Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Chuka Umunna

Tuesday 2nd July 2019 Commons Chamber

[Mr Hammond]

As my hon. Friend knows, we have signed off the Truro funding decision, and I am sure she is happy about that. The Prime Minister has made it very clear that dealing with the challenges in the housing market is a priority for the Government, and in the spending review we will continue to prioritise funds to support both the housing market and the provision of social and affordable housing.

[Chuka Umunna (Streatham) (LD)]

If the UK leaves the EU without a deal and the Chancellor is still in his post, does he envisage there being enough fiscal headroom following the spending review to give the top 10% of earners a tax cut worth more than £9 billion? Surely that is wholly unjustified.

[Mr Hammond]

I think the hon. Gentleman has sketched a highly unlikely scenario, but I can answer his question. We have built up about £26 billion or £27 billion of fiscal headroom, and the purpose of that headroom is precisely to protect the UK economy from the immediate effects of a possible no-deal exit. I have no doubt whatsoever that in the event of a no-deal exit we will need all that money and more to respond to the immediate impacts of the consequent disruption, which will mean that no money will be available for longer-term tax cuts or spending increases.

Let me go further: the Government’s analysis suggests that in the event of a disruptive no-deal exit there would be a hit to the Exchequer of about £90 billion, and that will also have to be factored into future spending and tax decisions.

Spring Statement

Debate between Lord Hammond of Runnymede and Chuka Umunna

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

The whole point of the borderlands growth deal is to celebrate the economic geography of the borders region on both sides of that non-line between Scotland and England, so my hon. Friend makes a very good point. If I am coming to Carlisle, I shall certainly cross the border and visit his constituency.

[Chuka Umunna (Streatham) (Ind)]

Growth is now forecast to be 1.2% in 2019 and 1.4% in 2020. It is worth reflecting on the fact that, before the EU referendum, it was forecast to be 2.1% in each of those years. Growth of under 2% over the forecast period is sluggish and unimpressive, and the problem will be exacerbated if we fall off a cliff and leave the EU without a deal. Can the Chancellor therefore tell the House—I think we need the benefit of knowing this before we vote—whether, when we vote on the motion this evening, he will be voting against us leaving without a deal?

[Mr Hammond]

Yes, I will be voting against us leaving without a deal. I have always believed that leaving without a deal would be bad for the UK economy, and that continues to be my view. May I just take the hon. Gentleman up on his point about the relatively higher growth forecasts we saw until a year or so ago? We need to remember that this is a structural downgrade. The OBR revised its estimate of the growth rate of productivity in the economy. Until we get that productivity growth rate back, we will not see sustainable higher growth in the economy. That is why it is my No. 1 priority, and it drives every announcement I make.

Spring Statement

Debate between Lord Hammond of Runnymede and Chuka Umunna

Tuesday 13th March 2018 Commons Chamber

[Chuka Umunna (Streatham) (Lab)]

I cannot believe that the Chancellor did not have more to say about the NHS in this statement. The NHS in my area is not just in crisis, but at breaking point. He refers to putting an extra £4 billion into the NHS in the current financial year, but if we extrapolate what the OBR says that the NHS will need just to keep current standards of care going and to meet rising demand, we will need at least £30 billion extra going into the NHS by 2022-23. We need a solution that can subsist across Governments of different persuasions, so will he meet the demand that the hon. Member for Totnes (Dr Wollaston) and others across both Houses have made for a proper, cross-party convention on how we put our NHS on a sustainable footing? Secondly, will he support the suggestion of the former permanent secretary of his Department for a proper, hypothecated NHS tax to help to give it the funding that it needs?

[Mr Hammond]

I suspect that now is not the moment for a long debate about the structural funding challenges of the NHS, but the hon. Gentleman is right. We have an ageing population. Technology is driving an ever-wider array of interventions that can and should be made to support people with medical conditions—particularly chronic medical conditions—and we have to look at how to ensure that our NHS remains sustainable in the future. Of course we are looking at that issue. I will not give him a commitment today at the Dispatch Box on how we will do that, but it is absolutely something that we need to do. I very much hope, as he suggests, that this could be done on a serious, cross-party basis, but I fear that his Front Benchers would not be able to resist the temptation to try to play politics with any such serious discussion.