Oral Answers to Questions

David Gauke Excerpts

Tuesday 25th October 2016 Commons Chamber

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

3. What fiscal steps he is taking to support the manufacturing industry.

[The Chief Secretary to the Treasury (Mr David Gauke)]

The Government have taken steps to maintain a world-class business environment that helps UK manufacturers to thrive. That is why we have cut corporation tax from 28% to 20%— it will fall further, to 17%—and why we have supported £22 billion of research and development through tax credits for UK companies. This environment helps our manufacturers to grow as innovative, competitive companies.

[Gordon Henderson]

I welcome the Minister’s response, but what message is he sending to international manufacturing companies with operations in Britain about this country’s future international competitiveness as we leave the European Union?

[Mr Gauke]

Our message is straightforward: Britain is open for business. As the Prime Minister has said, we are and will continue to be a confident, outward-looking country.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Manufacturing depends on long-term investment. What assessment has the Minister made of the impact of our potentially leaving the European Investment Bank, and what progress has there been in any discussions about us maintaining our stake?

[Mr Gauke]

The UK is in discussions with the EIB.

[Mr Steve Baker (Wycombe) (Con)]

Does my right hon. Friend agree that reducing anti-competitive market distortions is both a great fiscal way to promote manufacturing and a way of ensuring our country is best placed for new trade deals?

[Mr Gauke]

I agree that removing distortions in the economy results in a more efficient economy. The UK Government have a record of doing that, by, for example, reducing corporation tax.

[Ms Margaret Ritchie (South Down) (SDLP)]

Apart from lowering corporation tax what other steps will the Chancellor and his ministerial team take to incentivise manufacturing industry in Northern Ireland?

[Mr Gauke]

The freedom for Northern Ireland to set its corporation tax rate is an important measure in itself. We look forward to further progress on that. Of course, there will be an autumn statement next month in which the Government will set out their economic policy. I have mentioned corporation tax and R and D tax credits, which we have made more generous. Those measures will have helped manufacturing businesses in Northern Ireland and elsewhere.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome the Government’s ongoing commitment to the northern powerhouse given the impact that that can have on manufacturing, in particular in my constituency, and the allocated funds for the A64 at Hopgrove. Does the Minister agree that such investments must seek maximum economic benefit? The current proposal from Highways England will simply kick an existing pinch point down the road if we do not see the dualling of that carriageway on the A64.

[Mr Gauke]

I look forward to examining the case for dualling the A64 and the benefit that would provide to manufacturing industry.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Last month, the Chancellor proudly dismissed his predecessor’s plans to cut corporation tax to 15%. This week, however, we hear of plans hatched by senior Government figures to cut corporation tax as low as 10% as part of a so-called Brexit nuclear option, despite the fact that both the British Chambers of Commerce and the Institute of Directors have stated that cutting corporation tax would not be at the top of their wishlist. Will the Minister put an end to his Government’s reign of chaos and confirm his long-term position on corporation tax, so that businesses have the stability they deserve?

[Mr Gauke]

I am not sure whether I would use the phrase “reign of chaos” if I was a Labour Front Bencher. Let me be very clear. The UK Government have rightly reduced corporation tax from 28% to 20%. We have legislated for it to go down to 17%. If there are any further announcements they will be at a fiscal event, whether an autumn statement or a Budget.

[Rebecca Long Bailey]

I am afraid that the Government chaos we have seen on corporation tax is sadly replicated on investment. The Chancellor promised to tear up his predecessor’s Budget and develop an industrial strategy, before denying he was planning a spending splurge. A recent Ipsos MORI poll showed that almost two thirds of Britons agree that the country is not doing enough to meet its infrastructure needs, and the Opposition agree. Will the Minister end his Government’s chaotic record on investment and confirm how much he plans to invest in infrastructure, on what, and where he will get the money from?

[Mr Gauke]

On the subject of corporation tax, I point out that it was not that many months ago that on one day the shadow Chancellor condemned the reduction to 17% while in Committee the Labour party voted for it. I will be clear that it is no good coming forward with incredible plans to spend £500 billion on infrastructure without any idea of how those plans will be paid for. The Chancellor will make a statement on 23 November on our policy on this issue. The Labour party really needs to change track if it is to have some credibility.

[Craig Whittaker (Calder Valley) (Con)]

5. What recent discussions he has had with the Secretary of State for Education on when the next phase of funding will be available for the priority school building programme.

[The Chief Secretary to the Treasury (Mr David Gauke)]

The £4.4 billion priority school building programme was established to rebuild or refurbish those school buildings in the very worst condition across the country. The programme’s second phase was announced in May 2014 and feasibility studies are now being carried out. In addition, we are allocating £4.2 billion across 2015 to 2018 to schools, local authorities, academy trusts and voluntary aided partnerships to maintain and improve their schools.

[Craig Whittaker]

I thank my right hon. Friend for his reply. For many years now, Todmorden High School in Calder Valley has been the top priority for a rebuild. It is currently taking a good chunk of maintenance money from other schools just to stay open. Will my right hon. Friend look at this carefully, so that we can finally give the pupils of Todmorden high school the school they deserve?

[Mr Gauke]

I understand my hon. Friend’s disappointment, and that of his constituents, that Todmorden was not successful in its application to the priority school building programme. We need to prioritise schools with blocks in the very worst condition. I understand that Todmorden’s buildings are now receiving some investment through the local authority, which will have competing priorities for capital resources, but I am sure my hon. Friend will continue to make the case for the school.

[John Pugh (Southport) (LD)]

Given the £180 million overrun on phase one, will the Government be tempted to backfill with second-rate private finance initiative buildings? What role will PFI have in the programme?

[Mr Gauke]

Let me address our record. We have spent £18 billion since 2010 on the school estate and we are committed to a further £23 billion so that pupils can be taught in facilities that are fit for the 21st century. We of course want to ensure that that is funded in the most appropriate, value for money and sustainable way.

[Rehman Chishti (Gillingham and Rainham) (Con)]

6. What steps he is taking to support regional infrastructure development.

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[Mr Laurence Robertson (Tewkesbury) (Con)]

8. What the UK contribution to the EU budget is expected to be in 2017-18.

[The Chief Secretary to the Treasury (Mr David Gauke)]

The Office for Budget Responsibility is responsible for forecasting contributions to the European Union. It will update its forecast in this year’s autumn statement, but the forecast for the UK’s gross contribution in 2017-18 was £12.6 billion at the time of the Budget.

[Mr Robertson]

Notwithstanding all the spending pledges that have been made today and recently, hospitals, schools, police and roads in my constituency certainly need a spending boost. Does the Minister agree that the sooner we leave the European Union, the sooner that money will be available to them?

[Mr Gauke]

The amount of any money saved will depend on the overall fiscal situation and the broader economic environment. Decisions on spending will be made in the round in autumn statements and Budgets, but while we remain members of the European Union, we must of course comply with the requirements to pay into it.

[Emma Reynolds (Wolverhampton North East) (Lab)]

May I press the Chief Secretary on this point? On the day of the referendum, I met an NHS worker who had voted to leave the European Union precisely because she thought that more money would be available for the NHS, thanks to the “£350 million a week” that was emblazoned on the Vote Leave bus. When we leave the European Union, will we get that money?

[Mr Gauke]

It is certainly not for me to justify or explain the pledges that were made by the leave campaign, but I will say that public spending decisions must be made in the context of the economic and fiscal situation.

[Mark Field (Cities of London and Westminster) (Con)]

I appreciate that getting back some of our EU contribution was a factor in the decision to leave the European Union, but will my right hon. Friend confirm that the Government are, at least at this stage, open to the idea of making some contribution in the future if we are to secure some sort of access to the single market for financial services, or, indeed, making some contribution in relation to passporting and equivalence?

[Mr Gauke]

What is important is for the United Kingdom to secure the best possible deal in our negotiations with the European Union. I do not think that it makes sense to bind our hands and close down options at this point; nor do I think it right for us to provide a running commentary on the matter.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Wales will continue to receive convergence funding while we are in the EU, but will the Treasury nevertheless honour the Prime Minister’s pledge to electrify the Great Western Railway line all the way to Swansea in order to make it part of the pan-European network and stimulate manufacturing and exports?

[Mr Gauke]

That is a matter for my right hon. Friend the Secretary of State for Transport, but, as my right hon. Friend the Chancellor of the Exchequer has made clear, the Government are committed to improving our infrastructure.

[Edward Argar (Charnwood) (Con)]

9. What steps he is taking to support economic growth in the midlands.

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[Philip Davies (Shipley) (Con)]

T9. How much UK taxpayers’ money used to bail out and to loan to other EU countries by the EU has been repaid to the UK, and how much is still outstanding? What is the Chancellor doing to ensure that we get all that money back when we leave the European Union?

[The Chief Secretary to the Treasury (Mr David Gauke)]

No UK taxpayers’ money has been used in the EU’s lending to other member states. Only in the event of default would the UK be asked to pay its share.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

What impact has the Secretary of State made of his predecessor’s austerity economics on the nation’s prosperity and would he like to apologise for that divisive and discredited ideology?

--- Later in debate ---

[Mr Gauke]

We believe that HS2 is part of modernising our transport system and ensuring that we have infrastructure fit for the 21st century.

[George Kerevan (East Lothian) (SNP)]

In light of the upcoming report of the RBS’s Global Restructuring Group and given that past systems of redress for small businesses have been ad hoc and have failed, will the Chancellor meet the all-party group for fair business banking to see whether we can involve a permanent and effective system of redress?