Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 5th March 2019 Commons Chamber

[Mr Hammond]

That is what we are doing. This will be the world’s first plastic tax and it is carefully designed to go with the grain of the market: to incentivise manufacturers to use more recycled plastic in their packaging. Because of that, it creates an effective market for packaging and, together with the producer responsibility note system, will transform the way in which plastic packaging enters the circular economy in this country.

[Peter Dowd (Bootle) (Lab)]

I am pleased that the Chancellor is, apparently, taking the issue of plastic waste seriously. The Government have committed £61.4 million to global research to help to prevent plastic waste from entering the oceans. Given the challenge, is that sufficient?

[Mr Hammond]

It is a good start. The idea is to identify ways in which we can work with countries around the world, including many of our overseas territories, which are particularly vulnerable to this issue, to ensure that we develop effective methods of avoiding plastic waste entering the ocean. Of course the best way to do that is by ensuring that plastics are not created in the first place, or that they are effectively recycled, but avoiding dumping at sea is our No. 1 priority.

[Peter Dowd]

Talking of preventing waste, what with the millions wasted on the ferries fiasco, the drone debacle, the Northern rail mess, the Carillion collapse, the electronic tagging turmoil, the £2 billion East Coast chaos and, finally, £72,000 spent on defending an illegal prisoner book ban, is it not time for the Chancellor, as the custodian of the public finances, to impose a ban on the failing Secretary of State for Transport wasting any more public dosh?

[Mr Hammond]

I am not going to take any lectures about waste from anybody on the Opposition Front Bench. This lot are world-champion wasters of public money. They have done it before and given half a chance they will do it again.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 29th January 2019 Commons Chamber

[Mr Hammond]

We have taken a large number of measures to ensure that all companies pay the appropriate amount of tax, and we have closed a significant number of loopholes that have been used to avoid corporate tax in the past. My hon. Friend will understand that I cannot discuss individual taxpayers at the Dispatch Box, but of course the Government want to see every taxpayer paying the appropriate amount and contributing fairly to the support of our public services.

[Peter Dowd (Bootle) (Lab)]

Bonkers, Mr Speaker. Let me add, respectfully, that I am referring not to you, Sir, but to the response of the Resolution Foundation’s director to the Chancellor’s £6.2 billion corporation tax giveaway. Even the adviser to the previous Chancellor says that the cut represents poor value for money, and the danger is that it will slow progress in reducing the deficit. If the Chancellor is giving away £6.2 billion, does he accept that it would be better given to, for example, cash-strapped local councils, rather providing handouts for cash-rich corporations?

[Mr Hammond]

The Labour party will have to get its act together, and organise a discussion between its Front Benchers and its Back Benchers.

[Mr Hammond]

Well, I know where the deep divisions lie. [Interruption.] We have heard many Opposition Members express concern about a lack of investment and the potential relocation of businesses, but now the hon. Member for Bootle (Peter Dowd) has popped up on the Front Bench suggesting that we hit business with an additional tax charge. Labour is the party that is proposing to increase corporation tax for businesses, including the smallest in our country. We will remain the party that is encouraging businesses, large and small, by ensuring that ours is an attractive jurisdiction for investment to take place.

[Peter Dowd]

Not content with his Government’s manic drive—and there was an example of it—to turn Britain into a bargain basement economy, the Chancellor is splashing out billions of pounds of taxpayers’ money to prop up a no-deal Brexit. Will he come clean and admit that the hard Brexit for which he is reluctantly preparing may lead to increased borrowing, more debt and the widening of the deficit, not to progress in reducing it?

[Mr Hammond]

Some might think it a bit rich for Labour Members to lecture us about increasing deficits and debt, given that their stated policy is to increase the deficit and the debt. Let me be frank with the hon. Gentleman. He has seen the analysis that the Government have published. If we leave the European Union without a deal, yes, it will lead to an increased deficit, and it will lead to an increase in the debt. That is why the Conservatives are working to ensure that we deliver the deal that will protect the British economy. What I do not understand is why Labour Members who genuinely fear a no-deal outcome do not get behind the solution.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 11th December 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

The merely synthetic construct that is before the House has nothing to do with the real concerns of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friend the Member for Huddersfield (Mr Sheerman). It is the dodgy deal—the tuppence-ha’penny Brexit deal—of the Prime Minister. I am led to believe that the Chancellor has ostensibly, but forlornly, attempted to mitigate the Prime Minister’s disastrous handling of Brexit. If that is the case, will he continue his endeavours by using the powers in section 31 of the Taxation (Cross-border Trade) Act 2018 to maintain the UK in a customs union with the EU?

[Mr Hammond]

It is not the Government’s policy to maintain a permanent customs union with the European Union. Opposition Front Benchers often offer a customs union as if it were a magical solution, but it will not deliver us frictionless borders; it will introduce regulatory friction at our borders with the European Union, and it will introduce regulatory friction between Northern Ireland and the Republic of Ireland.

[Peter Dowd]

The Chancellor’s answer shows that, just like Parliament yesterday, we have been treated with contempt by him, and he has been treated with contempt by the Prime Minister and brushed aside. Let me ask him again: in the national interest—not the Tory party’s interest, or his own interest—at what point will he break cover and use the powers in section 31 of the Act which he initiated and which his Ministers guided through Parliament? Or is this just another Tory parliamentary sham?

[Mr Hammond]

Those powers are there specifically to deal with the customs union that we will need to create with the Crown dependencies, not for the purpose that the hon. Gentleman is suggesting.

Financial Statement

Debate between Lord Hammond of Runnymede and Peter Dowd

Monday 29th October 2018 Commons Chamber

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

Today, I present to the House a Budget for Britain’s future: a Budget that shows the perseverance of the British people finally paying off; a Budget for hard-working families who live their lives far from this place and care little for the twists and turns of Westminster politics. People who get up early every morning, who open up factories, shops, and building sites, drop their kids off at school, check on elderly relatives and neighbours—the strivers, the grafters and the carers who are the backbone of our communities and our economy. People who ask only of Government that we protect the jobs that put food on their table; that we deliver the public services their families rely on; and that we do it efficiently, minimising the amount of tax we need to take from their hard-earned wages. People who Conservative Members are proud to represent. So I say to them today: this Budget is unashamedly for you.

The British people put their faith in us to do the job, and today we repay that trust with a Budget that paves the way for a brighter future. Let me be clear why. The tough decisions of the past eight years were not driven by ideology—[Interruption.] They were not driven by ideology—they were driven by necessity and by Labour’s failure in government which led to our deficit soaring to a post-war record and our economy suffering the deepest recession since the second world war. That was our inheritance and, as ever, we did what needed to be done.

Now we have reached a defining moment on this long, hard journey, opening a new chapter in our country’s economic history where we can look confidently to the future and set our course for where this remarkable country will go next. Because today, I can report to the British people that their hard work is paying off, and the era of austerity is finally coming to an end.

I am sure that like me, many Members of the House keenly remember the last Budget delivered on a Monday. It was 1962: I was six years old. Tensions between Russia and the United States were rising, and a former Foreign Secretary turned Chancellor delivered a Budget amid Cabinet revolt. I am acutely aware of the phenomenon of false memory, but I could swear that I remember my parents turning to me and saying, “Philip, one day that could be you.”

The media have been full of speculation about the timing of today’s Budget. Some were hoping for a December Budget. I am sure the headline writers were ready with something like “Spreadsheet Phil turns Santa Claus”. Others were desperate for it to be on Wednesday—“Hammo House of Horrors” perhaps. But the truth is that by choosing today rather than Wednesday, I have not avoided the blood-curdling threats, the anguished wailing and the strange banging of furniture that is usually associated with Wednesday; I have been kindly invited to a special meeting of the 1922 committee this evening.

Our economy continues to confound those who talk it down, and we continue to focus resolutely on the challenges and opportunities that lie ahead as we build a new relationship with our European neighbours and a new future outside the European Union. But as we do so, let us not forget the remarkable achievements of the British people in clearing up the aftermath of Labour’s great recession. Because for all Labour’s carping and relentless negativity, talking Britain down at every opportunity, we the British people have a record to be proud of: eight straight years of economic growth; over 3.3 million more people in jobs; higher employment and lower unemployment in every region and every nation of the United Kingdom; wages growing at their fastest pace in almost a decade; income inequality lower now than at any time under the last Labour Government; an economy back on its feet again; an economy working not for the few, and not even for the many—an economy working for everyone.

We are at a pivotal moment in our EU negotiations, and the stakes could not be higher. Get it right, and we will not only protect Britain’s jobs, businesses and prosperity, but harvest a double “deal dividend”: a boost from the end of uncertainty, and a boost from releasing some of the fiscal headroom that I am holding in reserve at the moment. We are confident that we will secure a deal which delivers that dividend—confident, but not complacent. So we will continue to plan for all eventualities, and I will do so at this Budget with a three-pronged approach.

First, I have already allocated £2.2 billion to Departments for Brexit preparations, and in the autumn Budget last year I set aside a further £1.5 billion to be allocated for 2019-20. Today I am increasing that sum to £2 billion, and in the coming weeks the Chief Secretary will announce allocations to individual Departments.

Secondly, I shall today maintain the headroom to my fiscal rules broadly as set out in the spring statement, retaining firepower to intervene if the economy needs more support in the coming months. Thirdly, as I have been clear since moving to an autumn Budget, if the economic or fiscal outlook changes materially in-year, I will take whatever action is appropriate, if necessary upgrading the spring statement to a full fiscal event. The House can be confident that we are working for the best outcome for Britain and preparing for every eventuality.

I shall first report to the House on the economic forecasts of the independent Office for Budget Responsibility, and I thank Robert Chote and his team, once again, for their excellent work. The OBR expects growth to be resilient across the forecast period, improving next year from the 1.3% forecast at the spring statement to 1.6%; then 1.4% in 2020 and 2021; 1.5% in 2022; and 1.6% in 2023.

This Government have prioritised getting people into work because the best way to help people is to provide them with the stability of a pay packet every month. Since 2010, over 3.3 million more people are in work, and today the OBR confirms Britain’s “jobs miracle” is set to continue—revising up participation in the labour market, revising down the country’s equilibrium unemployment rate and predicting 800,000 more jobs by 2023. By my calculation, that is over 4.2 million net new jobs since 2010, making the shadow Chancellor’s prediction of 1.2 million jobs lost out by just the tiniest margin of 5.4 million people—roughly the population of Scotland.

But now we need to focus on pay, and with the proportion of low-paid jobs at its lowest since 1997, with regular pay growth at 3.1%—its strongest in almost a decade—and inflation forecast to average 2% next year, the OBR is forecasting sustained real wage growth in each of the next five years, which is a far cry from the dismal picture that the Leader of the Opposition is so desperate to paint every Wednesday.

I turn now to the fiscal forecast. We inherited the highest budget deficit in our peacetime history, but after eight years the hard work of the British people is paying off, and we will not squander their efforts. Today’s forecast, taking into account all announcements made since the spring statement, including measures I shall announce today, shows the deficit down from almost 10% under Labour to less than 1.4% next year under this Conservative Government, and falling to just 0.8% by 2023-24. Borrowing this year will be £11.6 billion lower than forecast at the spring statement—just 1.2% of GDP —and is then set to fall from £31.8 billion in 2019-20 to £26.7 billion in 2020-21, £23.8 billion in 2021-22, £20.8 billion in 2022-23 and £19.8 billion in 2023-24, its lowest level in over 20 years.

So we meet our structural borrowing target three years early and deliver borrowing of just 1.3% of GDP in 2020-21, maintaining £15.4 billion headroom against our 2% fiscal rules target. We are no longer borrowing at all to finance current spending, and today the OBR confirms that our national debt peaked in 2016-17 at 85.2% of GDP, and then falls in every year of the forecast from 83.7% this year to 74.1% in 2023-24. That is lower in every year than forecast at the spring statement, and it means that we meet our target to get debt falling three years early: a turning point in our nation’s recovery from Labour’s great recession—both our fiscal rules met, both of them three years early—so Fiscal Phil says, “Fiscal Rules OK”.

While we are working to get Britain’s debt down, to end the nightmare of wasting over £50 billion a year on interest, the party opposite would do the opposite. Labour’s plans would increase tax and borrowing by £1,000 billion, taking our debt to GDP ratio soaring to well over 100% of GDP—a reckless and irresponsible policy from a reckless and irresponsible party.

I have always been clear: sound public finances are essential, but they are not an end in themselves. So since I have been Chancellor I have taken a balanced approach, putting an additional £60 billion into our public services and investment in our future, cutting tax for 31 million people, and all the while reducing borrowing and getting our national debt falling. Now, we must do more, and thanks to the hard work of the British people, in this Budget we can do more.

I said at the spring statement that our careful management of the public finances was beginning to pay off, and that if the improvement we saw then continued, I would be able to provide more support to our public services on a sustainable basis. Today, the OBR confirms a significant improvement in our public finances—an upgrade that underscores the hard work of the British people and this Government’s stewardship of the economy since 2010, and means that I can deliver on the promise I made in the spring, setting out a new path for public spending and a clear view for the British people of the fruits of their hard work.

Next year, we will conduct a full spending review, setting our priorities for public spending within a sustainable funding envelope, deciding on the right balance between investing in Britain’s future and current consumption of public services. Today, I have set out an indicative five-year path for departmental resource spending—RDEL, as it is known to aficionados of public finance. To give context, in spending review 2010, average annual real growth was minus 3%; in spending review 2015, it was minus 1.3%; from next year, average annual real growth will be plus 1.2%—but that is not the limit of my ambition. When our EU negotiations deliver a deal, as I am confident they will, I expect that the deal dividend will allow us to provide further funding for the spending review. The hard work of the British people is paying off; austerity is coming to an end.

Mr Deputy Speaker, you will know better than most that every Chancellor likes to have a rabbit or two in his hat as he approaches a Budget, but this year, some of my star bunnies appear to have escaped just a little bit early. In June, my right hon. Friend the Prime Minister announced the single largest cash commitment to our public services ever made by a peacetime Government—an £8.4 billion five-year deal for our precious NHS, half as much again as the increase Labour offered the NHS at the last election. Let me be clear: we are delivering this historic £20.5 billion real-terms increase for the NHS in full over the next five years. So in a very important sense, we made our big choice for this Budget four months before it was delivered.

This was the right decision. Our NHS is the No. 1 priority of the British people, and as we approached the 70th anniversary of its foundation, they had a right to know the scale of our commitment to it. But the British people also care that money invested in the NHS goes to the frontline and to improvements in services, so we did not just hand over money; we agreed that the NHS would produce a 10-year plan, setting out how the service will reform, how waste will be reduced, and exactly what the British people can expect to get for their money.

That plan will be published shortly, but I shall give the House a sneak preview today. [Hon. Members: “Ooh!”] I, too, can poach a rabbit every now and then.

There are many pressing demands on additional NHS funding, but few more pressing than the needs of those who suffer from mental illness. Today, I can announce that the NHS 10-year plan will include: a new mental health crisis service with comprehensive mental health support available in every major A&E; children and young peoples’ crisis teams in every part of the country; more mental health ambulances; more “safe havens” in the community; and a 24-hour mental health crisis hotline. These new services will ensure that people suffering from a crisis, young or old, can get the help they need, ending the stigma that has forced too many to suffer in silence and ending the tragedy of too many lives lost to suicide. We are proud to have made this extraordinary commitment to funding our NHS, a precious institution that has been nurtured for most of its life by Conservative Governments.

Departmental spending allocations with be settled at the spending review next year. However, there are a small number of areas where I will provide further support now in order to deliver necessary certainty for forward planning. Local government has made a significant contribution to repairing the public finances and this Budget ensures local councils have more resources to deliver high-quality public services. We are giving councils greater control over the money they raise: through the adult social care precept; through our plans for increased business rate retention from 2020; and by removing the housing revenue account cap, so that councils can help to build the homes this country needs.

We will shortly publish our Green Paper on the future of social care, setting out the choices, some of them difficult, for making our social care system sustainable into the future. But I recognise the immediate pressures local authorities face in respect of social care. So today, building on the £240 million for social care winter pressures announced earlier this month, I will make available a further £650 million of grant funding for English authorities for 2019-20, and an additional £45 million for the disabled facilities grant in England in 2018-19. We will invest a further £84 million over the next five years to expand our successful children’s social care programmes to 20 further councils with high or rising numbers of children in care, allowing councils to improve services for older people, for people with disabilities and for children in care now, while longer-term funding decisions will be made at the spending review.

The UK spends more on defence than any NATO member except the US, but over the past year we have had stark reminders of the scale, scope and complexity of the threats we face. My right hon. Friend the Defence Secretary is working with the Cabinet Office and the Treasury to conduct a review into the modernisation of our armed forces in response to the evolving threat, which will form the basis for a comprehensive consideration of defence spending next year. As a former Defence Secretary myself, I understand the immediate pressures our armed forces are facing, so I will today provide an additional £1 billion to the Ministry of Defence to cover the remainder of this year and next to boost our cyber capabilities and our anti-submarine warfare capacity, and to maintain the pace of the Dreadnought programme to ensure continuous at-sea deterrence, a deterrent that allows us to sleep easy in our beds, but one that the Leader of the Opposition and the shadow Chancellor have spent their political lifetimes campaigning to abolish. Nobody should be in any doubt that those of us on the Government Benches are proud of our armed forces and we will always back them with the investment they need to keep this country safe.

It is not only our armed forces who keep us safe. Our counter-terrorism police play a vital role in defending Britain against the evolving threats we face. We committed in 2015 to spend 30% more on counter-terrorism capabilities over the current spending review period. And today I commit an additional £160 million of CT police funding for 2019-20 to protect CT police numbers in 2019-20 and to allow future CT police funding to be considered in the round at the spending review.

I recognise that policing more generally is under pressure from the changing nature of crime. I also recognise the representations made on this by many colleagues, such as my hon. Friend the Member for South West Bedfordshire (Andrew Selous), and I can tell the House today that my right hon. Friend the Home Secretary will review police spending power and further options for reform when he presents the provisional police funding settlement in December.

As I have already set out, due to the hard work of the British people, public borrowing this year is coming in substantially below forecast. This allows us to provide additional support for public services in the spending review and contributes to the significant reduction in forecast debt this year. But I also want to use this good news to give a little bit back, where it can be put to good use, in this financial year.

This year marks a century since the end of the first world war. And as we remember our fallen servicemen and women whose sacrifice ensured the freedom we enjoy today, many projects are raising money for veterans’ charities from sales of commemorative items on which VAT is charged. We cannot waive the VAT due on these sales, but we can make a donation with the VAT we will receive, and I commit today that the Treasury will mark the centenary of the armistice by making a donation of £10 million to the Armed Forces Covenant Fund Trust to support veterans with mental health needs.

Many of our nation’s village halls were built to commemorate the sacrifice of world war one, and many of them are being refurbished to commemorate the centenary. So I will also provide funding for grants equivalent to the VAT chargeable on such refurbishment projects. And as our focus moves from the anniversaries of the first world war to the second, I will also provide £1.7 million for educational programmes in schools to mark the 75th anniversary of the liberation of the Bergen-Belsen concentration camps, ensuring that the next generation hears the stories of those who survived the holocaust and of the British soldiers who liberated them, because as the terrible events in Pittsburgh this weekend remind us, the battle against antisemitism did not end with the defeat of Nazi Germany.

Across the length and breadth of England, our air ambulance services work tirelessly to get those with life-threatening illnesses and injuries quickly to the expert medical care they need. Funded entirely by philanthropy, they do a fantastic job, and today I am making £10 million of funding available to help them to go on doing so.

We are investing record amounts in our schools and that investment is paying off, with 86% of schools now rated good or outstanding, compared with 68% in 2010. But I recognise that school budgets often do not stretch to that extra bit of kit that would make such a difference. So today I am announcing a £400 million in-year bonus to help our schools buy the little extras they need—a one-off capital payment directly to schools, averaging £10,000 per primary school and £50,000 per secondary school.

I have one final in-year measure to announce: every Member of Parliament will testify that potholes are high on the public’s list of concerns. So as autumn takes hold, I am making an additional £420 million available immediately to local highway authorities to tackle potholes, bridge repairs and other minor works in this financial year.

But if we want sustainable world-class public services and rising living standards, we must make the serious long-term reforms our economy needs to tackle the productivity challenge, to prepare our nation for the technological change ahead and to show the next generation that our market economy can evolve once again to meet the needs of the new age. That is because, for us on the Government Benches, ending austerity is not just about funding public services; it is about real wage growth and leaving more of people’s hard-earned money in their pockets. This is the nation of the industrial revolution, of Stephenson, Whittle, Lovelace and Faraday—people whose ideas shaped the world around them—and today Britain once again can lead the world as we exploit a new wave of scientific and technological discovery pouring out of our universities and research institutes. We can solve the productivity challenge if we are willing to embrace the future, to make the choice to invest in infrastructure, research, skills and our regions, to manage change, not hide from it.

I believe passionately in this agenda, but even I would admit that at the last two Budgets I might have given the House just a little more detailed information on productivity and technological innovation than it strictly needed, so this time I will leave it to the Budget Red Book to set out more detail of the many measures we will take today. [Hon. Members: “More!”] Sensing the disappointment of my colleagues, I will just mention that the list in the Budget Red Book includes our commitment to technology, with £1.6 billion of new investments to support our modern industrial strategy, ranging from nuclear fusion to quantum computing; £150 million for fellowships to attract the brightest talent to these shores from around the world so that our scientific research can continue to lead the world; and our commitment to infrastructure, including our expanding of the national productivity investment fund once again to over £38 billion by 2023-24, so that over the next five years total public investment will grow by 30% to its highest sustained level in 40 years and will on average be an astonishing £460 million a week higher, in real terms, than under the last Labour Government. This is a Conservative Government investing in the roads, the railways, the research and the digital infrastructure that will power this country in the 21st century.

Half of the UK’s £600 billion infrastructure pipeline will be built and financed by the private sector. In financing public infrastructure, I remain committed to the use of public-private partnership where it delivers value for the taxpayer and genuinely transfers risk to the private sector, but there is compelling evidence that the private finance initiative does neither. The shadow Chancellor, of course, rages against PFI at every opportunity yet curiously forgets to mention that nearly 90% of those contracts were agreed by the last Labour Government. That has left the nation with a bill of more than £200 billion to pay off and would be the most potent symbol of the economic mismanagement of the last Labour Government, if only Gordon Brown hadn’t sold the gold.

Labour’s policy is to terminate all these contracts, triggering the ruinous penalty clauses that the Labour Government themselves agreed to in the first place and adding tens of billions more to an already enormous bill. It is a classic Labour solution: pouring good money after bad. I will not do that—we will honour existing contracts—but the days of the public sector being a pushover must end. We will establish a centre of excellence to actively manage these contracts in the taxpayers’ interest, starting in the health sector, but we will go further. I have never signed off a PFI contract as Chancellor, and I can confirm today that I never will. I can announce that the Government will abolish the use of PFI and PF2 for future projects, putting another legacy of Labour behind us.

We are investing in our nation’s infrastructure and backing the technologies of the future, but we know that the real engine of growth is enterprise. The right hon. Member for Hayes and Harlington (John McDonnell) lists

“fermenting the overthrow of capitalism”

as his pastime.

Mine is “reinvigorating capitalism for the digital age”, because I want Britain to be one of the great winners of the technological revolution. On this side of the House, we will always back enterprise and the market economy that underpins it, because we know that it is the only way to deliver the high-wage, high-skill economy of the future.

As we finalise our departure from the EU and deliver a deal that secures Britain’s future trade, we must unleash the investment that will drive our future prosperity. So today I can announce a package of measures to stimulate business investment and send a message loud and clear to the rest of the world: Britain is open for business. I am increasing the annual investment allowance from £200,000 to £1 million for two years, delivering on a long-standing ask of the British Chambers of Commerce; I am providing a targeted relief for the cost of acquiring intellectual property-rich businesses; and I am introducing a permanent tax relief for new non-residential structures and buildings, partly funded by an adjustment in the special writing-down rate for long-life assets from 8% to 6% to better align the tax and accounting treatment of these assets.

To support British exports, we will increase UK Export Finance’s direct lending facility by up to £2 billion. We will open the use of e-passport gates at Heathrow and other airports, currently only available to European economic area nationals, to include visitors from the United States, Canada, New Zealand, Australia and Japan. We will provide an additional £200 million of funding for the British Business Bank to replace access to the European investment fund, if needed. We will back another 10,000 entrepreneurs by extending start-up loans funding to 2021. Following representations from the Federation of Small Businesses, I am extending the new enterprise allowance, providing mentoring and support for benefit claimants to get their business ideas off the ground.

With thanks to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), we are working with the Financial Conduct Authority on expanding access to the Financial Ombudsman Service for larger small and medium-sized enterprises. As well as backing businesses to invest and grow, we will make sure that British workers are equipped with the skills that they need to thrive and prosper. We have introduced a new system of T-level vocational training, we have put the first £100 million into the new national retraining scheme, and, through the apprenticeship levy, we are delivering 3 million high-quality apprenticeships in this Parliament. But that system is paid for by employers, and it has to work for employers. So today, in addition to the flexibilities that I announced earlier this month, I can announce that for smaller firms taking on apprentices we will halve the amount that they must contribute from 10% to 5%. In total, this is a £695 million package to support apprenticeships.

As our economy evolves in the digital age, so too must our tax system, to ensure that it remains fair and robust against abuse, and raises the revenues that we need to fund our public services. The employment allowance was introduced to incentivise businesses to take on employees, but at a flat rate of £3,000 per employer, it does not provide any real incentive for larger employers. So from April 2020, we will target it at small and medium businesses with an employer’s national insurance bill of less than £100,000 a year. We will also bring the treatment of capital losses for the largest companies into line with that of income losses.

We recommit ourselves today to keeping family homes out of capital gains tax, but some aspects of private residence relief extend it beyond that objective, and provide relief for people who are not using the home as their main residence. So from April 2020, we will limit lettings relief to properties where the owner is in shared occupancy with the tenant, and reduce the final period exemption from 18 months to nine months.

I have received representations that I should abolish entrepreneur’s relief and put the savings towards funding our NHS commitments, but I do not believe we can have sustainable public services unless we have a dynamic economy, and encouraging entrepreneurs must be at the heart of any strategy for a dynamic economy, so I will retain entrepreneur’s relief, but to ensure it is going to genuine entrepreneurs, I will extend the minimum qualifying period from 12 months to two years.

In the period since the last Budget, we have explored all avenues to address the cliff-edge effect of VAT registration, but our options are restricted by EU law. We will continue to work on this issue as our future VAT regime becomes clear over the years ahead, and in the meantime, to give small businesses certainty and in response to representations from my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), the Federation of Small Businesses and others, I will leave the threshold unchanged for a further two years.

The off-payroll working rules, known as IR35, are designed to ensure fairness so that individuals working side by side in a similar role for the same employer pay the same employment taxes. Last year, we changed the way these rules are enforced in the public sector, but widespread non-compliance also exists in the private sector, so following our consultation, we will now apply the same changes to private sector organisations as well. But after listening carefully to representations made—including many from right hon. and hon. Friends—during the consultation, we will delay these changes until April 2020, and we will only apply them to large and medium-sized businesses.

There is one standout example of where the rules of the game must evolve now if they are to keep up with the emerging digital economy. Digital platforms delivering search engines, social media and online marketplaces have changed our lives, our society and our economy, mostly for the better, but they also pose a real challenge for the sustainability and fairness of our tax system. The rules have simply not kept pace with changing business models, and it is clearly not sustainable or fair that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business. The UK has been leading attempts to deliver international corporate tax reform for the digital age. A new global agreement is the best long-term solution, but progress is painfully slow. We cannot simply talk forever, so we will now introduce—[Interruption.] We will now introduce a UK digital services tax. This will be a narrowly targeted tax on the UK-generated revenues of specific digital platform business models. It will be carefully designed to ensure it is established tech giants, rather than our tech start-ups, that shoulder the burden of this new tax.

It is important that I emphasise that this is not an online sales tax on goods ordered over the internet; such a tax would fall on consumers of those goods, and that is not our intention. The digital services tax will only be paid by companies that are profitable and that generate at least £500 million a year in global revenues in the business lines in scope. We will consult on the detail to make sure we get it right and to ensure that the UK continues to be the best place in the world to start and scale-up a tech business. The tax will come into effect in April 2020 and is expected to raise over £400 million a year.

In the meantime, we will continue to work at the OECD and G20 to seek a globally agreed solution, and if one emerges, we will consider adopting it in place of the UK digital services tax, but this step shows that we are serious about this reform, because it is only right that these global giants with profitable businesses in the UK pay their fair share towards supporting our public services. I am already looking forward to my call from the former leader of the Liberal Democrats.

We are updating the rules of the game, but we must also make sure people play by the rules. And today we continue the work of the past eight years, where we have secured £185 billion since 2010 that would otherwise have gone unpaid, with a package of measures today to further clamp down on tax avoidance, evasion and unfair outcomes, raising another £2 billion over the next five years. We will make HMRC a preferred creditor in business insolvencies, to ensure that tax that has been collected on behalf of HMRC is actually paid to HMRC. We will end the practice of purchasing services through overseas branches to avoid UK VAT, and we will crack down on insurance companies routing services through offshore territories. And we will stop our generous R&D tax credits system being abused by reintroducing a PAYE restriction for the small and medium-sized companies scheme. Labour talk tough on tax avoidance and evasion. We take action.

Investing in our infrastructure, backing the technologies of the future, supporting British businesses, and updating our tax system for the digital age—that is how we will deliver the high-wage, high-skill economy of the future. But we must also recognise that technological change will bring challenges as well as opportunities, and there is one part of our economy that is currently confronting that challenge in spades: our high streets. Embedded in the fabric of our great cities, towns and villages, the high street lies at the heart of many communities, and it is under pressure as never before as Britain adopts online shopping with greater alacrity than any other large economy. So if Britain’s high streets are to remain at the centre of our community life, they will need to adapt. Today, we support them to do so, responding to calls from across this House, especially from my right hon. Friend the Member for Putney (Justine Greening) and my hon. Friends the Members for Southport (Damien Moore) and for Croydon South (Chris Philp).

We will provide £675 million of co-funding to create a future high streets fund to support councils to draw up formal plans for the transformation of their high streets, to invest in the improvements they need and to facilitate redevelopment of under-used retail and commercial areas into residential, at one and the same time helping with the housing challenge and delivering much-needed footfall to high street businesses. We will consult on how modernisation of the use classes order and compulsory purchase order regime can help to facilitate the transformation of the high street.

The change our high streets face is irreversible and it will take them time to adapt to it, but I know that many small retail businesses are struggling to cope with the high fixed costs of business rates. Since 2016, we have introduced business rates relief measures worth £12 billion, and many of these reliefs will have benefited high street businesses, but today I can go further. At the next revaluation, in 2021, rateable values will adjust to reflect changes in rental values, but I want to help retail businesses now. So for the next two years, up to that revaluation, for all retailers in England with a rateable value of £51,000 or less, I will cut their business rates bill by a third. That is an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafés. I will also extend the £1,500 local newspaper discount for a further year. Whatever the national press says, I have been assured of a warm welcome for my Budget from the Royston Crow and The Keswick Reminder.

Local authorities have long been able to provide discretionary business rates relief to other bodies, but not to themselves. And so following representations from my hon. Friends the Members for North Cornwall (Scott Mann) and for St Austell and Newquay (Steve Double), I am pleased to announce a new mandatory business rates relief for public lavatories, so that local authorities can, at last, relieve themselves. For the convenience of the House, Mr Deputy Speaker, and without wishing to get unduly bogged down in the subject, this relief—

[Peter Dowd (Bootle) (Lab)]

Toilet humour.

[Mr Hammond]

Well, at least I am demonstrating that we are all British. This relief will extend to any such facilities made available for public use, whether publicly or privately owned. I can honestly say that that is virtually the only announcement in this Budget that has not leaked. [Hon. Members: “More!”]

We cannot resolve the productivity challenge or deliver the high standards of living that the British people deserve without fixing our housing market. In last year’s Budget, I launched a five-year, £44 billion housing programme to deliver the biggest increase in housing supply since 1970, and I abolished stamp duty for first-time buyers on properties up to £300,000. Some 121,500 first-time buyers have already benefited from our new relief, and the number of first-time buyers is at an 11-year high. Today, I am extending that relief to all first-time buyers of shared ownership properties valued up to £500,000, and I will make the relief retrospective so that any first-time buyer who has made such a purchase since the previous Budget will benefit.

But we have more to do, so I can announce today a further £500 million for the housing infrastructure fund to unlock a further 650,000 homes, the next wave of strategic partnerships with nine housing associations, which will deliver 13,000 homes across England, and up to £1 billion of British Business Bank guarantees to support the revival of SME housebuilders. We are consulting on simplification of the process for conversion of commercial property into new homes, and because we want to see parishes and neighbourhoods enabling more homes for sale to local people to buy at prices they can afford, we are providing funding to empower up to 500 neighbourhoods to allocate or permission land for housing through the neighbourhood planning system for sale at a discount to local people in perpetuity.

I am also grateful to my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) for his review of build-out rates, published today. He concludes that the large housebuilders are not engaged in systematic speculative land banking—[Interruption.] Perhaps Opposition Members would like to read the report. My right hon. Friend makes several recommendations for reform of the planning system in respect of large strategic housing sites, and we will respond to his report in full in the new year.

Meeting the productivity challenge means tapping the potential of every region and nation. Our devolution agenda is giving power back to the people, and today we go further to fire up the northern powerhouse, fuel the midlands engine and back our regions across the UK. We are increasing the transforming cities fund to £2.4 billion and providing an additional £90 million to trial new models of smart transport, including on-demand buses—I think, Mr Deputy Speaker, that is what we used to call taxis in our day. We are launching a competition for proposals for business-led development corporations. We are funding 10 university enterprise zones. There is £115 million for digital catapults in the north-east, Northern Ireland and the south-east and for the medicines discovery catapult in Alderley, £70 million to develop the Defence and National Rehabilitation Centre near Loughborough, £37 million of additional development funding for northern powerhouse rail, and £10 million for a new pilot in Manchester to support the self-employed to acquire new skills. We are backing a new special economic area in south Tees, and we are providing £20 million to further develop the plan for the critical central section of east-west rail between Oxford and Cambridge. And here, in our capital, we support the delivery of a further 19,000 homes by improving the docklands light railway with housing infrastructure fund money.

The decisions announced in this Budget mean, in 2020-21, an additional £950 million for the Scottish Government, £550 million for the Welsh Government and £320 million for a Northern Ireland Executive. Obviously, there are much larger sums to come, as we move ahead over the spending review period with our NHS funding change.

I can also announce funding for further city and growth deals, including £150 million for Tay Cities, £350 million for Belfast and £120 million for North Wales, while negotiations progress with Ayrshire, Mid Wales and Borderlands, and will begin with Moray, Derry/Londonderry and Strabane as well.

I was pleased to be able to respond to a joint request from the right hon. Member for Belfast North (Nigel Dodds) and the hon. Members for Belfast East (Gavin Robinson) and for Belfast South (Emma Little Pengelly) to provide the city with £2 million of help towards the recovery of the city centre following the fire at the iconic Bank Buildings, and we are also moving forward with schools projects in Northern Ireland worth £300 million to increase the provision of shared and integrated cross-community education. And we have agreed to the establishment of a working group to progress plans for short-haul air passenger duty devolution.

To continue to support Scotland’s oil and gas industry, we will maintain headline tax rates at their current level and launch a call for evidence on our plan to make Scotland a global hub for decommissioning. Finally, to support our vital fishing industry as we leave the EU, we will invest £12 million over the next three years in cutting-edge fisheries technology and safety measures.

A Conservative Government delivering for all our proud nations and for all our English regions, driving growth and prosperity across our United Kingdom.

We are driven by a determination to ensure that the next generation will be more prosperous than ours, but we cannot secure our children’s future unless we secure our planet’s future. So at this Budget I take further action with a package of measures, set out in the Red Book, to ensure that we leave our environment in a better state than we inherited it.

There is one particular measure I want to mention. The shadow Chancellor’s recent accident has reminded us all of how dangerous abandoned waste can be, so I will provide £10 million to deal with abandoned waste sites, although I cannot guarantee to the House that £10 million is going to be enough to stop him falling flat on his face in the future.

I also said at the spring statement that we must become a world leader in tackling the scourge of plastic littering our planet and our oceans. Billions of disposable plastic drinks cups, cartons, bags and other items are used every year in Britain—convenient for consumers, but deadly for our wildlife and our oceans. Where we cannot achieve reuse, we are determined to increase recycling, so we will introduce a new tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic, transforming the economics of sustainable packaging. We will consult on the detail and implementation timetable.

I have also looked carefully at the case for introducing a levy on the production of disposable plastic cups—not just for coffee, but for all types of beverage—and I have concluded that a tax in isolation would not, at this point, deliver a decisive shift from disposable to reusable cups across all beverage types. I will monitor carefully the effectiveness of the action which the takeaway drinks industry is already taking to reduce single-use plastics, and I will return to this issue if sufficient progress is not made. In parallel, my right hon. Friend the Environment Secretary will look to address this issue through the reform of the packaging producer responsibility scheme. Working across government, this ambitious package reflects our determination to lead the world in the crusade to rid the oceans and the environment of plastic waste.

It is only by dealing with our debts and tackling the long-term challenges our country faces that we can sustainably raise wages and living standards. But I recognise that many people are feeling pressure on their household budgets now, and because the hard work of the British people is paying off, I am pleased to be able to announce today a series of measures to help families across Britain with the cost of living.

Turning first to duties, as my right hon. Friend the Prime Minister has already announced, we will freeze fuel duties for the ninth successive year, bringing the total saving to the average car driver to over £1,000 and to the average van driver to over £2,500. The tobacco duty escalator will continue to rise at inflation plus 2%. I have received numerous representations from my right hon. and hon. Friends on one particular subject, and in response I will be freezing beer and cider duty for the next year, keeping the cost of beer down for patrons of the great British pub. And in response to the concerted lobbying of my Scottish Conservative colleagues, I will also freeze duty on spirits, so that we can all afford to raise a wee dram to Ruth Davidson on the arrival of baby Finn, saving 2p on a pint of beer, 1p on a pint of cider and 30p on a bottle of Scotch or gin compared with the inflation assumption in the OBR forecast, while proceeding with the usual RPI increases on wine.

As promised at the autumn Budget 2017, so-called “white ciders” will be taxed at a new higher rate. From October next year, I can confirm that we will increase remote gaming duty on online games of chance to 21%, in order to fund the loss of revenue as we reduce FOBT—fixed odds betting terminals—stakes to £2.

From April 2020, APD—air passenger duty—will be indexed in line with inflation, but there will be no change in the duty rate for short-haul flights. The new 26-30 railcard, which I announced at Budget last year, will be available across the network by the end of the year, saving up to 4.4 million young people one third off their fares, and we launch a package of measures on affordable credit and support for credit unions, which is set out in detail in the Red Book.

The switch to universal credit is a long overdue and necessary reform. It replaces the broken system left by the last Labour Government, a system that trapped millions on out-of-work benefits for nearly a decade. This is not just a welfare measure; it is a major structural reform to our economy that will help to drive growth and employment in the years ahead, and I pay tribute to my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), without whose tenacity universal credit would never have seen the light. However, I recognise the genuine concerns among many right hon. and hon. Friends about two issues, the first of which is the implementation of this programme. It is an enormous undertaking and we have always been clear we want the migration process to be as smooth as possible. I have already delivered nearly £3.5 billion to help with the transition, including a £1.5 billion package of support at last year’s Budget. Today I can go further, with a package of measures worth £1 billion over five years—[Interruption.] What a surprise. What a surprising response from the Opposition Front-Bench team. It is a package of measures to aid the transition worth £1 billion over five years, enabling my right hon. Friend the Secretary of State for Work and Pensions to introduce additional protections as existing welfare claimants move on to UC. She will announce details when she introduces the managed migration regulations later this year.

Secondly, I have heard the concerns about the rates and allowances within the design of the system. In my first autumn statement, I reduced the UC taper rate from 65% to 63%. Today, I can tell the House that I am increasing work allowances in universal credit by £1,000 per annum, at a cost of £1.7 billion annually once roll-out is complete. That will benefit 2.4 million working families with children and people with disabilities by £630 per year. Universal credit is here to stay, and we are putting in the funding it needs to make it a success because, on this side of the House, we believe that work should always pay.

Delivering higher wages for those in work is core to my mission as Chancellor. Under this Conservative Government, the poorest 20% have seen their real incomes grow faster than the richest 20%, and the proportion of jobs that are low paid is at its lowest level for 20 years, thanks to the national living wage introduced by a Conservative Government in 2016. From April, it will rise again, by 4.9%, from £7.83 to £8.21, handing a full-time worker a further £690 annual pay increase and taking his or her total pay rise since the introduction of the national living wage to more than £2,750 a year.

We accept the Low Pay Commission’s recommendations on national minimum wage rates and will support young people and apprentices with further above-inflation increases. The Low Pay Commission’s current remit is for the national living wage to reach 60% of median earnings by 2020, subject to sustained economic growth. Next year, we will give the Low Pay Commission a new remit, beyond 2020. We will want to be ambitious, with the ultimate objective of ending low pay in the UK. We will also want to be careful, protecting employment for lower-paid workers, so we will engage responsibly with employers, the TUC and the Low Pay Commission itself over the coming months, gathering evidence and listening to views to ensure that we get it right. I will confirm the final remit at the Budget next year.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 22nd May 2018 Commons Chamber

[Mr Hammond]

We have taken steps that I have already outlined this morning to reduce the burden of taxation on businesses large and small, although of course small businesses are most beneficially affected by the £10 billion programme of reducing business rates costs and through the reduction in corporation tax levels. But we are always looking for further ways to support the smallest businesses and to encourage them to become larger businesses.

[Peter Dowd (Bootle) (Lab)]

I associate myself with the Chancellor’s remarks about the Manchester bombing.

For the Chancellor to make up his own small business tax policies on the hoof is one thing; making them up for the Labour party is a fantasy. The Government have ruled out a customs union with the European Union worth £16 trillion for an alternative customs union with British overseas territories worth only £22 billion. Is the Chancellor happy with that decision? Can he give us any clue about how such a decision will support businesses and entrepreneurs?

[Mr Hammond]

I do not know whether that was an announcement of a change in Labour party policy. My understanding is that the Labour party’s position is to increase corporate tax rates for small businesses. Perhaps the hon. Gentleman will tell us whether he has changed his position.

On the question of our future customs arrangements with the European Union, the hon. Gentleman will know that I have consistently sought arrangements that will protect our existing trade with the European Union, allowing British businesses to continue to trade freely with the minimal possible friction at the border with the European Union. We do not believe it is necessary to be in a customs union to achieve that.

[Peter Dowd]

For the Chancellor’s information, he can easily find our policies on www.labour.org.

When the Chancellor met David Cameron last October to give a thumbs-up emoji to Mr Cameron’s UK-China investment fund, presumably to help businesses and entrepreneurs, was he aware that the fund is to be domiciled in the Republic of Ireland? If so, did he think to ask the former Prime Minister whether that was for the purposes of tax avoidance?

[Mr Hammond]

I have already answered the hon. Gentleman’s questions about my meeting with Mr Cameron last October. In a meeting that ranged across a number of issues, Mr Cameron was good enough to inform me of his intention to take up this role with a fund promoting investment both in China and the UK. The Government support all initiatives that improve trade and investment between the UK and China.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 17th April 2018 Commons Chamber

[Mr Hammond]

I am happy to tell my right hon. Friend that we have had a very productive first meeting with the CBI and the Trades Union Congress to flesh out the shape of the national retraining partnership, which is clearly going to be a crucial part of our investment in skills in future. I do take her point on childcare. We have of course seen the Select Committee’s report and will respond to it in due course.

[Peter Dowd (Bootle) (Lab)]

On 6 April, the Treasury bizarrely used a “thumbs up” emoji in a tweet celebrating the worst decade of productivity figures since 1817. I will help the Chancellor with the arithmetic—that is 201 years ago. I know that he has a new-found Tiggerish optimism, but is not his Department’s tweet, even with his misplaced exuberance, more like self-delusion for which local government, the police, the NHS, the fire service and public services more generally are paying the price?

[Mr Hammond]

We have a challenge in this country around productivity, and it is not a new challenge, as the hon. Gentleman well knows. For eight years, the OBR has estimated UK productivity growth, and on eight occasions it has had to revise down the estimates that it had made. This is a long-term challenge facing this country. Rather than trading insults about what has happened in the past, I suggest that the most constructive approach would be for us to work on improving the UK’s productivity performance. That means investing in infrastructure—this Government have committed half a trillion pounds of capital investment since 2010—addressing the skills gap, ensuring that capital is available to businesses, and addressing management challenges at the level of the firm. All those strands need to be taken forward together if we are going to create the high-tech, high-wage economy that we all want to see in this country.

--- Later in debate ---

[Mr Hammond]

The Government are highly committed to the apprenticeship programme. I recognise that starts are down—we always expected that—but something else is happening, because analysis shows that now that employers are contributing with their own levy to apprenticeship programmes, they are opting for higher-level apprenticeships. There are fewer starts than we expected, but we are seeing a much higher level of apprenticeship. There are more degree-level apprenticeships and more apprenticeships at the higher levels. The Department for Education and the Treasury are looking carefully at how this is working—[Interruption.] This is a serious issue, but the important question is about making sure that the skills that the economy needs are generated.

[Peter Dowd (Bootle) (Lab)]

The only productivity figures worse than the UK’s are the Chancellor’s—that is not an insult, but a statement of the blindingly obvious. Is he aware that a recent TUC assessment indicated that, in effect, the UK economy is on a negative trajectory? GDP growth is weak—on an annual basis, it is the weakest it has been for five years—and hours worked have declined. Public investment lags significantly behind that of our comparators. Wages remain stagnant and inflation is stubbornly high. What is his answer to this—perhaps a tweet, and maybe with a smiley emoji this time?

[Mr Hammond]

Not for the first time, I do not recognise the picture of our economy that is painted by Opposition Front Benchers. Figures today tell us that we have new record high numbers of people in employment, and new record low unemployment figures. That should be something that we are celebrating. Real wages are forecast to turn positive from this quarter and to go on growing thereafter. Employment is expected to grow by another 500,000 by 2022. We are working hard to ensure that productivity performance increases across the economy because that is the only sustainable way to achieve higher wages and higher living standards.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 27th February 2018 Commons Chamber

[Mr Hammond]

My right hon. Friend is nothing if not persistent and consistent. I cannot remember how many times he has raised this issue. There have been numerous requests for new VAT reliefs since the referendum, some of which are currently not permitted under EU law. We have calculated that if we were to grant all the VAT relief requests that we have received, that would come to more than £38 billion a year. The Government have received representations on VAT and tourism, and we are looking again at the case for change.[Official Report, 1 March 2018, Vol. 636, c. 6MC.] We have issued a call for evidence on the impact of VAT and air passenger duty on tourism in Northern Ireland, and we will certainly keep this issue under careful review.

[Peter Dowd (Bootle) (Lab)]

The Chief Secretary gave a speech last year calling for better value for money from the public finances and not spending money we do not have, and she has talked about not wasting money today, so how can she justify spending hundreds of millions of pounds on further tax giveaways worth £2,000 per child to the wealthiest families—those, for example, using private schools—via the tax-free childcare scheme? Is that not a waste of money and spending money we do not have?

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 16th January 2018 Commons Chamber

[Mr Hammond]

Yes, I agree with my hon. Friend. Keeping business taxes competitive so that we can attract international investment to this country is essential, but there is a quid pro quo: if taxes are low, they must be paid. We are determined to ensure full compliance and to lead in international forums in looking at ways of improving corporate tax compliance.

[Peter Dowd (Bootle) (Lab)]

The NHS is in crisis due to the tight-fisted approach the Chancellor takes to the public finances—unless a big corporation, a railway company or a failing construction firm needs a handout or a bail-out. During any discussions he has had with the Health Secretary, has he raised the issue of the funding crisis? If so, what solution has he arrived at to fund it properly, or will he be sending in the receiver?

[Mr Hammond]

The hon. Gentleman may not have noticed but we have put an extra £6 billion into the NHS. The first two weeks of the year are traditionally the highest pressure weeks in the NHS, and we have seen extreme pressure over the past two weeks. He may also not have noticed that we have a flu crisis going on, which inevitably takes its toll. In an ethically based health service, we treat the sickest patients first, and it is right that we prioritise those with urgent needs over those with routine needs in our hospitals.

[Peter Dowd]

That was an insouciant attitude, if ever there was one. The Chancellor’s local media report that the A&E department in St Peter’s Hospital in Chertsey in his constituency had the highest number of 12-hour waits for patients in Surrey at the start of last year. What imaginative explanation does he have for his constituents, if not the whole House, as to why they, like many others, have to wait for so long to get emergency treatment? I ask again: what substantive funding will he provide to the NHS?

[Mr Hammond]

The answer to that is the £6 billion of additional money that we put in at the Budget. I am glad that the hon. Gentleman raised St Peter’s Hospital in my constituency, because that gives me the opportunity to make an important point. As other Members will know, whatever the media say about the NHS in general, when one speaks to one’s own constituents about their experience in their local hospital, it is invariably good and they invariably have nothing but praise for the service that they receive from our excellent national health service.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Peter Dowd

Tuesday 18th July 2017 Commons Chamber

[Mr Hammond]

My hon. Friend is right to warn of the danger of a loss of market confidence in UK fiscal policy—I am looking very hard at the right hon. Member for Hayes and Harlington (John McDonnell). If markets lose confidence in UK fiscal policy, they will re-price lending to the United Kingdom. We already spend more every year on servicing our debt than on our armed forces and police services together. It would do a huge disservice to taxpayers in this country if we created conditions that would cause the cost of that debt to rise.

[Peter Dowd (Bootle) (Lab)]

An enfeebled Chancellor has been forced to give a £1 billion bung to the Democratic Unionist party, to cough up £1.3 billion for a schools funding U-turn, to scurry around to find £2 billion to pay for his humiliating national insurance contributions debacle and to bail out his nightmare neighbour’s social care retreat with £2 billion. Why should this House believe a word, a promise, a claim or a target on reducing the debt?

[Mr Hammond]

I was glad to see the hon. Gentleman smiling by the end of that little rant. I do not know which planet he lives on, but I do not feel particularly enfeebled. I do not know what the Labour Treasury team does all day, but my right hon. Friend the Secretary of State for Education made it clear in her statement yesterday that she has put extra money into the frontline schools budget by reprioritising the wider education budget and finding efficiencies across her Department. That is the way to do a fiscally prudent protection of our public services.

[Peter Dowd]

Yes, the Government have taken it off some children and given it to others.

The national debt has risen by £707 billion since 2010 and is rising. It is barely a year since the Chancellor was given the keys to No. 11, and in that time public sector net debt has not been reduced. According to the Office for National Statistics and the OBR, it has increased by £122 billion. Given that lamentable record, has he been given notice of eviction by the woman in the bunker next door? Perhaps they may leave Downing Street in the same removal van.

[Mr Hammond]

The hon. Gentleman will know—I say that, but perhaps he will not—that public sector net debt will continue to grow until the deficit is eliminated. That is a simple arithmetic fact. His Government pushed our deficit up to almost 10% of GDP, and we have spent the past seven years getting it down to 2.4% of GDP. We will carry on getting the deficit down so that this country’s public finances get back into balance. We are a responsible Government, planning for Britain’s future.