Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Mark Pawsey

Tuesday 5th March 2019 Commons Chamber

[The Chancellor of the Exchequer (Mr Philip Hammond)]

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

[Mark Pawsey]

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

[Mr Hammond]

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

Spring Statement

Debate between Lord Hammond of Runnymede and Mark Pawsey

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

The public sector pay freeze has been lifted: we have removed the 1% cap, so it is up to departmental Secretaries of State to make appropriate recommendations and provide appropriate evidence to pay review bodies. But we do expect them, where they recommend settlements above the level they are already funded for, to use workforce management measures and efficiency improvement measures negotiated with the workforce, to ensure that over time increases are self-funded through higher efficiency and productivity.

[Mark Pawsey (Rugby) (Con)]

The Chancellor is right to focus on how the tax system might be used to encourage improvements in the environment, and I know that the packaging industry recognises the need to reduce waste and will respond positively to his call for evidence. I ask for it to include two things: first, that it is people who cause litter, and the Chancellor spoke about the need for behaviour change; and, secondly, will it recognise the important role packaging has in reducing food waste by keeping food fresh for longer?

[Mr Hammond]

Yes, of course, and the point of having a call for evidence is to make sure that the decisions we make are based on full knowledge and full information. My hon. Friend makes a very important point: it would be massively shooting ourselves in the foot to make a change in relation to packaging that then massively increased food waste and the energy cost of food that was wasted.

Economy and Jobs

Debate between Lord Hammond of Runnymede and Mark Pawsey

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

Let me make a little more progress.

All that is before we even get to the £500 billion borrowing splurge that Labour has promised us over the next 10 years—£250 billion over the course of a Parliament.

[Mark Pawsey (Rugby) (Con)]

Will my right hon. Friend give way?

[Mr Hammond]

I will in just a moment.

Then there is the nationalisation programme. Let me explain these plans, Madam Deputy Speaker, because they are important. The Labour party wants to nationalise gas and electricity, water and Royal Mail. They would borrow a fortune to do it, and it would deliver no economic benefit whatsoever.

First, a Labour Government would have to buy up the shares of publicly listed companies on the stock exchange. Taking over just the single largest company in each sector would cost close to £44 billion, and the Government would have to pay a market premium on top, because a programme to buy the shares would drive up the price. Moreover, the taxpayer would take on those companies’ debts; that is another £26 billion. So that is £70 billion of public debt. When the Labour Government were done with the publicly listed companies, they would have to strike deals with scores of private investors and funds to buy the rest. All told, we are looking at more than £120 billion. [Interruption.]

The right hon. Member for Hayes and Harlington says from a sedentary position, “You do not understand. It is a financial transaction, so it does not need any money, and it does not require us to go out and borrow any.” He is simply wrong. Financial transactions add to public debt—[Interruption]—and that is before we even get to the railways, which he has been chuntering about. I have deliberately left the railways out of my equation, because his proposals for those are more complex.

--- Later in debate ---

[Mr Hammond]

I want to make a little progress, but I will give way in a moment.

I have set out our record, but the British people did not get where they are today by admiring their achievements. We have work to do: we have to negotiate our future relationship with the EU; we have to enhance our global competitiveness through raising our productivity; we have to rise to the challenge of sustaining our public services in the face of demographic pressure; we have to address the needs of our population for affordable routes into home ownership; and we have to show the courage and vision to grasp the opportunities ahead. We will meet those challenges head on, as we have always done, with a plan that builds on the strengths of our economy, not one that denigrates them.

Let me say something about our public services and their funding. We all value our public services and the people who provide them to us. Health and social care, education, roads, local authority services, police, fire and rescue, defence and the many, many other services we enjoy all form part of the vital fabric of our society and contribute to the vibrancy of our communities. The challenge of funding those public services is accentuated by the changing age profile of the population, which necessitates a proper debate about how to make the funding of public services sustainable not just next year, but over the decades of demographic change to come. We have to be clear about the choices and what they mean because there are no free lunches or money trees in the real world, and all decisions have consequences.

There are three ways for the Government to increase spending on public services: higher taxes, higher borrowing or higher growth. Higher taxes have a cost in terms of business investment, economic growth and take-home pay. Conservatives are instinctively in favour of keeping taxes as low as possible so that business can continue to create high-quality jobs and hard-working people can keep more of the money that they earn. That is why we reject Labour’s manifesto plan, which would, according to the IFS, take taxation to its highest ever peacetime level. The right hon. Member for Hayes and Harlington is not listening, but—[Interruption.] Pay attention. If he wants to make the case for higher taxation to fund public services, will he at least make this a grown-up debate? Will he at least ask voters whether they want to pay higher taxes to fund public services, not whether they would like someone else to pay higher taxes? As Ed Balls reminds us, in the real world, it is ordinary people who pay.

When we already have an eye-watering amount of debt, higher borrowing makes our economy vulnerable to future shocks. With £1.7 trillion of national debt outstanding and an annual interest bill of £50 billion, even at the current low rates, we should be reducing debt, not increasing it. However, borrowing means something else, too. It means that we are asking the next generations—our children and our grandchildren—to consume less in their lifetimes to pay for our consumption today. That is simply not fair; it is the opposite of sustainable.

[Mark Pawsey]

The Chancellor rightly mentions the interest bill. Will he tell us what would happen to interest rates if the Opposition’s policies were introduced? What would be the impact on the average family’s income?

[Mr Hammond]

As I have already said, if it were ever to look like the shadow Chancellor was anywhere near having his hand on the lever of power, I suspect that his programme, given what we know about his values and principles around the management of the economy, would lead to a pretty sharp rise in interest rates.

We must continue the job of getting our public finances back in order, over a sensible period of time, so that we are living within our means. The shadow Chancellor referred to the decision in my first autumn statement to push back the date on which we will reach fiscal balance. I made that decision to protect our economy during a period of uncertainty due to our exit negotiations from the European Union, therefore giving ourselves a little more headroom to respond should the economy need support. I would have thought that the right hon. Gentleman welcomed that measure.

The only fair and sustainable way to fund better public services, higher real wages, and increased living standards—[Interruption.] I say to the Opposition Front-Bench team that that is absolutely not the way to do it. The only fair and sustainable approach is to increase economic growth through higher productivity. Our plan will support our public services and living standards.