The Chancellor of the Exchequer was asked—
Economic Effect of No Deal
We would prefer to leave with a deal, and we continue to work energetically and determinedly to get a better deal, but the Government are turbo charging their preparations to ensure we are ready to leave without a deal on 31 October. All necessary funds have been made available. The fundamentals of the British economy are strong: real wages are growing; employment is at a record high; and unemployment is at an historic low.
The Government’s Yellowhammer document, or base case scenario, states that there will be job losses, that food supplies will decrease and that financial services and law enforcement data and information sharing will be disrupted. Last night, we heard about customs clearance zones in Ireland and Northern Ireland, and the Brexit Secretary has admitted that there is insufficient time to complete the work. The Government spent £100 million on a PR campaign called “Get Ready for Brexit”. Is it not time that the Chancellor admitted that the Government are far from ready for Brexit and instead are heading for causing chaos in our country?
The hon. Lady will appreciate that the uncertainty around Brexit has caused businesses significant concern. They want to see the Government deliver on Brexit and leave on 31 October, and that is what we will do. Significant preparations have been made for a no deal, including trade agreements reached, increases in personnel at Border Force and more than 600 statutory instruments laid in this Parliament. If she wants to help, she should support the Government in getting a deal.
There is evidence of a rise in short positions being taken out against the pound. Is the Chancellor confident that the hedge funds taking those short positions, some of which donated to the Prime Minister’s leadership campaign and the Conservative party, have no inside information about the planning or timing of a no-deal Brexit?
That is such a ridiculous suggestion it does not deserve an answer.
If we leave the EU without an agreement, do we get to keep the £39 billion?
The figure of £39 billion is based on a deal. If we end up leaving with no deal, that £39 billion number is no longer relevant.
Is the Chancellor aware that the chief executive of the port of Dover has said that we are 100% ready to leave the EU, and will he help that readiness by bringing forward plans to dual the A2 to the port of Dover?
I thank my hon. Friend for drawing the House’s attention to this issue. I am aware of that. I know, for example, that the investment the Government have made through Border Force, including the extra officers, is helping, and I am confident that in all circumstances we can keep trade flowing.
We do not know that at all. That is just scaremongering from the Scottish National party. We know that businesses throughout the UK, including in Scotland, want this uncertainty to end and want us to leave on 31 October.
Does the Chancellor agree that if we were to leave with no deal, there could be a potential economic impact on our European partners and that therefore it is as much in the EU’s interests to reach a deal as it is in ours?
My hon. Friend has made an important point: it is in everyone’s interests—ours and our European friends and partners—that we reach a deal. Intensive negotiations are going on, both with the Irish Government and with other European partners, and there is a very strong recognition that it is in all our interests that we reach a deal.
Is the Chancellor aware that the Office for Budget Responsibility’s alarming fiscal analysis of a no-deal Brexit assumes that the Government’s preparations are successful—and so result in a miraculously benign no-deal Brexit—and that even with this least-damaging no-deal Brexit the OBR predicts a hit to Britain’s finances that would destroy every single spending announcement by the Prime Minister and the Chancellor? Given that, is it not unacceptable for a Chancellor in a Government publicly contemplating a no-deal Brexit to fail to tell the truth to the British public that spending on health, schools and police will be slashed in the event of a no-deal Brexit?
First, I do not recognise that picture at all. It has been made up by the Liberal Democrats. Secondly, the right hon. Gentleman talks about what is unacceptable. What is unacceptable is for the Liberal Democrats to pretend that the referendum on the European Union never happened.
We have heard in the media today that the UK Government will have proposals ready to send to the EU by the end of the Tory conference this week. The Prime Minister’s main negotiating strategy seems to be to convince the EU that we are willing to accept no deal, and hope that it will capitulate at the last minute. Can the Chancellor name one occasion on which the EU has folded at the last minute in international negotiations?
Can the hon. Lady name a single negotiation in which we have not had the ability to walk away, out of the room?
These are supposed to be questions to the Chancellor, not to me.
Businesses are not ready for a no-deal Brexit. They are already losing EU workers, and are closing down as a result. In a no-deal Brexit, they will be hit by tariffs, and many more of them will sink as a result of that. People will lose their jobs. Given that there is now less than a month until Brexit day, does the Chancellor really believe that there is time to negotiate a deal? If not, will he ensure that the Prime Minister respects the law and requests an extension?
Significant work is going on to prepare the whole country for a potential no-deal outcome, and that includes helping businesses. I have allocated an additional £2.1 billion on top of the £2 billion that was already there, and that means that we can do much more to help businesses, including sending them more than 750 communications on preparedness and more than 100 technical notices.
The Government’s current policy is that we can have higher public spending, falling debt and a no-deal Brexit, but those three things are impossible to deliver together, so on which of them are the Government not telling the truth?
The Government are focused on leaving the European Union on 31 October. We are trying to do that with a deal, but if we do not, we will leave with no deal. The hon. Gentleman talks about the Government’s policy. At least this Government have a clear policy on Brexit; what is the policy of the Labour party?
The Government have listened to concerns expressed across the House about the loan charge, and, as the House will know, an independent review is now in progress under the leadership of Sir Amyas Morse. While it is under way, it is right for the loan charge to remain in force and for the Government to implement legislation on which the House agreed. The review will conclude by mid-November, to let anyone who may be affected know, and to give people time to plan in advance of the January self-assessment filing deadline. To help taxpayers who may need longer to pay, Her Majesty’s Revenue and Customs has confirmed again that there is no maximum time limit for payment plans.
The loan charge is the worst form of retrospective taxation. It is causing real hardship and distress to law-abiding taxpayers, and this week it was reported that a seventh person had taken their own life because of it. How many more people are going to take their lives before the loan charge is scrapped?
Let me correct my hon. Friend on the facts. We have been notified of three suicides that may have some connection with the loan charge, and which have been referred to the Independent Office for Police Conduct. In one case there has been a referral back to HMRC, but in all other cases there has been no further development, so I do not recognise the picture that my hon. Friend has described. Let me also remind him that although these effects have been much bruited, there is also the question of collecting the several billion pounds of back tax that is due.
What is clear is that the retrospective loan charge is causing huge pain and upset as people’s livelihoods and homes are threatened. Will the Minister ensure that the review hears directly from people who have been so affected, and will he either suspend the loan charge or at least tell HMRC that those who have signed a settlement agreement can pause their payments until the review has been concluded?
I am grateful for the question. Of course any injury to individuals from any act of Government or their agencies is to be deeply regretted. I recognise that, and if it has happened here, it is appropriate for the House to feel that way.
I have no powers to direct Sir Amyas Morse. I understand that he is taking evidence from external sources, including the loan charge all-party parliamentary group and the Loan Charge Action Group, which acts as its secretariat. I have met the APPG and the secretariat separately. So the matter is being fully addressed. The details of settlement have been set out on gov.uk.
On the issue that my hon. Friend the Member for Wellingborough (Mr Bone) raised with the Minister, the hard fact is that seven people facing challenge or investigation for the loan charge have taken their own lives. He can attribute cause as he wishes. The fact is also that the distress has been caused by the historical incompetence of HMRC and the subsequent willingness of Ministers to use retrospective taxation. Are the Government going to give up on the premise of using retrospective taxation, or does it fall to the House to pass laws that will stop them doing so in future?
The legislation is not retrospective. [Hon. Members: “It is.”] There are defined circumstances in which HMRC and the Government may seek to use retrospective taxation, and they do so with extreme care and attention. All that I am doing is referring my right hon. Friend to the facts as reported to the IOPC. As he will be aware, these are immensely difficult cases in which many circumstances and factors may be in play.
Despite the review, the loan charge remains in place and HMRC continues to pursue people for advance payment notices for which there is no right of appeal. That clearly goes against the spirit of the review. Will the Minister now suspend all activity?
The review is designed to assess whether the Government’s policy is appropriate, and it would be wrong to change it until the review has had chance to make a decision on it. The Treasury and the House have a great interest in supporting the provision of public services, which the recovery of tax avoided in this way, in many ways egregiously, is designed to fund.
I honestly do not think that the Minister is paying attention. These comments are coming from Members behind him, not opposite him. [Hon. Members: “From all sides.”] These people followed professional advice and declared their arrangements to HMRC, which did nothing. Yet it is now going back and taxing them retrospectively, all the way back to 1999 in some circumstances. The Minister cannot stand at the Dispatch Box and just ignore what he is hearing from the Benches behind him.
Nothing could be further from the truth. We are carefully attending to concerns that have been expressed. That is why I announced changes in July and have written on two occasions to colleagues to inform them of changes and developments. That is why we have instituted this independent loan charge review, the purpose of which is precisely to scrutinise the extent to which Government policy is appropriate.
The Minister is bound to be aware of the scale of concern across the House and among those who are directly affected. He has outlined a date of mid-November. Immediately upon that date being reached, will he take urgent action to assist those affected?
I have no idea what the loan charge review will conclude, but I guarantee that we will look at its findings with all due speed and dispatch.
Like many Members, I have constituents who have been egregiously affected by the loan charge. The Minister’s response is unacceptable from their perspective. He should suspend all the loan charge activity while the review is under way and until the Government have responded to it. What preparation is happening in HMRC for the policy shift if the review says that the loan charge is unfair and needs to be changed? How will he deal with my constituents who have already had to pay but may be proven to have paid erroneously?
I am unable to comment on what the review will conclude. We can certainly look at whether there may be changes that HMRC would take rapidly thereafter. It possesses the capacity to do so quite quickly if necessary, as does Government. We will have to review that moment when it comes.
The hon. Lady is absolutely right to focus on the activity of the promoters. They are extremely ingenious in operating within the framework of law, but doing some very nasty and duplicitous things. They often operate offshore and it is extremely difficult to close them down when they are constantly mutating from one company to another. I assure hon. Members that we are looking at the problem extremely closely, and I hope to return to the House at some point fairly soon with some thoughts.
I worry that the Government characterise those who are suffering from the loan charge as in some way egregious tax avoiders, when it is abundantly clear that in the case of my constituents they acted on advice, openly, and in the belief that the scheme was approved by HMRC. I also worry that HMRC is behaving towards taxpayers in a fashion that is new, and in many cases, tax advisers say, unprecedented. I also think that the retrospectivity is deeply questionable.
I must say, I am surprised to hear a man of my right hon. and learned Friend’s legal standing and status regard this as retrospective, because it plainly is not. [Hon. Members: “It is!”] There are many parts of tax policy that have to look back to the basis of an asset or a liability, and that has happened here. In this case, HMRC has taken quite vigorous action over the years, in different forms, to let people know. Of course, it is subject to the loan charge review; we will see what that concludes. However, I remind my right hon. and learned Friend that these people were in many cases paying very little or zero in tax. [Interruption.] Of course the circumstances can differ, but there are a large number of people who knew, or should have known, that they were avoiding tax, and doing so un—
Order. We must speed up.
The recent spending round has delivered the fastest real growth in day-to-day spending in 15 years, targeting additional money on the people’s priorities of healthcare, education and tackling crime. We will publish alongside the next Budget an analysis of how these spending changes are distributed.
We on the SNP Benches welcome the Chancellor’s announcement on his pretendy living wage, because we have been calling for it for four years, but his promises still fall 5p short of the London living wage today, never mind in 2024. A 16-year-old today would have to wait five years to be entitled to it. Will he end the state-sanctioned age discrimination of his pretendy living wage, so that all people, regardless of age, can receive a fair day’s pay for a fair day’s work?
I welcome the hon. Lady’s support. It was this Government who introduced a national living wage in 2016. It was this Government who increased the rate, as recently as April this year. The announcement that we have made, which I will have more to say about later, will help to end—actually will end—low pay for good in our great country.
The best way to improve living standards is to reduce tax burdens. Does the Chancellor share my concern that anyone in Scotland earning more than £27,000 is paying more than the equivalent English taxpayer, and that more than 1 million Scots are paying £500 million in extra taxation?
I believe the First Minister actually promised not to raise taxes, but in fact the SNP have raised taxes on more than 1 million Scots. Doctors, teachers and police are all paying more in Scotland than in any other part of the UK. Scotland is now the highest-taxed part of the UK, and the Scottish people will remember that at the next Scottish elections.
Since this Government came to power, they have relied heavily on monetary policy. The Chancellor of the Exchequer will know that quantitative easing and interest rates have now been cut to the bone. Is he concerned by noises coming from the Bank of England that interest rates could rise, and the effect that that would have on heavily indebted middle-income families?
The hon. Gentleman should know that the Bank of England is independent, and therefore monetary policy decisions are independent. I know that his friends on the Opposition Front Bench do not recognise or respect that, but it is a very important part of our economic system.
The Chancellor will know that one of the Government’s fiscal policies that is fundamentally wrong is the loan charge retrospective taxes on our constituents. Whether it is one death, no deaths or seven deaths, families are being destroyed because of the retrospective charge. Surely we should put a stop to it now.
Order. The matter in hand is the effect of fiscal policies on living standards.
Well, it is fiscal policy, Mr Speaker, in the interests of my right hon. Friend, and he is right to raise the matter. He will have heard the Financial Secretary to the Treasury, in answer to the previous question, point to the independent inquiry that is taking place, led by a gentleman who has considerable respect. We will await the outcome of that inquiry.
The effects of the Government’s fiscal policies on living standards have been devastating, especially for vulnerable people, so is it still Government policy to remove the benefits freeze in April 2020?
The hon. Gentleman talks about the Government’s fiscal policy, which is a core part of our overall economic policy, and it is that policy that has led to a jobs boom, with 3.7 million more people in work since 2010, and over 1 million fewer working households in our country living in poverty. The real threat to the living standards of working people is the agenda of the Labour party.
It would have been helpful to get an answer to the question. We have a Prime Minister who cannot be candid even with the Queen, a Health Secretary who claims there will be 40 hospital rebuilds when in fact it is just six reconfigurations, and a Chancellor who worked at a senior level for a bank that a US Senate Committee found had caused
“material damage to ordinary people and the wider global economy”.
Why would anyone believe a word that this self-serving Government say? They are led by a Prime Minister who, many claim, believes that telling the truth is an illness to be avoided.
I do not believe that I detected a question.
Free-to-use Cash Machines
The UK has an extensive and internationally enviable free ATM network. We know that many people still use cash day to day, and we have committed to safeguarding cash for those who need it. I am delighted that UK Finance and LINK are leading industry efforts to protect free cash access. That culminated in UK Finance launching the Community Access to Cash initiative just yesterday.
The Minister says that, but news that NoteMachine is to convert 3,000 of its 7,000 free-to-use cash machines to pay-to-use machines is of great concern to my constituents. According to Which?, we have lost 15% of our free-to-use ATMs over the past year alone. The previous Labour Government formed an agreement with ATM operators and the Treasury to plug gaps in financially deprived areas where people had to pay to access their cash, so what are this Government going to do to prevent people being charged just for trying to access their own money?
Use of cash has reduced significantly faster than expected over the past 10 years. I am meeting UK Finance and LINK tomorrow to ensure that their mechanism is good for the current situation. The new initiative to which I referred in my previous response will give communities up and down the country the opportunity to engage with UK Finance on better and new solutions.
We will hear from a Devon knight, I think. Sir Gary Streeter.
Is not the closure of ATMs linked to the decision by high street banks to close their branches left, right and centre? Will the Minister, in his regular meetings with the chief executives of high street banks, remind them that they do have some duty to elderly customers and small businesses?
I do that regularly. We are also trying to ensure that the transfer of responsibility to the Post Office runs smoothly, because 99% of people live within 1 mile of a post office, so it is a very good alternative for the vast majority of their banking services.
Hull’s high street is still very cash-reliant, and I am really worried about the blow that this reduction will give to an already struggling high street. Will the Economic Secretary please speak directly to the Payment Systems Regulator about what further measures can be taken to prevent the reduction in free-to-access cash machines?
Yes, I am very happy to continue to engage with the regulator, and I noted the hon. Lady’s urgent question application earlier today. Digital payment alternatives improve local cash recycling and support cashback initiatives. Mastercard and Visa have a number of initiatives under way, and I am determined to see progress in this area.
With a third of banks, many of which had ATMs, closing in rural areas, and with very poor mobile connectivity in those areas meaning that digital payment schemes are not possible, I was very pleased to learn of yesterday’s announcement by UK Finance on Community Access to Cash, to which the Economic Secretary referred. That is the way forward, but what can he do to reassure business providers that if they provide ATMs, they will be safe from break-in?
We have to ensure that there is a wide range of options in rural areas. A number of trials are under way to provide solutions, underpinned by the investment in gigabit infrastructure that my right hon. Friend the Chancellor announced yesterday, which will ensure that we have even better connectivity in remote rural areas.
The Government remain committed to ending rough sleeping. That is why I announced £54 million of new funding to reduce homelessness and rough sleeping in last month’s spending round, following on from discussions with my right hon. Friend the Housing Secretary, which will take total resource funding to £422 million next year.
It has been revealed today that two rough sleepers died on the streets every day last year. The Government committed to halving rough sleeping by 2022, but their own guesstimate is that it fell by only 74 people last year, not the 500 required for them to be on target. That puts them three decades behind schedule, so when will the Treasury provide councils and homelessness charities with sufficient funds to properly tackle this national shame?
This is an important issue, and I am glad that the hon. Gentleman has raised it today. He will know that there are multiple causes of rough sleeping, which means that we need action across Government. That is why the Government have set out a rough sleeping initiative to deal with the causes, such as mental health, family breakdown and addictions. I think he will appreciate that we need cross-Government work. That needs to be properly funded. The £422 million that I referred to a moment ago is a 13% real-terms increase, and it will end rough sleeping by 2022.
Many people going to work today, not just in London but in cities and towns across England, will have seen at least one fellow citizen sleeping rough. Eight thousand beds have been lost, universal credit has cost tenants their homes, and as we have heard, 726 people died on the streets last year. Charities say that the funding gap is £1 billion. The Chancellor has said that ending rough sleeping is in our gift, but how many more of our fellow citizens will have slept on our streets before he delivers?
I hope that the hon. Lady welcomes the extra resources being put into fighting homelessness and rough sleeping—as I said, a 13% real-terms increase. She might recall that when I was Housing Secretary, we introduced new programmes to deal properly with rough sleeping, for example the Housing First pilots that are taking place in three parts of our country and showing real resource. We are starting to see falls in rough sleeping for the first time in a number of years, and I think the British people would appreciate cross-party co-operation on this very important issue.
NHS Hospital Projects
The Government have just announced the largest hospital building programme in a generation, with £2.7 billion of investment in six new large hospitals. I am delighted that one of those is the Princess Alexandra in my right hon. Friend’s constituency, and I pay tribute to him for his years of campaigning for his constituents on this issue.
Does my right hon. Friend agree that the hundreds of millions of pounds pledged for a new hospital for Harlow will mean not only that we have a building fit for purpose for the 21st century, but we will continue to attract the best and brightest staff, including through healthcare apprenticeships?
My right hon. Friend is absolutely right about that. May I take this opportunity to congratulate all the hard-working staff in his trust for their efforts in campaigning for this. They do a wonderful job serving their community, and I am delighted that with this support they will have the resources they need to keep doing that for years to come.
This is just a fraction of the hospital building programme that took place under the last Labour Government. Why on earth should anyone believe a single word this Government say, given that they themselves admit that a no-deal Brexit will damage the economy and the public finances? So there will be less money for hospitals and everything else, will there not?
The legacy of the last Labour Government’s hospital building programme is that we are left with £10 billion in private finance initiative payments every year, rather than this being spent on people’s healthcare. This Government are investing in hospital upgrades up and down the country, with 20 announced on the steps of Downing Street, six more announced this past weekend and business plans for another 20 more—and diagnostic equipment. This Government are committing to the NHS, and we will ensure that every patient gets the care and consideration they deserve.
I welcome the announcement of the makeover of the out-patient facilities at Heartlands Hospital, which serves some of the most deprived wards in east Birmingham and in my constituency. Does the Minister agree that it is possible to put this additional capital spending into the health service only because a Conservative Government have repaired the nation’s finances?
I welcome my right hon. Friend’s comments. She is absolutely right: the only way we get strong public services is with a strong economy, and the only way we get a strong economy is with a Conservative Government.
Oh very well. I call Tim Farron.
You are very kind, Mr Speaker. In his announcement this week, the Chancellor chose not to invest a single penny in the Westmorland General Hospital in Kendal, but will he at least end the Treasury’s 3% deficit tax on our local hospitals trust, which has cost £4 million from hospital spending in the past three years? That is money that should have been spent on a new radiotherapy centre for local cancer patients.
On cancer treatments, I am delighted that survival rates are at the highest they have ever been. On diagnostic treatments, the recent announcement of £200 million to upgrade diagnostic equipment up and down the country will make an enormous difference to early screening and testing. On funding in general, we are in the first year of a record five-year investment in the NHS—£34 billion more promised by this Government.
Student Funding: 16 to 19-year-olds
Treasury Ministers regularly engage with Secretaries of State on all aspects of public funding, including 16 to 19 education funding. At the spending round, we chose to invest £400 million more in the sector next year, which will mean that the base rate of funding will rise to £4,188 and be growing at a faster rate than core school funding.
Away from the fantasy figures being peddled in Manchester this week, college heads and principals are struggling to work out whether to continue to raise their class sizes or to restrict subject choice. Will the Chancellor therefore tell Cambridge Regional College and the excellent sixth forms and sixth-form colleges in Cambridge whether they are going to be getting the extra £760 that the Raise the Rate campaign has calculated is necessary or the meagre £188 per pupil per year he is offering?
The hon. Gentleman might call these fantasy figures, but this is the biggest increase in funding for 16 to 19-year-olds in a decade, and it has been hugely welcomed by the sector. It includes £212 million of targeted interventions, on the courses that are the most costly to deliver, such as engineering and construction. I would have thought he would have welcomed that.
Order. If the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) wishes to shoehorn his Question 20, which will not be reached, into this Question 10, which has been, he is free to do so. If he takes me up on his generous offer, we will have a double dose of Daniel.
Question 20, Mr Speaker.
No, no, your moment is now, Sir. Your opportunity has arrived—expatiate.
My hon. Friend will know that in the spending round I announced a £4.6 billion increase in school spending. I know that he has campaigned on funding for his local schools and can tell him that 80% of the secondary schools in his area will see their funding level go up to at least the new minimum level of £5,000 per pupil.
A new business starts in the UK every 75 seconds. Following the patient capital review, we announced a £20 billion action plan to finance growth in innovative firms. To support that, we have established a new business finance council to ensure that Government, banks and other lenders work together to help small and medium-sized enterprises to access the finance that they need.
I welcome all of the Treasury team to their places and thank the former Chancellor, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), for letting me work so closely with him. It was an amazing privilege.
I spent an amazing day with my constituency businesses in the village of Beckley. They are concerned about business rates, on which I support their call for reform, as well as about the VAT threshold and lack of taper. They will also now be writing to me about the welcome increase to the national living wage. Can we do more to support small businesses? They are the backbone of rural economies and without them we will not have employment.
I thank my hon. Friend for his question and take this chance to thank him, on behalf of the Government, for the work he did with the former Chancellor. He is quite right to talk about tax reform. Of course, since 2016 we have announced business rates reforms and reductions worth more than £13 billion by 2023-2024. On VAT, in the run-up to the 2018 Budget we consulted on the threshold, which is the highest in the EU and the OECD. We have committed to keep that in place until 2022, but I am genuinely always interested in suggestions that I can discuss with colleagues.
When is the Minister going to do something about the delays in payment to small businesses that often affect their cash-flow? We have debated the issue for many years; is it not about time that the Minister did something about it?
Responsibility for this issue falls between the Treasury and the Department for Business, Energy and Industrial Strategy. A late-payment regulator has been set up. I talked about this issue with businesses at the Conservative party conference on Sunday; I take it very seriously and they highlighted it as an ongoing concern. It should come out loud and clear from the House that all businesses, particularly larger ones, have a responsibility to meet their payment terms, because that is crucial for small businesses. I think everyone in the House can unite around that common principle.
East Yorkshire knight—Sir Gregory Knight.
Is the Minister aware that one of the main difficulties facing small rural businesses is the non-availability of fast and reliable broadband? In the light of the announcement that the Chancellor made yesterday in Manchester, can we now assume that the days in which a geographically isolated business is also digitally isolated really are numbered?
My right hon. Friend is of course absolutely right that broadband connectivity lies at the heart of a modern economy. It was so welcome to hear my right hon. Friend the Chancellor of the Exchequer yesterday set out how £5 billion of investment is going to be devoted to making sure that we can deliver on the Prime Minister’s pledge to ensure full fibre broadband access by 2025.
Will the Minister outline whether he has considered tax incentives for businesses to take on apprentice staff in administrative roles, with special reference to young people from learning-difficulty backgrounds, who take more time and patience to train? There are simply not enough places available; will the Minister undertake to make places available?
Again, that is a unifying principle to bring to the House. The Government have done an awful lot to try to promote the uptake of apprentices—we have seen action on things such as national insurance to try to make it more affordable for businesses to employ young people. The Department for Business, Energy and Industrial Strategy is very interested in all the work that goes on around supporting access into work for disabled people and people with learning disabilities, and would be interested to hear more from the hon. Gentleman about those ideas.
Moray Growth Deal
I discuss matters of importance regarding the Scottish economy with Government colleagues on a regular basis. In July, £32.5 million was allocated for the Moray growth deal.
The £32.5 million investment that the Minister has just mentioned, which was also matched by the Scottish Government, made the Moray growth deal the highest funded per head of population anywhere in the country. The next key milestone will be the signing of the heads of terms, so can he update us on the progress made towards that?
I thank my hon. Friend for his question. He has been a great champion for the growth deal, which will unlock huge benefits for the people of Moray. We hope to settle the heads of terms this month to allow this whole project to move forward quickly.
I think that we are about to hear the prodigious knowledge of the hon. Member for Blaenau Gwent (Nick Smith) on the Moray growth deal. Wonders never cease.
That was a truly ingenious question. Of course, the UK shared prosperity fund is really important. We continue to make good progress on its design. Ministry of Housing, Communities and Local Government officials have so far held 26 engagement events across the UK with over 500 representatives from a breadth of sectors. This is something that, obviously, has massive implications for Wales, and we are very happy to ensure that we engage everyone in that process.
The Moray growth deal, like the Clackmannanshire and Tay Cities growth deals, is bringing unprecedented investment into Scotland. Are the Minister and the Treasury considering reprofiling the investment over 10 years, as opposed to 15, as the local councils are asking me to do, so that we can get this investment and this transformational change in our communities?
I thank my hon. Friend for that question. Clearly, we want to see this investment move forward as quickly as possible. If he wants to raise that matter with us and indeed with the Secretary for Scotland, we can certainly talk about it, but I obviously cannot make any commitments here today.
On the subject of growth deals, may I ask the Minister, in addition to discussions on the Moray growth deal, what discussions has he had with Cabinet colleagues on the progress of the Mid Wales growth deal?
We are committed to bringing forward growth deals across the UK. Obviously, in the devolved Administration areas, we want to bring forward money from our side, but with effect from the Welsh and Scottish Governments as well. We want to see progress across the UK; it is not restricted to Scotland.
Free Ports: Foreign Businesses
We are developing an ambitious and attractive UK free port offer to create hubs that will attract inward investment, create jobs and boost trade. Typically, free ports only offer customs benefits, but we are looking to go further than that to ensure that these turbo-charged areas can drive growth for their community.
I thank the Minister for that answer and for his speculative phone call earlier trying to tease out the nature of my question to him. The Conservative Mayor for Tees Valley, a member of the Government’s very carefully selected free ports advisory group, says that he hopes to see reduced corporation tax and exemption from employers’ national insurance contributions. Has the Minister made an assessment of the impact of these Tory proposals on the Exchequer and the state pension fund?
I pay tribute to the Conservative Mayor, Ben Houghton, in Teesside for championing his community. He has been advocating a free port because he believes that such a phenomenon will create jobs in his area, drive inward investment and boost trade. I hope that the hon. Lady would welcome that for her community in Grimsby, where the seafood industry and Associated British Ports, the port employer, has loudly called for such free port status for her area. I hope that, when the opportunity comes, she will support her community in applying for that.
My right hon. Friend is truly a champion of free ports, but will he agree to meet me to discuss the potential benefits for ports such as the port of Poole and the advantage for the wider region as well?
I would be happy to meet my hon. Friend. I believe that it is his birthday today, so I wish him a happy birthday. I am happy meet him and his colleagues from Poole to discuss free ports. We believe that these should be opportunities for the entire country to take advantage of.
The unadulterated charm of the Chief Secretary has, in my experience, not been surpassed—at any rate among Treasury Ministers.
That was a cruel blow for my right hon. Friend, Mr Speaker, if I may say so.
In answer to the hon. Lady’s question, the House will I am sure rejoice that between 2010 and 2019 the personal allowance has been increased by more than 90%, so that those on the lowest incomes do not pay any income tax, and since 2015-16 alone 1.74 million people have been taken out of income tax altogether. We will publish a full distributional analysis of the recent spending round alongside the next Budget, and it will also capture the effect of any budgetary announcements made at that time.
Can the Minister explain how it is fair that a small handful at the very top have run into the distance, making up the top 10% of the population and owning 44% of the nation’s wealth?
The hon. Lady may not be aware that at the moment the top 1% of the country pay 29% of all tax. That is up from the 25% in 2010-11.
I have three clear priorities as Chancellor: to ensure a strong economy, to get Brexit done and to deliver on the British people’s priorities. That is why I am pleased to confirm that this Government will bring an end to low pay. We are setting two new targets for the national living wage over the next five years: raising it to two thirds of median earnings and extending it to workers aged 21 and above. That will give 4 million workers an average pay rise of £4,000. I will set out further details in the next Budget. This Government are proving again that they are on the side of working people. Thanks to the hard work of the British people, we are moving from a decade of recovery to a decade of renewal.
When the Chancellor was Home Secretary, he told me and other More United MPs that officials were looking into the potential economic benefits of lifting the ban on asylum seekers working, which the Lift the Ban coalition says would bring £42 million into the economy. Now that he is Chancellor of the Exchequer, will he lift that ban in order to allow asylum seekers such as those in my constituency to contribute to the economy and to have the dignity that they deserve?
The hon. Lady makes an important point, and I am glad that she has brought my attention to it again. As Chancellor, I want to ensure that across Government every Department is doing its bit for the economy. Some of the people she is talking about will be vulnerable people and the current rules are worth looking at again. It is something that the Home Office is taking very seriously.
I thank my hon. Friend for that question. I have addressed the substance of it, but let me make a point about Sir Amyas Morse. I think that Sir Amyas is a superb choice. As my hon. Friend may be aware, in a debate in the House of Commons on 6 March 2019, the Chamber united across the parties in praise of Sir Amyas. The Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier), called him
“a fearless advocate for what is good in the public sector and for challenging Governments of whatever party”.
The Liberal Democrat spokesman, the hon. Member for Oxford West and Abingdon (Layla Moran), said that he was not only “unfailingly courteous”, but had
“an intelligence of steel. He has a knack for calling out obfuscation, fudge and imprecision”,
“a reputation for being completely fair.”—[Official Report, 6 March 2019; Vol. 655, c. 1004-05.]
He is a very good choice to lead this review.
Will the Chancellor give the House a quick fact-check of his speech yesterday? The Conservatives have cut funding for buses by £640 million a year. Yesterday, he announced nothing new; he simply reannounced £220 million from the spending review. His Government have cut £900 million a year from annual youth services budgets. Yesterday, he offered £500 million, possibly as a one-off. The National Infrastructure Commission says that we need £33 billion to roll out full-fibre broadband. Yesterday, he offered £5 billion. All of those promises will count for nothing if there is a no-deal Brexit. Has he not just followed the Cummings code: grab a headline, possibly wrap it around a bus and ignore the truth? But there is one figure that I would like to ask him about: 120,000. What significance does the figure 120,000 have for him?
The right hon. Gentleman knows that the last time his party was in office, we had the biggest budget deficit in our peacetime history and the biggest banking collapse this country has ever seen, and our country was virtually bankrupt. Now our economy is strong, with the lowest unemployment rate in 45 years, and it is because the economy is strong that yesterday I could make the announcement of investments in buses, roads, youth facilities and full fibre. If he wants to see that kind of investment continue at the next general election, he should vote Conservative.
I did not ask about the Chancellor’s record at Deutsche Bank; I never asked about the products he was selling that brought about the financial crash.
Let me tell the Chancellor what the figure 120,000 means. It is the number of deaths linked by the British Medical Journal to the Conservatives’ cuts since they came to power in 2010. No amount of spin will wash away the memory of nine years of this scale of human suffering. He claimed yesterday:
“We believe in a society where everyone knows that if they work hard, and play by the rules then they will have every opportunity to succeed.”
But isn’t it true that the Conservatives have broken the link between people working and being able to lift themselves out of poverty, when 70% of our children living in poverty are in households where someone is at work? And isn’t it the case that, despite the Chancellor’s pathetic attempt yesterday at playing catch-up to Labour party policy, under the Tories’ plans no one will reach the Tories’ target minimum wage until five years from now? And isn’t it the truth that, with this Chancellor and Prime Minister in charge, the Conservatives will always be the party of tax avoiders, bankers and the super-rich?
Let me tell the right hon. Gentleman a fact: the Labour party no longer represents working people and it is no longer the party of working people. That stopped a long, long time ago. He should reflect on his own policies of renationalisation; mass confiscation of private property, including the shares and homes of individual investors; protectionism; and state control. He calls business the real enemy, but the fact is that the Labour party is no longer fit to govern. It would wreck the economy and it would be hard-working people who would pay the price.
I have had heartbreaking meetings with constituents from Hastings regarding the loan charge, where I have heard tragic and sad stories about the destruction of families and their finances. Although I of course welcome the review that is to take place, may I urge the Chancellor to reconsider the position of not suspending the loan charge during the review period?
I do not know whether my right hon. Friend caught the discussion we had about this matter earlier, but the purpose of the review is to establish whether the Government are pursuing the right policy. It makes no sense at all to change the policy until we have heard from the review. I absolutely sympathise with the concerns that have been felt across the House, and both the Government and HMRC itself have taken steps to try to mitigate them.
I share the hon. Gentleman’s desire to ensure that all parts of our great country are benefiting from our strong economy. We have seen a jobs boom since 2010, after the deepest recession in our peacetime history under the previous Labour Government. Of the 3.7 million jobs that have been created, 65% are outside London and the south-east, which will be benefiting his communities and so many more.
One of the ingredients of economic growth—we have talked about boosting small businesses—is improving the productivity within the economy. What are the ministerial team doing to boost productivity?
I thank my hon. Friend for his question; he was obviously responsible for this when he was Exchequer Secretary. Last week I met Charlie Mayfield for a very good discussion about the Be the Business fund that the Government have set up to support business-led movement to improve small business productivity. This includes running pilots in Cornwall to support the hospitality sector and in the north-west to support family businesses. There are other schemes, such as Made Smarter, which is a good pilot, in addition to a £31 million package announced at conference 2018 to improve SME management through peer-to-peer networks.
I will make certain that the Business Secretary is aware of the hon. Lady’s concerns. The Treasury obviously takes an interest in this issue but she will know that the Department for Business is taking the lead on it. Obviously, and rightly, she is concerned about jobs in her constituency. She would welcome the fact, I hope, that because of the policies of this Government more generally since 2010, we have seen in her constituency a 50% fall in the headline unemployment rate.
As we leave the EU, we need to reinforce our international reputation as a powerhouse of scientific excellence. In 2017 we spent 1.7% of national income on research and development, while Germany spent 3% and Israel 4.3%. So will the Chancellor use his next Budget to make substantial progress towards our 2.4% target and recommit to the medium-term target of 3% of national income going into research and development?
First, may I thank my right hon. Friend for his excellent work as Business Secretary, including in this hugely important area of research and development? He set some ambitious targets. We intend to stick to those targets, if not go even further, which I am sure he would welcome. Obviously I will not set out the Budget now, but I absolutely share his ambition, and I think he will be pleased with what we eventually do.
We are investing in York and investing throughout the country by creating a dynamic, free enterprise economy that is creating jobs. We have the lowest unemployment rate in our country in 45 years. I would think that a party that calls itself Labour would actually welcome that. In the hon. Lady’s own constituency, since 2010—since the Labour Government were kicked out—we have seen a fall of 12,300, or 64%, in the unemployment numbers. That is something she should welcome.
I welcome the introduction of the new business banking resolution service that will start to hear cases of historical problems later this year. In the previous Chancellor’s letter of 19 January, he stated that that scheme should carefully consider all cases that come before it. How is that possible when the research of the all-party parliamentary group on fair business banking determined that 85% of cases are excluded?
I thank my hon. Friend for his question. He is a powerful advocate for this redress scheme and I thank him for the work that he has done. In our conversation on 10 September, I reiterated the Government’s position that the scheme should not reopen complaints that have sometimes gone multiple times through the courts, but I welcome the fact that the new scheme will give access to 99% of those claims going forward, and I will continue to engage with him where I can to provide solutions on individual cases.
I can see that this is an important issue, and I will ensure that a meeting takes place with the appropriate Minister.
The hon. Member for Solihull (Julian Knight), the House will want to know, is a former money and property editor of The Independent and a very distinguished fellow, I am sure.
I am sure whatever cachet I had has now been completely ruined; thank you, Mr Speaker. There are reports that the Government are looking at bringing forward the date of the banning of diesel and petrol cars. Does the Chancellor share my concerns about the fiscal damage of lower new car sales, the lack of electric car infrastructure and the negligible impact that such a virtue-signalling move will have on emissions?
I thank my hon. Friend for his question. He is a tireless champion of the motor industry, which we all take very seriously. The Government have made a commitment to delivering net zero emissions by mid-century; that is hugely important and has cross-party support across the House. We will not be making any precipitate moves that would concern him without proper consultation fully across Government about the ramifications of any change in that date.
I do not have the number to hand, but I would be glad to write to the right hon. Gentleman with it.
I welcome the Chancellor’s commitment yesterday of £5 billion to support gigabit broadband across the whole of the United Kingdom. He will be aware that, historically, the Scottish Government have been responsible for the roll-out of superfast broadband, which is way behind what they promised, and not a penny of the £600 million that they announced in 2017 has been spent. Will my right hon. Friend confirm that future broadband funding will be paid directly to local authorities, bypassing the Scottish Government, who have failed rural constituents such as mine more than most?
The investment that I announced yesterday is hugely important for the entire country, including Scotland. My hon. Friend is right to point to the abysmal record of the Scottish Government in delivering broadband for their people, so we should certainly look at whether there is a much better way to deliver it.
This Government passionately believe in helping those at the bottom end of the pay scale, which is why the Chancellor announced yesterday an increase in the national living wage, to abolish low pay in this country once and for all. Our track record over the last few years in this area has been exemplary. The fastest growth in incomes has been for those at the bottom end of the pay scale. Today, someone earning the national living wage is £3,500 better off than they were when we came into office. This is a Conservative Government on the side of those who are working hard.
I very much welcome the Prime Minister’s announcement of pound-for-pound replacement through the shared prosperity fund of the EU funding that Cornwall receives. We are really ready in Cornwall to drive our economy forward. Will the Chancellor meet the local enterprise partnership and all Cornwall’s MPs, so that we can make rapid progress in designing that fund?
I thank my hon. Friend for her question. She is right that we need to ensure that the UK shared prosperity fund works for all the regions and nations of our country. I would be delighted to meet her, to ensure that we get all the suggestions from Cornwall as part of the process of designing that new fund.
Can the Minister answer the question asked earlier by the right hon. Member for Hastings and Rye (Amber Rudd): what is the reason for not suspending the loan charge scheme until the inquiry is completed? It is a request not for a change of policy, but just to suspend the scheme.
The reason is that the inquiry is designed to test the policy, and the policy remains in place until the inquiry is over. If the policy were ended now or suspended, all that potentially would occur is more confusion if the inquiry took the view that, ultimately, the Government were in the right.
I thank Ministers for providing funding to help evidence and establish the business case for reopening Middlewich railway station—a key priority for my constituents. What wider fiscal steps are they taking to support my constituency by supporting the northern powerhouse and midlands engine?
I thank my hon. Friend for working tirelessly on behalf of her constituents to ensure that more infrastructure, including rail and road, is delivered locally. She will know that one of the first commitments of the new Administration was to Northern Powerhouse Rail and further funding for the midlands engine. She may also know that yesterday I announced a White Paper on further devolution, which I think she will welcome too.
The social security benefits freeze has led many children and families into poverty and destitution. The Chancellor failed to answer the question from my hon. Friend the Member for Bootle (Peter Dowd), so I ask him again: yes or no, will he lift the social security freeze next year?
Announcements on welfare will of course be for the Budget, but it is important to note that this Government have done the most important job in lifting people out of poverty, which is getting them into work. Today, a million fewer people are living in workless households as a result of the actions taken by this Government.
So many shining stars in the parliamentary galaxy and so little time. Which star shall shine? Justine Greening.
Thank you, Mr Speaker. The Government seem to be making pre-election spending pledges with all the velocity of a high-power water jet. I wonder whether the Chancellor will point it in the direction of Hammersmith bridge. It has been closed for several months, but even its repair plan would not enable it to take double-decker buses. Will he look at whether his bus pledge can extend to the capital required to enable it to be successful?
I know that this is a very important issue for my right hon. Friend and her constituents. I share some of her concerns, which is why it has troubled me that the Mayor of London is not taking this issue seriously. Why is that? He has the funding available if he chooses to deploy it. He can make a difference immediately, but he refuses to do so.