Jeremy Hunt
Main Page: Jeremy Hunt (Conservative - Godalming and Ash)Department Debates - View all Jeremy Hunt's debates with the HM Treasury
(6 months, 2 weeks ago)
Commons ChamberMr Speaker, may I add my comments to yours yesterday about His Majesty the King? I wish him and his family well, as well as saluting his courage in being so open about his condition.
At the autumn statement last year, I announced an ambitious growth package, which will boost business investment by about £20 billion a year. We are making full expensing permanent, which the CBI welcomed as a game changer that will fire up the British economy.
I also welcome those measures. Business rates are among the biggest issues for small businesses in Meon Valley, so I welcome the Chancellor’s £4.6 billion package of support in the autumn statement. However, following covid, there are a number of empty offices where landlords are still having to pay business rates. Does the Chancellor have any measures to support those who are struggling with a lack of income to pay business rates?
My hon. Friend is absolutely right to highlight the pressures caused by business rates. That was why in the autumn statement we introduced the 75% discount for retail, hospitality and leisure. All I would say is that the reason we were able to introduce those large cuts in business rates was that we did not embark on a spending spree of £28 billion a year, which is Labour’s policy on Mondays, Wednesdays and Fridays, but not apparently on Tuesdays, Thursdays and Saturdays.
I will try to be nice to the Chancellor, but he seems to be living in a parallel universe. If he came to Huddersfield and talked to my businesses and manufacturers, he would find them at the lowest ebb that I can ever remember. It is time that the stimulus was there to make people invest and create jobs. Get on with it, Chancellor!
If that was being nice, I am relieved that I have not seen the other type of questions that the hon. Member asks. I agree that manufacturing is central to our economic fortunes, which is why it was good news that last year we overtook France to become the eighth-largest manufacturer in the world. But we have gone even further: in the autumn statement, we announced a £4.5 billion manufacturing strategy to give further support to make our manufacturers the best in the world.
Yesterday, we had the pleasure of discussing the very many benefits from the autumn statement, including research and development grants and simplification of the tax code. However, I wonder whether the Chancellor might go a little further and see whether cutting VAT for the tourism and hospitality sector, perhaps by 10% over five years, would be advisable to help the economy across the United Kingdom.
My hon. Friend is an assiduous supporter of the many pubs, restaurants and shops in Devon, and I commend him for that support. We will, of course, keep all those measures under review ahead of the Budget.
Hair salons are a vital mainstay of our high streets, but many employers are worried about the sustainability of their businesses; a huge issue is their tax bills, with VAT a significant concern, making further business investment very difficult. Cutting VAT to 10% would make an important difference to local businesses, high streets and apprentice training. Will the Chancellor look at doing that to support all our local economies?
I will always look at anything that helps businesses to grow and expand. I set up and ran my own business for 14 years. Can I gently say to the hon. Lady that it is slightly incongruous to argue for lower taxes when the SNP has given Scotland the highest taxes in the United Kingdom?
We announced 110 growth measures in the autumn statement. Taken together with the measures in the spring Budget, the independent Office for Budget Responsibility says that they will have the biggest impact on output that it has ever measured in a fiscal event, increasing GDP by 0.5% by 2028-29.
The UK economy is set for slower growth than previously thought. The International Monetary Fund predicts that next year we will have the second worst growth in the G7. In Scotland, the SNP has increased taxes, which we have heard about already, and Scots now face six bands. Stagnation there is even worse, and businesses and households in my constituency need reassurance. Will the Chancellor tell us what he will do to give confidence to people up and down the country that we will soon see economic growth?
May I gently correct the hon. Lady on the IMF? It said that over the next four years, UK growth will be higher than in Germany, France, Italy and Japan. I agree about SNP tax rises, but I point out that the Liberal Democrats have some tax rises of their own. They want to increase capital gains tax, which would be incredibly damaging for Scotland’s financial services industry, which employs thousands of people.
Has the Chancellor had the opportunity to look at the New Conservatives’ budget proposal, a budget for families? It has a six-point plan, with two points to help unlock growth, particularly for the many small, family-run businesses in places such as Stoke-on-Trent North, Kidsgrove and Talke. Those plans to increase the VAT registration threshold to £250,000 and to abolish the IR35 reforms would surely help us unlock the growth of our great nation.
I have been talking with my hon. Friend about these issues recently. In fact, we were discussing increasing the VAT threshold only last night—such are the interesting evenings I have in this job! We will look seriously and carefully at any measures that help small businesses. They are the lifeblood of the country.
Removing the bankers’ bonus cap was a decision made by the independent Prudential Regulation Authority, which has long said that the cap was completely ineffective; it did not limit pay or make banks safer.
The cap on bankers’ bonuses might have been a great newspaper headline, but it did little to tackle the City’s excesses. Financial institutions quickly changed remuneration packages and structures so that risk takers still receive substantial pay-offs, sometimes even taking them through offshore mechanisms. Does the Chancellor agree that what we need is enhanced regulation to mitigate excessive risk taking in the square mile? That could require, beyond merely capping bonuses, a move toward an alignment of interests focused on the form of bonus payments, share allocations and deferred amounts, and robust clawback mechanisms for those who have behaved maliciously, in order to deter misconduct in the square mile more effectively?
I suspect that when the hon. Gentleman tabled his question, he was not expecting that the biggest supporter of abolishing the bankers’ bonus cap was not the Chancellor but the shadow Chancellor. I hear what he says, and indeed those are some of the reasons we abolished it, because it was not working. If Labour is going to change its mind on that policy, may I ask—just to take a totally random example—when will it change its mind about the planned £28 billion of additional borrowing?
I would like to update the House on a couple of data releases published since our last oral questions. Total greenfield foreign direct investment since 2010 has not just been higher than that of France, Germany and Italy, but in the past two years has overtaken that of China to be the second highest in the world. Yesterday’s labour force survey said that unemployment fell to a quarterly average of 3.9%, meaning that unemployment has halved and Conservative Governments have overseen the creation of more than 800 jobs every day since 2010.
Can the Treasury find funds for an increased pay offer for junior doctors? I completely agree that we must safeguard the public finances and have regard to affordability, but if ever a group deserved a pay rise, it is junior doctors, and we need to get the dispute settled.
As my right hon. Friend knows, as Health Secretary I campaigned for extra money for the NHS to make sure that we could pay NHS staff fairly, but I do believe that junior doctors have had a very fair offer—one that is higher than was recommended by the independent pay review body and is about double the rate of this year’s predicted inflation. I know that the Health Secretary is willing to talk about anything else that could help make their working conditions better.
Last week, at Prime Minister’s questions, when asked about the Tory mortgage penalty, the Prime Minister boasted that someone coming off a fixed-rate mortgage
“will be able to save hundreds of pounds.”—[Official Report, 31 January 2024; Vol. 744, c. 857.]
But the small print was that they had to add many years to their mortgage. Three million people have been coming off fixed-rate mortgage deals this year and last, so does the Chancellor agree with the Prime Minister that British homeowners have never had it so good?
The way we are helping families with mortgages is not just through the mortgage charter, which is a lifeline to many families, but by bringing down inflation. We have been having a few pops about Labour’s confusion about its £28 billion policy, but the real reason we are against it is that going on a borrowing splurge pushes up inflation, pushes up interest rates and makes mortgages more expensive.
It is under a Conservative Government that interest rates, inflation and mortgage costs have gone up. The Government need to take responsibility because, after 14 years, this out-of-touch Government are making it harder for ordinary people to get on. If the Chancellor decides to campaign in next week’s by-elections, what will he say to the 3,100 people in Wellingborough who are remortgaging and paying £210 more on their mortgages every month, and to the 2,800 people in Kingswood paying £270 more a month because of the Conservative mortgage penalty?
What I will say to them is that responsible, difficult decisions, the vast majority of which the shadow Chancellor opposed, have seen the inflation rate more than halve and interest rates likely to have peaked. Last year, we built more houses in one year than in any single year under the previous Labour Government. We are doing everything we can to help bring down mortgage rates, but a £28 billion borrowing spree will make them worse not better.
I am sure the hon. Lady understands that I cannot talk about what will be in the Budget ahead of the Budget because no decisions have been made. I celebrate with her that the UK recently became the first major economy in the world to decarbonise by more than 50%, ahead of France, Germany, Japan and the United States.
If the Chancellor had an ambition to spend an additional £28 billion a year on something, will he explain to the House what level of tax that would impose on ordinary households?
I thank my hon. Friend for asking that question. I am curious to know where that figure of £28 billion has come from, but as she has asked the question, I will tell her that, if we were to stick to the fiscal rules, as the Labour party claims it will do, to increase spending by £28 billion would mean increasing income tax by 4% or increasing corporation tax, which Labour says it will cap, by 8%.
The Chancellor will be aware of a proposal from the World War Muslim Memorial Trust to establish a memorial at the National Memorial Arboretum, honouring an estimated 750,000 Muslims who have fought for the British armed forces, with tens of thousands of them paying the ultimate sacrifice. Previous Budgets have supported memorials that honour those who have given us the freedoms that we enjoy. May I ask the Chancellor to personally consider this proposal and help make it a reality?
My right hon. Friend is absolutely right: we must remember and honour the sacrifices made by those of all nationalities and religions who fought for our freedom, including, I believe, nearly 150,000 Muslims who died in the second world war. My officials would be happy to engage with him to identify how best the Government can help make this vision a reality.
My right hon. Friend and his colleagues will be aware of the challenges that businesses and households face in coastal communities. As the Budget approaches, may I urge him to be ever mindful of how we maintain the vitality of the economies in our coastal areas?
I absolutely will; that is a core part of the levelling-up agenda, and my hon. Friend will be pleased to know that, since we started on that agenda, two thirds of all new jobs created have been outside London and the south-east. We will continue to look at any proposals he may have in that respect.
Regardless of what the Chancellor tells us, the reality remains that people in Bradford are worse off after 14 years of this Government. Healthcare, GPs and dentists are less accessible, homes are more expensive, colder and riddled with mould, jobs are less secure and badly paid, with stagnating wages, and household savings have been wiped out by rising food, water, energy and fuel bills. Ahead of the last Budget he will deliver before the general election, will the Chancellor apologise for 14 years of disaster that have devastated our communities?
Let me tell the hon. Gentleman some positive messages he can take home to his constituents in Bradford: violent crime and burglaries have been halved, school standards are up, the NHS has more doctors and nurses than ever in history and real after-tax income for people on the minimum wage or national living wage is up by 30% if they are working full time.
Can my hon. Friend tell me how many staff are now employed across the eight Departments based at the Darlington Economic Campus? What progress is being made on naming the new building “William McMullen House”?
The Chancellor knows jolly well that in April 2023 Sir Brian Langstaff made his final recommendations on compensation for those infected and affected by the contaminated blood scandal. The Chancellor also gave evidence in July to Sir Brian and said that work was under way. In December, this House voted for a compensation body to be set up. I would like the Chancellor to answer my question, please, not a junior Minister, and explain exactly what is going on in the Treasury, what work is being undertaken and whether there will be an announcement in the Budget.
With great respect to the right hon. Lady, who has campaigned formidably on this issue, I do not think she is giving a fair representation of what the Government have done. I stand by every word I said as a Back Bencher, and as Chancellor I have tried to do everything I can to speed the process up. She has not mentioned that the Government have already given £100,000 to the families affected. We have accepted the moral importance of the duty to give compensation, and we will now work with colleagues in the other place to make her amendment workable.