 1.7 million of the lowest paid out of tax all together since 2017.[Official Report, 11 April 2019, Vol. 658, c. 5MC.]
What the Treasury gives with one hand, local authorities are taking away with the other, with relentless rises in council tax, and parking charges and fees affecting households up and down the country. What are we actually doing to help families, instead of paying them lip service?
My hon. Friend makes the important point that there are many costs and taxes that bear down on the lowest paid. That is why, in addition to increasing the personal allowance, the Conservatives have introduced the national living wage, which has gone up well above the rate of inflation this April. We have frozen fuel duty for nine years in a row, which has saved the average car driver £1,000 cumulatively. We should also not forget that 28% of all income tax is paid by just the highest 1% of earners.
The Minister can say anything he likes, obviously. In fact, he knows that the tax system is skewed in favour of richer people. The poorest 10% pay 42% of their income in taxes, whereas the richest pay 34%. Does he have any plans to achieve greater parity, particularly in VAT?
I am surprised that the hon. Lady should mention the level of tax paid by the most wealthy, because under this Government, as I have just stated, the highest-earning 1% pay a full 28% of all income tax. Under the last Labour Government, that figure was substantially lower at around 24%.
Does the Minister agree that taxes could be lower if spending was better controlled, yet this House provides no scrutiny of spending whatsoever? The supply and appropriation Bill that he presented just over a month ago was not debated or voted on. Is it not time that, like other Parliaments, we had a Budget committee and a parliamentary Budget office to scrutinise spending and hold Government properly to account?
Given that our social care system is breaking, causing indignity, poverty and hardship to millions of people in their old age, might it be time to consider increasing fair taxes, so that we can live in a civilised society that looks after its most vulnerable people?
As the hon. Gentleman may know, £400 million went into social care just at the last Budget. It is the mission of this Government to get taxes as low as possible so that we have a strong economy. Our record is good: we have about the highest level of employment in this country’s history, more women are in work than at any time in our history, and we have halved unemployment since the mid-1970s. All of that is about creating the wealth and the money to make sure that we can afford the public services that the public expect.
Distributional analysis published by the Treasury at Budget 2018 shows that decisions taken by the Government on tax, welfare and spending on public services have benefited households across the income distribution, with the poorest households gaining the most as a percentage of net income.
The £1.7 billion announced yesterday for universal credit does not even touch the sides of the £12 billion of welfare cuts since 2015, nor does it contain provision to repay the debts that universal credit has caused for local authorities, such as the £2.5 million cost that has been borne by every highland household six years into the roll-out. Should Highland Council send the invoice for that debt for council tax payers directly to the Minister?
Pay has increased by 20% since 2010, we have a record number of people in work and wages are growing at their fastest pace for 10 years.
I thank the Minister for that answer. However, the ongoing benefit freeze will result in those on very low incomes being more than £800 worse off by 2020. Meanwhile, tax cuts for the rich mean that those who earn more than £60,000 will be better off. The UN special rapporteur on extreme poverty and human rights said that UK poverty is a direct result of political choices, so when will the Government address the fact that their political choices have led to one in eight people who are in work living in poverty?
At the Budget in 2018, we put an extra £630 into the pockets of working families on universal credit. The way we will make sure that our country succeeds is by increasing economic growth, building more houses and cutting the cost of living, not by saying that business is the enemy and trying to crash our economy.
I think it is an extremely strange idea. What we need to do is cut taxes for those on low incomes, and that is what we are doing: from this April we will cut taxes by £130 for those on basic rate taxes, meaning that they will be able to keep more of their own money.
At this stage of the economic cycle there are many more people in employment, but many of them are in low paid or part-time employment. What steps are the Treasury and the Government taking to increase the level at which people earn a living to pay for the necessities of life?
Stamp Duty Land Tax
The Government have made substantial progress in reforming the stamp duty regime. At autumn statement 2014, SDLT was cut for 98% of those people due to pay it.
Since we last spoke about this, the spring statement showed a further decline in receipts of an additional £2.7 billion over the scorecard. That was not due to changes in Wales and the welcome first-time buyer reforms, which were already in the October Budget numbers. What are the Government going to do to reform the system, protect revenue, grow social mobility, allow the elderly to downsize and get Britain moving again?
The year-on-year changes to the level of receipts from SDLT have reduced recently, but that is due largely to the fact that we have put a great deal of relief into first-time buyers’ relief, which is already helping 240,000 first-time buyers get on to the housing ladder.
However the Minister dresses it up on stamp duty land tax and other issues where the wealthy have seen their taxes cut, the impact on our economy is clear. Will he explain why stamp duty land tax reform is a priority rather than addressing the fact that in our country today one third of all families with a child under five are in poverty?
It is most certainly not our priority to reduce SDLT for the very wealthy. In fact, the current levels—12% plus 3% if it is an additional dwelling—are high. I can also inform the hon. Lady that the amount we raised through stamp duty land tax in 2017-18 was twice the amount raised back in 2010-11.
The loan charge was announced at Budget 2016 and was subject to public consultation. We have received representations, including from campaigners and the wider public. Disguised remuneration schemes pay loans in place of ordinary remuneration, with the sole purpose of avoiding income tax and national insurance.
I fully support measures to close loopholes for disguised remuneration, but not when they affect my constituents retrospectively. If the loans were illegal at the time my constituents took them out, why is it now necessary to introduce the loan charge?
It is important that the House fully understands how disguised remuneration works. If, instead of paying an employee their earnings in the normal way, an employer pays them by way of a loan via an offshore trust in a low or no-tax jurisdiction—with no intention of ever repaying the loan and simply to avoid national insurance or income tax—that is wrong. As for the matter of retrospection, that model has never, ever complied with our tax code. The loans to which I refer are persisting today, not retrospectively. That is why it is right—and only fair on those taxpayers who pay the correct amounts at the right time, and on our vital public services, which rely on that money—that we collect it.
Lending to Small Businesses
Loans of less than £25,000 to the smallest businesses are already regulated under the Financial Services and Markets Act 2000. The Government are committed to regulating only where there is a clear case for doing so, to avoid putting additional costs on lenders and businesses, and the Government welcome the recent expansion of the Financial Ombudsman Service and the establishment of a voluntary dispute resolution service.
A succession of small business lending scandals has come to light in recent months, including from Clydesdale, the Global Restructuring Group and HBOS. This has highlighted that small businesses are still struggling to get fair access to finance. Last week, Labour set out our proposals to fix this, including plans to set up a post bank that would offer relationship banking for small businesses to improve their access to finance. Will the Minister support Labour’s proposition for a publically owned postal bank that will provide trustworthy finance for small businesses?
I am sorry, but I cannot give the hon. Lady that undertaking. I really passionately believe that we need to resist additional Financial Conduct Authority fees, product reviews, increased compliance and monitoring costs for businesses, stifled product innovation and narrower product choice for small and medium-sized enterprises, which would be the consequences if we followed Labour’s advice on this policy area.
My hon. Friend makes a very fair point. That is why the Chancellor announced at the spring statement that we will require company audit committees to review payment practices and report on them in their annual accounts. This is part of a range of measures that the Government will be setting out shortly when we make a full response after the call for evidence.
The Government know full well that some deep-rooted corruption is taking place within major banking institutions when it comes to commercial lending. At the moment, there is nowhere near the type of protection needed to help cover our small businesses in such an eventuality. Will the Government take action now—eventually—to give small businesses that support?
We have taken direct action so that small businesses can get a direct and quick response by expanding the authority of the Financial Ombudsman Service and having a retrospective review through the dispute resolution mechanism. What businesses up and down the country want is quick action to deal with disputes that are unresolved.
High street banks are regulated, but the loans they provide to SMEs are not. There is not even a requirement to treat such a customer fairly and reasonably. In the absence of regulation, should there be a clearer warning about the lack of protection if things go wrong?
As my hon. Friend knows through his excellent work with the dispute resolution service, there are some avenues for businesses to go down. Many—virtually all—lenders have now signed up to the standards of lending practice, and that, alongside the expansion of the Financial Ombudsman Service’s jurisdiction, gives businesses the assurance they need.
Financial Services Sector
UK financial services are globally competitive, and this Government are focused on maintaining that competitiveness. Leaving the EU with a deal will ensure that financial services businesses can continue to operate across borders into the EU. Through our global financial partnerships initiative, we will also build a new framework for rest-of-the-world cross-border financial services.
We have always been clear that the UK must maintain control of the regulations governing one of its most important sectors and, crucially, a sector that the UK taxpayer stands behind. Those regulations have to be made in the UK. The agreement we have negotiated with the EU in the political declaration means that each side would make its own choices on regulation through its own legislative processes, and if any of these lead to our respective regulatory regimes no longer being equivalent, either side would have the right to withdraw market access.
The financial services sector is not above the law. If I can take the Chancellor back to the loan charge, what steps is he taking against accounting firms that told my constituents, who are working in the IT sector with a Government Department, that these schemes were perfectly legal? My constituents now find themselves laden with debt from HMRC and paying these things back. What is he doing about those corrupt accountants?
The hon. Lady is absolutely right. As well as pursuing tax avoiders themselves, we have to pursue those who promote tax avoidance. My right hon. Friend the Financial Secretary has just told me that there are over 100 promoters of avoidance schemes who are currently under active investigation by HMRC.
Automatic enrolment has reversed the decade-long decline in workplace pension saving. Department for Work and Pensions statistics show that since 2012 over 10 million people have been automatically enrolled into a pension. Minimum contributions increased this month to 8%, and everyone who is contributing at the minimum rate should see an increase in their overall remuneration package.
I thank the Minister for that response. One of my constituents in Hitchin is a stay-at-home mother, and the maximum she can contribute to her pension is £3,000 per year, whereas if she were working, she could contribute up to £40,000 per year. I am sure the Minister will agree that we want to encourage people to save for their future. How can we increase the threshold so that stay-at-home parents can increase the amount they put into their pensions?
The Government do offer generous tax relief on contributions to, and investment growth within, pensions. We also enable tax-free access to a proportion of savings. It is right that the Government control the cost of tax reliefs, and the £3,600 limit is one method of doing that. I can assure my hon. Friend that all aspects of pension policy and the tax system are kept under review in the context of the wider public finances.
On Thursday last week, one of my oldest manufacturing companies, Dudson, went into administration. The average length of service is over 20 years, and we now have huge concerns about the pension scheme, as we do about everything else to do with the administration—there is no money left even for redundancy. Will the Minister arrange for me to meet the appropriate Ministers to ensure that we get Government support where we most desperately need it?
FinTech revolutionises financial services, promoting innovation, stimulating competition and incentivising firms to deliver better outcomes for customers. FinTech firms directly contribute £6.6 billion annually to the UK economy, employing over 60,000 people across 1,600 companies.
I thank the Minister for that answer, and I thank the Government for keeping us in the No. 1 slot for FinTech. I very much welcome the call for evidence on digital payments, but there is a danger that if the wrong type of payments are taken, particularly around the interchange fees, we could undermine the sector. I therefore urge the Minister to remain open-minded to charging a maximum fee per transaction, as opposed to a proportionate fee.
I am grateful to my hon. Friend for that question and for his work as chair of the all-party parliamentary group on financial technology over the last four years. The regulator is the UK’s leading authority for interchange fee regulation, as he knows, and it is conducting a review into the fees that businesses face when accepting card payments. I acknowledge his concern, and we are open to hearing views on this issue, and on digital payments more broadly, as part of our call for evidence.
As the hon. Gentleman knows, it is the Government’s policy to have an orderly exit from the EU. However, we know that FinTech has proved to be very resilient in all circumstances. We had record investment of £15 billion last year. That is testimony to the creative power of that industry, working in the financial services sector in the City.
Residential Tower Blocks: Fire Safety Work
I meet the Housing Secretary regularly to make sure there are sufficient funds in his budget to address the issues.
There is a particularly pressing need in the case of blocks such as Northpoint in Bromley, where the owner and the developer refuse to take responsibility, and intend to use legal powers to pass on the costs of aluminium composite material remediation to the leaseholders. That is a complete breach of the Government’s undertakings. We need a fund specifically to provide funds for this—directly to leaseholders, if necessary. What is the Minister doing to advance that issue?
I know that my hon. Friend has been in touch with the Ministry of Housing, Communities and Local Government on this issue. We fully expect building owners in the private sector to take action to ensure appropriate safety measures are in place. We have written to all owners to remind them of their responsibilities. In addition, local authorities have the power to complete works and recover costs from private owners of high rise residential buildings.
Since 2010, UK labour productivity has grown by 3.9%, leaving it 1.9% above its pre-crisis peak. Slow productivity growth since the crisis is not a phenomenon exclusive to the UK, but is common across the G7. We have created the £37 billion national productivity investment fund to tackle it.
No. We are taking a range of interventions, including investing £600 billion in our national economic infrastructure. Over the course of this Parliament, investment in transport and other forms of infrastructure will be £460 million a week in real terms higher than under the previous Labour Government.
Sanitary Products: Funding
The Department for Education is implementing this policy with the purpose of increasing attendance in schools. That is the factor it will take under consideration.
The Chancellor’s spring statement announcement of free period products in secondary schools and colleges was welcomed—very much so. However, he has failed to mentioned pupil referral units and other alternative education provision, as well as the fact that some children start their periods in primary schools. He has also failed to consider women and girls in vulnerable situations such as homelessness shelters, refugees and women refuges. Will he take a human rights approach to period poverty to ensure universal free access to sanitary products for all women, so we can put a real end to period poverty?
My principal responsibility is to ensure economic stability and the continued prosperity of this country. I will do that through: supporting our vital public services, such as the NHS; investing in Britain’s future; keeping taxes low; and continuing to reduce the nation’s debt. Securing an orderly departure from the EU will allow our mutual trade to flourish and encourage businesses to invest more in Britain’s productive capacity.
Shoplifting crime is increasing, antisocial behaviour crime is increasing, violent crime is increasing. The Prime Minister said that austerity is over, so when can we expect to see the Treasury give the Home Office the funding needed to replace the 20,000 police officers lost since 2010?
In the Budget settlement at the end of the last year we made sure that there was extra money going into the police, increasing funding and increasing spending power in real terms. We have also allocated extra funding to deal with the scourge of knife crime.
With the Brexit dialogue ongoing it is best to leave exchanges on that topic to the negotiations, although I hope we can all count on the Chancellor, if not everyone on his own side, to continue to insist that no deal is not an option.
Turning to Google, when will the Chancellor tackle the scandal of Google’s tax avoidance? Google has an estimated taxable profit of £8.3 billion in the UK, so it should have a tax bill, according to the Tax Justice Network, of £1.5 billion. That would pay for 60,000 nurses, 50,000 teachers, seven new hospitals, 75 new schools. It pays £67 million. Why is the Chancellor, year on year, letting Google the tax avoider off the hook?
As the right hon. Gentleman probably knows very well, the issue is a good deal more complex than he suggested in his question. We have announced the introduction of a digital services tax to begin to address the challenge of shaping our tax system to respond to the digital age, but the problem is that we have a set of international tax rules that we are obliged to follow, which were invented in the age when international trade was all about goods. Nowadays it is mostly about services, and much of it is about digital services. The international tax system is simply not fit for purpose and the UK is leading the charge in international forums—including the G20, which will be meeting later this week in Washington—in looking for a new way to allocate profits appropriately between jurisdictions where digital platform businesses are involved.
After nine years in government, that smacks of an excuse, and let me say to the Chancellor that the Government’s digital services tax has been roundly criticised as being too narrow and having artificial carve-outs. Let me move on from one scandal to another: the scandal of London Capital & Finance. LCF collapsed in January, leaving 11,000 investors in the lurch. They had £286 million invested in the company and most of them were not wealthy people. The Financial Conduct Authority was repeatedly warned of LCF’s dubious structure and operations and failed to respond to those warnings. A decade on from the financial crash and our regulatory system is still not fit for purpose. What action is the Chancellor taking to secure justice for the LCF investors and to reform our regulatory system?
In Question 2 the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) told us how warehousing across the country was full to bursting point as businesses prepared for a no-deal Brexit. In a leaked letter last week, the Cabinet Secretary implied that business was not ready for a no-deal Brexit. Which is correct?
We know that manufacturing companies have been building precautionary buffer stocks of imported components to give them resilience against any disruption at our ports in the event of a no-deal Brexit—this tends to be larger companies. However, it is also the case, as my hon. Friend knows very well from his work as a Minister, that despite the Government’s attempts to engage with business, there are still far too many businesses who have adopted the famous approach of the ostrich in the sand in relation to this eventuality and are not taking precautionary actions to prepare for the possibility of a no-deal exit.
Rolling out full fibre is essential to Britain’s digital future. That will be done largely by the private sector. The public sector’s role will be to provide the appropriate support in areas where full fibre roll-out is not commercially viable, but supporting the urban centres in all our conurbations, including in Yorkshire, will be an early priority for the broadband roll-out programme. I should say to the hon. Gentleman—I hope this will cheer him up—that I recently met an Italian digital entrepreneur who has relocated his business from silicon valley to Sheffield and he said it was the best decision that he ever made.
In the spring statement, my right hon. Friend the Chancellor launched a review of our infrastructure financing, which includes that question on whether the UK would benefit from institutional arrangements. We have also made significant funds available to ensure that there is no shortfall for businesses that rely on the EIB.
As I have said, we are moving on from the benefits freeze. We are in a position now where real wages are growing and benefits will increase in line with inflation from 2020. However, the best route out of poverty and to helping people is ensuring that children get a good education and that more jobs are available in our economy.
Does the Chancellor agree that, in view of the failure of London Capital & Finance, of Premier FX, of individual police forces around the country to investigate economic crime, and of the Serious Fraud Office in yet another case, it is time we had a single economic crime police force in this country to deal with things properly?
We have a single economic crime board, which was set up in January and chaired by the Chancellor and the Home Secretary, to look at how better collaboration can tackle those challenges more effectively.
I was very pleased to visit the hon. Gentleman at Dudley College and see the fantastic work that it does. He put forward some interesting ideas about local transport. We are conducting a zero-based capital review as part of the spending review and of course we will look at proposals on all those fronts.
Does the Chancellor agree that the announcement that small shops will save up to £8,000 in business rates is a fantastic boost for our high streets? Will he please commit to supporting the bid from Redditch for the future high streets fund?
Of course, the rates relief that we have offered over a two-year period to smaller independent retailers will help the high street, but retailers have to use that breathing space to adapt to the changing environment that they face. We cannot freeze the high street in aspic and we must face the reality of the digitisation of our economy. So let us work together to transform our high streets so that they are sustainable for the future.
The Prime Minister negotiated a deal with the European Union which gave us many of the benefits of being in a customs union, while preserving our ability to conduct an independent trade policy. We put that deal to the House effectively three times and it was defeated three times, so we have to pursue other options.
The Chief Secretary has said yet again that the Government think building owners should pick up the cost of aluminium composite material cladding remediation. Does she understand that there is no legal means of enforcing that obligation? In the absence of such a means, will she please revisit the issue of direct funding for the leaseholders as a matter of urgency?
I note that a growing list of companies, such as Barratt Developments, Mace Group Ltd and Legal & General, are doing the right thing and taking responsibility for paying for remediation. The Government urge all other owners and developers to follow the leads of those companies.
In Chelmsford we love our high street. Does my right hon. Friend agree that giving nine out of 10 of our shops a business rates reduction of up to £8,000 a year will help to create a more level playing field between online and bricks-and-mortar shops?
Yes. As I said earlier, it is essential for the high street to evolve to respond to the digital age, but there is no doubt that smaller shops need a breathing space in which to do so, and reducing their business rates this year and next will help them in that regard.
It is indeed incumbent on HMRC to take its duty of care towards customers—particularly vulnerable customers —very seriously, and I am confident that it does just that. There is a dedicated helpline for those who have been affected by the loan charge, and a vulnerable customers team provides one-to-one support. We recently announced that we would extend the needs enhanced support service to those who are subject to open investigations of their tax returns.
The hon. Lady mentioned promoters. My right hon. Friend the Chancellor has already mentioned that more than 100 investigations of companies that promote tax avoidance are currently taking place. Other litigations in respect of offences relating to the disclosure of tax avoidance schemes have resulted in wins for HMRC. In the Hyrax case, which was concluded recently, it was found that the promoter was not behaving appropriately, and about £40 million worth of tax is likely to be recouped as a consequence.
It is largely companies that fall due to the loan charge, rather than individuals—of the 6,000 cases currently being settled, 85% by value relate to companies. HMRC has always been clear that appropriate payment arrangements will be in place to ensure that those outstanding amounts of tax, which after all have been avoided, aggressively and in a contrived way, can be settled sensibly.
I hope to follow in the footsteps of former Chief Secretaries who have been keen to keep a tight rein on public spending and ensure that people can keep more of their own money, because ultimately every penny of public spending is money that people have earned and that they could be spending on other things.
Some 55% of Scots pay lower income tax than they would pay if they lived in England. Does the Chancellor not agree that he should take inspiration from the SNP’s progressive Finance Minister by protecting public services and the poorest, rather than the better-off?
What is the Chancellor going to do to help the WASPI women—Women Against State Pension Inequality Campaign—who have been denied their pensions? It has been going on for far too long and it is about time he did something about it.
We have had to take difficult decisions because of the state of the public finances that we were left with. We have already made improvements in relation to those women being able to retire, but it is right that we do not burden future generations as a result of our existing commitments.