Spring Statement

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Wednesday 13th March 2019 Commons Chamber

[Mr Kenneth Clarke (Rushcliffe) (Con)]

May I sincerely congratulate my right hon. Friend the Chancellor on keeping his head while all around are losing theirs? I am sure that he would have liked to have delivered a rather different statement if the vote had gone the other way last night. Does he agree that economic forecasting is difficult at all times, particularly at a time of slowing global growth, trade war, Chinese debt problems, and, above all, the uncertainty of Brexit? Does he agree that the optimistic forecasts by the OBR are based on a smooth progression to Brexit, with no new barriers to trade and investment with our most important market on the basis that we currently enjoy under the customs union of the single market?

Finally, will the Chancellor guarantee to me that he will keep his fiscal powder dry—keep his reserves, as he may need them to avoid a recession or a financial crisis; that he will resist the irresponsible approach of the Opposition, who have the idea of spending and borrowing money only as a policy platform on every issue; and that he will resist all the other understandable demands from all parts just to spend money in response to lobbies, because he has the duty of keeping the British economy intact at a time of almost unprecedented crisis and unforeseeable problems?

[Mr Hammond]

I can confirm to my right hon. and learned Friend that the OBR’s central forecast is based, as before, on an assumption of a deal done with the European Union so that we exit via a transition mechanism and have a future close trading relationship with it. I can assure him—I am sure he needs no reassurance—that I will not be remotely tempted by the policies or the profligacy of the shadow Chancellor. My right hon. and learned Friend is absolutely right that until such time as we are sure that we will not exit via a disorderly no deal, I have to keep that fiscal powder dry, but no one will be happier than me when I can release some of that headroom to support public services, capital investment and lower taxes in this economy.

European Union (Withdrawal) Act

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Thursday 6th December 2018 Commons Chamber

[Mr Hammond]

My hon. Friend is right, and he takes me back to the question from my hon. Friend the Member for Mid Bedfordshire (Ms Dorries) earlier. If we were to leave the EU in a real no-deal scenario, with such issues left unresolved, we would be in a very difficult place. The small number of transit permits available to hauliers would be just one of the many issues that would cause considerable difficulty.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Before the Chancellor started giving way, he made the point that just being in the customs union was not replicating what we have at the moment, but does he accept that, were we to join Norway, Iceland and Liechtenstein in the European Free Trade Association and, on top of that, agree a customs union that we would need to keep the Irish border open, we could keep a very high proportion of the economic benefits of membership, even if the House insists on proceeding to give up political membership and other aspects of the EU?

[Mr Hammond]

My right hon. and learned Friend is right that, strictly, the flow of trade in goods would be facilitated by such an arrangement, but there are two problems with the EFTA-EEA model. First, it would continue to impose on us the obligations of freedom of movement, which we believe the British people voted against in the referendum decision in 2016. Secondly, it would leave our financial services industry in particular extremely exposed to having to comply with a rapidly evolving body of EU regulation over which we would have no influence.

Spring Statement

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

The right hon. Gentleman supported the switch to a single fiscal event, and now he is complaining that I have not delivered a mini Budget today. I am not surprised that he cannot quite understand anybody passing up the opportunity to introduce some new taxes, because that is what a Labour Government would be doing, not once a year or twice a year but every other week.

I heard the right hon. Gentleman referring to some of my hon. Friends as “Tory bully boys”. I remind the House that this is the man who still refuses to apologise to my right hon. Friend the Secretary of State for Work and Pensions, so I do not want to hear anything about bullying from the Labour Benches. The public will draw their own conclusions.

The right hon. Gentleman knows his Lenin, of course. The task is to win power, and that is why we see from him the smooth reassuring mien of the bank manager, but every now and again, the mask slips, and we get a glimpse of the sinister ideology that lies beneath—an ideology that would wreck our economy if he ever gets anywhere near the controls, threatening confiscation, dismissing property rights, undermining the cornerstones of our economy and the basis of our freedom and prosperity.

The right hon. Gentleman talks about political choices. Let me tell him the political choices we have made. We have closed the tax gap to one of the lowest in the developed world. We have raised £175 billion by 100 measures against tax evasion and avoidance. We are collecting 28% of all income tax from the richest 1% in our country—a higher percentage than in any year under Labour. He says that real wages are falling. I have good news for him: the OBR expects real wages to rise from quarter one 2018, which, in case he has not worked out, starts in two weeks’ time.

The right hon. Gentleman talks about spending on the disabled. Well, I have good news for him again: spending on the disabled will be higher in every year of this Parliament. He talks about research and development to support our economy. Research and development spending is at a record high.

The right hon. Gentleman reels out the same old bogus statistics on regional distribution; I think he has got the briefing from Russia Today. Let me tell him this: the Infrastructure and Projects Authority has published figures that clearly show that the highest per capita spending on transport infrastructure investment is in the north-west region, not, the last time I checked, one of the southern regions. All regions have benefited from the boom in employment. All regions will end this Parliament with lower unemployment and higher employment.

The right hon. Gentleman talks about £700 billion of increased national debt. We have had to deal with the legacy of Labour’s meltdown in 2009 because they did not fix the roof while the sun was shining. Our historical function is to clean up Labour’s mess, and my report today shows that we are doing it once again.

The right hon. Gentleman talks about funding for the NHS. I have put £9 billion into the NHS since autumn statement 2016. He talks about school budgets. School budgets are increasing per pupil in real terms. On children’s services, he must know that Department for Education research shows that spending on the most vulnerable children has increased by around half a billion pounds in real terms since 2010. We have committed £1 billion to tackling rough sleeping and homelessness and made a manifesto pledge to eliminate rough sleeping by 2027 and halve it by 2022.

No one watching our exchanges today can be in any doubt that Britain faces a choice. We have a plan to get our economy growing. The shadow Chancellor says it does not matter whether GDP grows or not. We have a plan to get people on the housing ladder, while the shadow Chancellor does not want “to get bogged down in property rights”. We have a plan to deal with our debts. The shadow Chancellor wants to send debts soaring because he fantasises that he can borrow for free.

The choice is clear: our vision of a dynamic, modern economy, or the Labour party’s vision of an inward-looking, narrow-minded country. We have to win this argument, because if we do not, it will be ordinary people—not the rich and the powerful and not the globally mobile—who pay the price, as they always do for Labour’s failings.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I congratulate my right hon. Friend on his very forceful statement based on competent government and grown-up politics, which are worlds that the shadow Chancellor will never enter. When my right hon. Friend comes to prepare his Budget for November, I am sure he will be looking for any new source of taxation that may be needed to put even more money than he already has into the NHS and social care, which are facing vast increases in demand.

May I suggest that my right hon. Friend looks at some of the extraordinary anomalies he has inherited in the tax treatment of older prosperous people in full-time work in this country? [Laughter.] Well, I think I am perfectly well placed to make my point and cannot be accused of personal bias. It is absurd that older employees pay less tax on their income than their younger colleagues because they do not pay national insurance. It cannot be right that people in large houses enjoying capital gains from the housing market have those disregarded for means test purposes if they ever need certain types of social care. As the early Budgets in a Parliament are a time for tough and difficult decisions, will my right hon. Friend let me know that he will be looking at those much overdue anomalies, which need to be addressed? Some justice between the generations, I think, is being demanded by our constituents.

[Mr Hammond]

I am a great fan of the concept of intergenerational fairness. My right hon. and learned Friend will know, as a former Chancellor of the Exchequer, that all Chancellors look at all options in the run-up to every Budget. I can undertake that I will do so in the run-up to Budget 2018. In the meantime, I can tell him that there is a mechanism for voluntary donations to Her Majesty’s Treasury, and in case he has mislaid it, I will send him a copy of our bank details.

Autumn Statement

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Wednesday 23rd November 2016 Commons Chamber

[Mr Hammond]

Let me begin by associating myself with the right hon. Gentleman’s remarks about the Jo Cox trial and sending my deepest condolences to her family and friends, who will be suffering again today.

I congratulate the right hon. Gentleman on his appointment to the Privy Council. I only wish that I could have been present at the investiture. I remember the procedure quite well: they give you a little red book to hold. [Laughter.]

I listened carefully to the right hon. Gentleman’s response to my statement. His central argument appears to be that the deficit is too high and borrowing is too high. That is a bit of a problem, because, as I have understood it, his central proposal for our economy is to borrow more and spend more. Under his rule, Labour would always be borrowing, in good times as well as bad. His analysis of the problem of the last Labour Government is not that they spent too much money, but that they spent too little. Indeed, his rule has remarkable similarities to Gordon Brown’s “golden rule”, and we all know where that got us. His big idea is to spend an extra £500 billion, without any notion of how he would pay for it.

The right hon. Gentleman welcomed the industrial strategy. I am not sure that I welcome his welcome, but I warn him not to welcome it too quickly, because it will not look anything like an industrial strategy that would come out of his office. What he has heard about today is a responsible set of decisions, such as the decision to borrow £23 billion of tightly targeted investment while paying for every single penny of every other commitment that has been made.

The right hon. Gentleman talked about Brexit, and attacked us over the way in which we are handling the Brexit process. I honestly do not know whether he has ever been involved in a negotiation—I suspect not—but I invite him to look across the continent for a moment and note the admirable discipline that our negotiating counterparts are displaying in their messages, revealing nothing as they prepare to go into this negotiation with us. My advice is this: if we want to secure the best possible deal for Britain, we must keep our cards appropriately close to our chest.

The right hon. Gentleman may have heard “cuts in people’s incomes” in my announcement about universal credit. Let me explain to him how this works. When we cut the taper from 65% to 63%, we allow people to keep an extra 2% of the income they are earning. I would have thought he welcomed that.

This is all about making tough decisions, and I am very happy to debate with the right hon. Gentleman, but I just wish he would be honest enough to accept that we cannot shower money everywhere, proposing to spend money on everything, without having to raise that money, either by taxes on ordinary people or by cutting spending elsewhere. It is simply no good to keep on pretending that we can do that just by taxing the rich. The top 1% of people in this country already contribute 27% of income tax paid, and unfortunately there are just not enough of them to be able to finance all the right hon. Gentleman’s ambitions.

The right hon. Gentleman said he was disappointed by the announcement on the national living wage. I do not remember—perhaps one of my hon. Friends can remind me—the level of the national living wage during the 13 years of Labour’s Government. He might note that the level I have announced today is precisely the level recommended by the Low Pay Commission, the body set up to pronounce on these things.

I wish the right hon. Gentleman would also be honest when he talks about the work-related activity group in the employment and support arrangements. This applies to new claims only, as he very well knows, so nobody is going to have £29 a week taken away from them however many times he says it. He also knows that it is not a stand-alone measure; it is part of a package. The money saved is being reinvested in a £330 million package to get these people into work, with targeted support to help them to be ready for work.

The right hon. Gentleman talks about house building starts. House building starts were 45% down under the last Labour Government.

The right hon. Gentleman and the Leader of the Opposition have spread division and disunity through the Labour party, and that is exactly what they would spread through the country if they ever—God forbid—got into government. The right hon. Gentleman says there are no new ideas; I have to say that he needs to check the opinion polling, because that is not quite what public opinion believes. Instead of carping and opposing every measure we propose, why doesn’t he roll up his sleeves and support us in the hard work of building an economy that works for everyone?

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I congratulate the Chancellor on reverting to the extremely sensible practice of having only one Budget a year, which Gordon Brown abandoned in order to try to buy votes twice a year, with disastrous consequences. I also congratulate him on easing the taper on tax credit, because it is having distorting effects on the labour market at the moment, for example by discouraging part-time workers from working extra hours. I particularly thank him for the money he has spent on the very valuable work rehabilitating the disabled at Stanford Hall in my constituency.

With those notable exceptions, will the Chancellor reassure me he will resist political pressures of all kinds over the coming years to move away from the very sensible fiscal discipline he has set out, because the major risk to his period of office would come—and it would affect every section of our society, including the JAMs that the media have discovered—if he were unable to avoid or mitigate the risk of recession, which global uncertainty undoubtedly poses to us in the real world?

Finally, will he confirm that, wherever he holds his cards, he will continue, inside the Government if necessary, to spell out economic reality and the long-term benefits to this country, if he wants to develop a modern, competitive economy, of retaining access to our most important market, in Europe, by retaining the benefits of the single market and the customs union, and that no amount of short-term political pressure will allow him to be deflected from that?

[Mr Hammond]

I am grateful to my right hon. and learned Friend. I am delighted that we have been able to lower the taper rate of universal credit, because of course it is absolutely in line with our principle that we should be supporting and encouraging people into work. He says the taper rate discourages people, but it is of course a much lower rate of withdrawal than under the old tax credit system it replaces.

Let me reassure my right hon. and learned Friend that I and my right hon. Friend the Prime Minister remain absolutely committed to the sound Tory principle that a country has to live within its means. Of course we have to deal with the realities the world throws at us, and that is why today I have adopted, as an interim measure for the remainder of this Parliament, a cyclically adjusted target which will always allow us to respond to any downturn that occurs. However, I certainly understand the importance of economic reality, and I also understand, as does my right hon. Friend the Prime Minister, the extreme desirability of achieving the very best access to markets in Europe for those who produce our goods and services.

Report of the Iraq Inquiry

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Wednesday 13th July 2016 Commons Chamber

[Mr Hammond]

The point that I have made already and will make again is that as I understand it Sir John has not identified lack of remit as the reason why he has given no opinion on the legality of the war. He has identified a lack of appropriate skill sets in the inquiry, and he suggested that it should be a matter that is dealt with by a properly constituted and internationally recognised court. As I have said already, the Government in looking at the report of the Iraq inquiry—it will take some time to do that—will consider all these matters, including questions that the right hon. Gentleman is raising about whether any further documents can appropriately be declassified and made available.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Obviously, John Chilcot’s report is masterful in its description of the formal records and the detail, and in the lessons he very wisely draws. However, will the Foreign Secretary, as a politician, look at the political context for a moment? Does he agree that the background was clearly that the Americans and the Blair Government wished to invade Iraq to change the regime and get rid of Saddam Hussein? However, that would have been illegal regime change, so what my right hon. Friend has just gone through—people’s desperate desire to find evidence and to persuade themselves that there were weapons of mass destruction, that Saddam was not co-operating with the inspectors, that there was a risk of terrorism and so on—was mainly, and no doubt subconsciously, motivated by a desire to give the Attorney General some basis on which he could say that this action was legal?

[Mr Hammond]

My reading of the inquiry report is that it does indeed identify that regime change as an objective would be illegal in UK law, but I think the suggestion is that, through a process of group-think, the people who were involved in this process came to see regime change as a means to deliver the legitimate objective, which was compliance with the UN Security Council resolutions. A fair reading of the report suggests that that is the process of mind that is being spelled out by Sir John.

Europe, Human Rights and Keeping People Safe at Home and Abroad

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Tuesday 24th May 2016 Commons Chamber

[Mr Hammond]

I agree with a lot of what the hon. Gentleman says. The specific allegation is that British-made cluster munitions, which will have been made and delivered probably 30 years ago, may have been used. We do not believe that that is the case, but the Ministry of Defence—he will have heard a Defence Minister say this from the Dispatch Box today—is carrying out an urgent investigation. It will look at the evidence and then decide how to move forward. We have a high level of confidence that British-made cluster munitions have not been used in this conflict, but we must of course look at the allegation that has been made, and any evidence presented in support of it, and respond appropriately.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

My right hon. Friend mentions Libya. With hindsight, it is clear that after the fall of Gaddafi we did not really give enough support to the Government we then recognised. The place collapsed into anarchy and is a possible base for ISIS. About half an hour ago, the Secretary of State for Defence said we were offering security assistance to the Government we now recognise, if and when they request it. Will the Foreign Secretary tell me whether his Department and other Departments are giving every other possible diplomatic and political support to that Government? Until they can establish themselves as a real Administration capable of delivering services to their public and of winning public support, we run the danger again of having a slightly fictional Government in Tripoli, while the rest of the country falls prey to anarchy or even ISIS.

[Mr Hammond]

As I am sure my right hon. and learned Friend would readily agree, hindsight is indeed a wonderful thing. [Interruption.] The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), reminds me that elections were held in Libya after the fall of Gaddafi. It is since then that things have gone wrong.

On support to Prime Minister Sarraj and the Government of national accord, yes, we are providing technical, diplomatic and political assistance. My right hon. and learned Friend will recall that I visited Tripoli a few weeks ago. We are working very closely with Prime Minister Sarraj, both bilaterally and through the European Union. Prime Minister Sarraj was at the meeting in Vienna last Monday in which 20-odd countries got together to discuss how we can best support what that Government are doing.

The situation in Libya is complex, but I think Prime Minister Sarraj is approaching it in the right way— a bottom-up approach. He is not trying to create a Government who can rule Libya in some monolithic fashion, because that is not practical. He is trying to create an umbrella Government within which municipalities are empowered to deliver the services and run the structures that people need. We have considerable experience of that approach—including, indeed, in Syria—working with devolved levels of government in small areas to try to establish good governance from the bottom up. I suspect that that will be a more realistic approach than a top-down approach.

European Union Referendum Bill

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Tuesday 9th June 2015 Commons Chamber

[Mr Hammond]

I am going to make a little progress, bearing in mind Mr Speaker’s exhortation.

It is almost four decades ago to the day that I, along with millions of others in Britain, cast my vote in favour of our membership of the European Communities, and like millions of others I believed then that I was voting for an economic community that would bring significant economic benefits to Britain, but without undermining our national sovereignty. I do not remember anyone saying anything about ever-closer union or a single currency. But the institution that the clear majority of the British people voted to join has changed almost beyond recognition in the decades since then.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

There must have been some strange juxtapositions in the campaign held in the 1970s, in which I took a very active part. Most of the debates I took part in were about the pooling of sovereignty and the direct applicability of European legislation without parliamentary intervention, which was a very controversial subject, and, besides, ever-closer union was in the treaty to which we were acceding.

Ukraine

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Tuesday 10th February 2015 Commons Chamber

[Mr Hammond]

I am afraid that the reality is that, if the United States decides to supply lethal aid, there will be two policies within the NATO alliance, because the German Chancellor could not have been clearer about her position, which she set out on Saturday, as my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind) said. This is a matter for individual national Government decision, and individual countries will make their own decisions. As far as I am aware, no countries within the NATO alliance apart from the United States are actively contemplating the supply of lethal assistance to the Ukrainians.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Will my right hon. Friend stick to his opinion that, however well trained and equipped the Ukrainian army is, it is inconceivable that it could resist the Russian army, or even slow it down significantly, so long as President Putin determined that he was going to put in the necessary resources? Does my right hon. Friend therefore agree that the British contribution must be to remain resolute and comparatively hawkish on stepping up economic sanctions if Putin maintains his present stance of military aggression, because the President of Russia cannot protect himself against economic sanctions, and it is the only reasonable response we can make?

[Mr Hammond]

I agree with my right hon. and learned Friend. That is indeed the role we have defined for ourselves, being the most forward-leaning partner within the European Union, urging, cajoling and persuading the others about the need to remain robust. When I say that we are the most forward-leaning country, I mean that we are the most forward-leaning large country—some of our small Baltic partners are very much forward leaning on this issue.

The underlying truth is this: hon. Members know, and the history of the Soviet Union reminds us, that, in the end, we cannot ignore the economics. Russia spends something like 20% of its GDP on defence and security. That is unsustainable in the long term. A small and shrinking economy—it is much smaller than the UK economy—attached to a very large military force is ultimately an unsustainable and unstable situation.

Iran (Nuclear Talks)

Debate between Lord Hammond of Runnymede and Lord Clarke of Nottingham

Tuesday 25th November 2014 Commons Chamber

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I am sure that everybody who wants one day to see a return to stability in the middle east will be hoping for eventual success in these negotiations. No one wants to see sanctions maintained on Iran and the Iranian people for any longer than is necessary. Will my right hon. Friend assure me, within the sensible constraints of what he can say during negotiations, that any eventual solution must include a system of inspection and monitoring that will continue for the indefinite future so that every interested party can be reassured that any deal will not be slid back on either by the present Iranian Government or any future regime in that country?

[Mr Hammond]

I can reassure my right hon. Friend that transparency and an inspection and verification regime are at the heart of these negotiations. The Iranians understand that the regrettable but none the less undeniable lack of mutual trust between the two sides means that there will have to be robust inspection and verification procedures in place throughout the duration of any agreement. Indeed, there will have to be proper transparency and inspection arrangements in place beyond the duration of any agreement under the usual terms of the nuclear non-proliferation treaty in respect of a non-nuclear power.