Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 2nd July 2019 Commons Chamber

[Mr Hammond]

I have consistently made the case and explained to this House that there is fiscal headroom within the current fiscal rules. If we have a smooth exit from the European Union through a transition that will remove the economic uncertainty that is hanging over our economy, it will then be safe to release that headroom and make it available for additional public spending or, at the choice of the next Government, to reduce taxation. Either way, we have the headroom available once we have removed the Brexit uncertainty.

[Nicky Morgan (Loughborough) (Con)]

Is it not the case that Scotland, like everybody else, will know the plans for future public spending, for fiscal headroom and for the economic effects overall if the comprehensive spending review were to be started sooner rather than later? Is the Chancellor able to tell the people of Scotland, the people in this House and the people beyond when the comprehensive spending review will be starting?

[Mr Hammond]

I announced at the spring statement that it is the Government’s intention to conduct a three-year spending review concluding this autumn, subject to a deal with the EU being completed. Departments are already commissioned to carry out the work necessary for such a spending review, but it will be for the new Government to decide whether the circumstances make it appropriate to conduct a full three-year spending review or a single-year exercise.

Spring Statement

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

I am sure it was a momentary oversight by the hon. Lady that she did not say anything about the decommissioning measures that will be so important to her local industry in Aberdeen and that are listed in the written ministerial statement. She says that no deal will be bad for the economy, and I absolutely agree, but if she understands that, why did she not vote for the deal? I have a great deal of respect for her, but I am afraid she is creeping towards the practices of those on the Labour Front Bench when she quotes the fourth quarter growth figure of 0.2% without mentioning the more recently published growth figure of 0.5% for the first quarter of this year. [Interruption.] If she does the maths, she will find that is okay.

The hon. Lady talked about the downgrade that the OBR has applied to the 2019 growth figure. We would of course like it to be higher, but she has to see the figure in the global context. I know she understands this. Germany’s economy has slowed down and France’s economy has slowed down. Across the G7, we are exactly in the middle of the pack. We will grow faster than Germany, Japan and Italy this year. We will grow exactly the same as France and slower than Canada and the US. That is a perfectly creditable performance. Would I like to do better? Of course I would. If she is going to be honest with the House, she needs to put what she says in the context of what is happening across the global economy.

The hon. Lady asked about PhD-level roles. They will be completely exempt from the visa cap. She asked about assets being moved abroad. Of course I am concerned about that, and £35 billion of insurance company assets moved abroad is £35 billion more than I would like, but she needs to understand that that is in the context of the many trillions of pounds of assets that the companies are managing in London and, increasingly, in Edinburgh. Edinburgh’s ranking in the global asset management league table has once again risen, which we are extremely pleased about.

The hon. Lady talked about pay for the lowest paid. Those on the national minimum wage and the national living wage have seen their incomes increase by an average of £2,750 a year since 2016. She asked about universal credit. Universal credit delivers. People on universal credit are more likely to be in work than those trapped on legacy benefits. I have put billions of pounds into the system over successive fiscal events to smooth the transition to ensure that the movement of people from legacy benefits on to universal credit operates smoothly.

Finally, Scotland gets its share of the increased spending on capital and resource, but precious little thanks do we ever hear from those on the SNP Benches in exchange for it.

[Nicky Morgan (Loughborough) (Con)]

Building on the question asked by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), the OBR has made it clear today that it has not been able to update its forecast to reflect the current Brexit situation, saying that

“we still have no meaningful basis for predicting the post-Brexit trading relationship beyond the near term.”

I sense the Chancellor’s frustration with the House’s inability to approve the withdrawal agreement, but does he agree that this means that many of the forecasts are obviously going to have to be revisited as the Brexit scenario plays itself out over the next few months?

The Chancellor mentioned the forthcoming CSR and education spending. May I urge him also to think very clearly and closely about spending on further education colleges, which is another critical part of improving productivity in our country?

The Budget report recently produced by the Treasury Committee said that the Chancellor was effectively disregarding the fiscal objective to run a balanced budget in the mid-2020s, and the OBR has said today that the target will not be met again. So does he intend, by the next Budget, to ensure that the existing fiscal charter will be updated for this Parliament?

[Mr Hammond]

My right hon. Friend is right, of course, about the OBR’s Brexit assumption—I said so earlier and the OBR has said so clearly. It has to make an assumption, and until there is a new policy, that is unfortunately the way it is mandated to work. On the forecast, I have addressed this in this House many times before. The forecast is based on those assumptions. We are either going to have a no-deal exit, in which case I would expect a significantly worse outturn, or we are going to lift this cloud from above our economy, in which case I would expect a significantly better outcome. A number of important commentators, including the Governor of the Bank of England, have suggested over the past couple of weeks that there is more juice in the economy if we can just lift this cloud.

I have noted my right hon. Friend’s early bid for further education in the spending review. There will be lots to discuss as we go into the spending review, and we will ensure that there are proper, structured arrangements for Members of this House to make their views known. My right hon. Friend the Chief Secretary will be happy to engage across the House.

My right hon. Friend asked about the target for the mid-2020s. I simply do not accept that the figures published today show that it is impossible to reach a balanced budget in the mid-2020s. In 2023-24, the deficit will be 0.5% of GDP, but whether we choose to get the deficit down to zero or choose to do other things is a choice, and we are lucky to have it.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 29th January 2019 Commons Chamber

[Nicky Morgan (Loughborough) (Con)]

The next most important update on the deficit will be the Office for Budget Responsibility’s statement around the time of the spring statement, but the OBR has been clear that it can only make a forecast once it knows the Government’s plans for Brexit, so could the Chancellor give the House an update on when he thinks the OBR will be able to produce that work for the spring statement in relation to the Brexit timetable?

[Mr Hammond]

Yes I can. My understanding is that the OBR is basing its forecasting work on the same assumptions it used at Budget 2018, but, as my right hon. Friend has asked me, I can inform the House that the spring statement will be made on Wednesday 13 March. I remind the House that it is not a fiscal event but that, as I have said before, if the economic or fiscal outlook changes materially, it is always open to us to turn it into one.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 11th December 2018 Commons Chamber

[Mr Hammond]

I am not sure whether the hon. Gentleman was in his place for the Budget, but I did in fact announce a digital services tax based on turnover. I also announced a reduction of one third in the business rates for independent retailers. I am very happy to have a meeting with him and explain the changes in detail.

[Nicky Morgan (Loughborough) (Con)]

I thank the hon. Member for Batley and Spen (Tracy Brabin) for mentioning the Treasury Committee report published this morning. The Treasury Committee is about more than Brexit, as I hope this House is too, and next week we will be holding a joint Committee session with the Housing, Communities and Local Government Committee on business rates. I am sure that the Financial Secretary is looking forward to his evidence session greatly.

[Nicky Morgan]

I see the right hon. Gentleman nodding.

Business rates are an issue for retailers, and there are some simple things that could be changed now. Does the Chancellor agree, for example, that, for many retailers, their busiest period is Christmas when they could perhaps agree to pay more in business rates and then pay less in periods when they are less busy, so, overall, the same amount is paid, but there is flexibility in payment?

[Mr Hammond]

If my right hon. Friend is asking whether there is anything that local authorities can do to help with the cash-flow challenges of seasonally based businesses, I am very happy to take that away and look at it and see whether there is anything that we can do to help in that way. The challenge, of course, is that business rates raise £25 billion a year and are a vital part of our overall tax system. If we are to change them, we must find a sustainable way of replacing them.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 11th September 2018 Commons Chamber

[Mr Hammond]

The hon. Gentleman needs to look a little deeper. The real answer to low wages is improving productivity. The challenge for this Government—for any Government in this country—is to work with industry, trade unions and training institutions to ensure that we address our productivity challenge. That means investment in infrastructure and skills, support for businesses to improve management and access to capital for growing businesses. Only when business is growing, successful and productive can it pay the higher wages that we all want to see.

[Nicky Morgan (Loughborough) (Con)]

One of the people most interested in the trends in wage growth and inflation—and who gives the Treasury Committee evidence about that—is the Governor of the Bank of England. Will my right hon. Friend indicate to the House when he expects to be able to let us know about the discussions that he has been having with the current holder of that post about extending his position?

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 3rd July 2018 Commons Chamber

[Nicky Morgan (Loughborough) (Con)]

I warmly welcome what the Chancellor says about putting all information before Parliament before we vote on the final withdrawal agreement later this year, but of course that will not be the end of parliamentary involvement, because we will have to onshore all the current EU financial services legislation, including the binding technical standards. Will the Chancellor set out the Treasury’s thinking so far about how that process will be democratically accountable to Parliament or perhaps the Select Committees?

[Mr Philip Hammond]

My right hon. Friend asks about Parliament’s role in dealing with the onshoring of a very large number of financial services regulations. Some of them will be dealt with through a parliamentary process, but other areas of financial services regulation are dealt with by the independent regulators—the Financial Conduct Authority and the Bank of England. I will write to her and give her as much detail as I can about how that will break down between the different categories.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 17th April 2018 Commons Chamber

[Mr Hammond]

As the hon. Gentleman knows, the tidal lagoon project is under careful consideration by the Government, and a decision will be made and announced in due course.

[Nicky Morgan (Loughborough) (Con)]

One of the consequences of increasing productivity is of course higher wage growth, which I think would make everyone feel much better. The Chancellor may be aware of the Treasury Committee’s recent report on childcare, which called for more childcare support for those undergoing retraining—another way of increasing productivity. What were his thoughts on that, and what is his progress on talks with the national retraining scheme?

[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.

Spring Statement

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 13th March 2018 Commons Chamber

[Nicky Morgan (Loughborough) (Con)]

I congratulate the Chancellor on his balanced approach. He and the Prime Minister have rightly identified housing as an economic and social priority. He will be aware that the Treasury Committee’s report on his autumn 2017 Budget recommended that the housing revenue account borrowing cap could be lifted to allow local authorities to play their part in building the right homes in the right places. Is that something he will consider?

[Mr Hammond]

I am grateful to my right hon. Friend. We have already relaxed the borrowing cap for local authorities in areas with high demand and low affordability. We will monitor the consequences carefully and keep how it delivers under continuous review.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 16th January 2018 Commons Chamber

[Nicky Morgan (Loughborough) (Con)]

There are many small and medium-sized enterprises in the Carillion supply chain, as both contractors and direct suppliers. What discussions will the Government have with Her Majesty’s Revenue and Customs and other businesses to make sure that these companies are able to continue to pay the tax liabilities and their employees?

[Mr Hammond]

HMRC already has a scheme that can assist companies that are having cash-flow difficulties in meeting tax liabilities. We agreed last night that HMRC will specifically signpost, via the Carillion-specific websites that are operating, that that facility exists.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Lord Hammond of Runnymede

Tuesday 18th July 2017 Commons Chamber

[Nicky Morgan]

Thank you, Mr Speaker. Would the Chancellor not agree that a growing economy is necessary to pay for our essential public services? The Office for Budget Responsibility’s “Fiscal risks report”, which has already been referred to, says that

“governments should expect nasty fiscal surprises from time to time”—

I am not referring to the shadow Chancellor there—and “plan accordingly”, but this Government also have to manage the uncertainties posed by Brexit. Should not a responsible Government not worsen uncertainties and risks by the decisions that they take?

[Mr Hammond]

Let me first congratulate my right hon. Friend; it was remiss of me not to do so in my first answer. I very much welcome her to her role on the Treasury Committee, and I look forward to being grilled or toasted by her, or whatever the correct expression is. She is of course exactly right: the only way to build resilience into the economy is to have strong public finances, and the only way to have a sustainably growing standard of living is to have rising productivity over the medium and long term, and that is what the Government’s policy is focused towards.