Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stephen Hammond

Tuesday 17th April 2018 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

15. What plans he has to increase productivity.

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

Productivity, as I have already said, is at the very forefront of the Government’s agenda. That is why we established the national productivity investment fund, a £31 billion package of investment in infrastructure and research and development, and committed to introducing a national retraining scheme, which we are developing in partnership with the CBI and the TUC to ensure that British workers have the skills they need to benefit from technology change. The focus now has to be on moving forward with firm-level initiatives, such as Be the Business led by Charlie Mayfield and Made Smarter led by Juergen Maier, that start to look at the challenges we face at the level of the firm in this country to make sure that we are doing what we need to do not only in infrastructure and skills but in investment in management at the level of the firm.

[Mr Hammond]

My right hon. Friend is right that there is some evidence of a measurement challenge around the productivity figures. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) asked a few moments ago about the relationship between rising wage costs and continued economic and employment growth. The question is why the tightening labour market is not driving a higher productivity performance and whether an element of that is in fact a management challenge. A great deal of time and energy is being spent on this issue. Indeed, the figures on productivity for the last two quarters do, on the face of it, show some improvement. Now, one swallow does not make a spring and we should be very cautious about interpreting—even a summer, Mr Speaker. I am even less ambitious! We should be very cautious about interpreting those figures, but, as we see record high levels of employment in the economy, we should expect them to help to drive the UK economy’s productivity performance.

[Stephen Hammond]

I listened to my right hon. Friend set out the Government’s plans for investment in transport and infrastructure a few moments ago. What direct impact on productivity does he expect those investments to have in the regions where they occur?

[Mr Hammond]

We are undertaking the largest rail investment programme since Victorian times and the largest road investment programme since the 1970s. Overall, the Government are now investing public capital at the highest rate for 40 years. This is one of the components that drives productivity in one of the areas where we have a long-standing gap with our principal competitors: too little public infrastructure. We are closing that gap and that will have a positive impact on productivity growth, but we still have to tackle skills, capability at the level of the firm, and access to capital. It is an important strand, but it is only one strand of the productivity conundrum.

Spring Statement

Debate between Lord Hammond of Runnymede and Stephen Hammond

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

I will perhaps remind the hon. Lady that the OBR’s autumn report in November was only four months ago and that in the normal course of events one would not expect, in the absence of some shock to the economy, economic forecasts to change very significantly. The front-end forecast has changed, because the outturn for 2017-18 has changed. The OBR forecast growth 0.2% lower than it turned out to be in 2017-18 and that has a knock-through effect, which has increased its growth projection for this year.

[Stephen Hammond (Wimbledon) (Con)]

Investing in our economy creates jobs and growth, and successful businesses drive that. Will my right hon. Friend tell the House how much the corporate tax take has gone up since the cut in corporation tax? Will he confirm that he will do nothing to hinder our internationally competitive corporate tax rates?

[Mr Hammond]

Yes, I can. I am happy to tell my hon. Friend that since we reduced the rate of corporate tax to 19%, the yield—the amount of tax we raise for our public services, our hospitals and schools—has gone up 54%. It is clear that being one of the most competitive tax jurisdictions in the G20 is one of the determining factors in many investment decisions coming to the UK, creating the jobs and prosperity we need for the future.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stephen Hammond

Tuesday 27th February 2018 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

Will my right hon. Friend tell the House what assessment the Treasury has made either separately or jointly with the Department for Transport of how external initiatives on competitiveness and investment might help the rail sector and Network Rail in particular?

[Mr Philip Hammond]

Strictly, this is an issue for my right hon. Friend the Transport Secretary, and he is looking at how to improve productivity in the railway and how to ensure that every pound we invest in the railway delivers the maximum possible benefit to railway users. He will make further announcements in due course.

Economy and Jobs

Debate between Lord Hammond of Runnymede and Stephen Hammond

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

I will make a little progress and then I will give way to some more colleagues on both sides of the House.

On this side of the House at least, we continue to believe that the most effective way to protect and support ordinary families is to ensure that they have jobs, and that is what we have done, in spades. The flaw in Labour’s tax plan is not just that it will hit those whom Labour claims to support; it is that it will not raise anything like the revenue that it is claiming. Labour says it will raise taxes by £48.6 billion without anyone earning under £80,000 paying a penny more. The Institute for Fiscal Studies—which the right hon. Member for Hayes and Harlington quoted rather selectively—has examined the credibility of that plan. It found that Labour

“certainly shouldn’t plan on their stated tax increases raising more than £40 billion in the short run, and more likely than not they would raise less than that. They would certainly raise considerably less in the longer term.”

So before we even turn to Labour’s spending plans, there is already a black hole of £8.6 billion a year and rising on the taxation side alone.

[Stephen Hammond (Wimbledon) (Con)]

Is it not even worse than that, in that the IFS said that there were £58 billion of uncosted promises in Labour’s supposedly costed manifesto?

[Mr Hammond]

My hon. Friend is exactly right, and if he bears with me, I shall continue.

That black hole of £8.6 billion a year and rising in taxation will have to be filled by raising tax on ordinary people, and that was just the manifesto. Since the Leader of the Opposition got his new suit, he has been out and about, flinging spending commitments with gusto at anyone he comes into contact with—another £9.5 billion of unfunded commitments for each year of this Parliament. Added to the hole in Labour’s tax plans, that is an additional £90 billion over the course of the Parliament that has to be raised in taxation on ordinary working families.

Let me say that again for the right hon. Member for Hayes and Harlington: £8.6 billion a year of under-recovered tax, according to the IFS, and another £9 billion-plus a year that his right hon. Friend the Leader of the Opposition added in additional unfunded commitments after the manifesto was published. In short, that is the Opposition’s approach to the type of tough decisions that have to be made every day in government about prioritising limited resources—“Should we do x or should we do y?” His answer is just yes: more everything for everyone, and all of it for free—a catastrophic recipe for economic and fiscal disaster.