Beer Taxation and Pubs

Kevin Brennan Excerpts

Thursday 28th March 2019 Commons Chamber

[Mike Wood (Dudley South) (Con)]

I beg to move,

That this House has considered beer taxation and pubs.

I am delighted to have secured this important debate, alongside the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and my hon. Friend the Member for Ribble Valley (Mr Evans), and I am grateful to the Backbench Business Committee for allocating us this time.

In the short time that I have available, I hope to set out a compelling case as to why the Minister should recommend to the Chancellor that he cut beer duty in future Budgets, reform business rates and continue to look at new ways of reducing the disproportionate tax burden on pubs and breweries. Representing a Black Country constituency as I do, and as chair of the all-party parliamentary beer group—the largest Back-Bench all-party group in this House—I know what an important issue this is for many of our constituents. My own Dudley South constituency is home to three very distinct and individual brewers: Bathams, dating back to the 1860s; Black Country Ales, which is a much more recent and fast-growing brewery; and Ma Pardoes, one of the original Campaign for Real Ale breweries.

[Kevin Brennan (Cardiff West) (Lab)]

I congratulate the hon. Gentleman on his great work as chair of the all-party parliamentary beer group, of which—like many other hon. Members—I am a member. Does he agree that, although it is very welcome that the Government extended rates relief to pubs, it is disappointing that they did not also extend it to small music venues, where people often also drink the occasional beer?

[Mike Wood]

Of course, the business rates relief extension was part of the support for high streets and community pubs in particular. I think there is a particular value to that, but I certainly would not be opposed to the kind of measures to which the hon. Gentleman has referred.

When we last debated beer duty in this House—in Westminster Hall in October 2017—I said that there were 75 pubs in my constituency. I am afraid that there are now only 73, despite my very best efforts.

Oral Answers to Questions

Kevin Brennan Excerpts

Tuesday 5th March 2019 Commons Chamber

[Mr Hammond]

The points my hon. Friend makes are well made, and of course this is about getting the balance right. The Government recognise that plastic packaging can play an important role, but we want to reduce the environmental impact of single-use plastic waste and encourage more sustainable forms of plastic packaging that can be recycled. The packaging tax will encourage businesses to use more recycled plastic in the production of packaging and will therefore drive a more sustainable packaging industry.

[Kevin Brennan (Cardiff West) (Lab)]

My 10-year-old constituent Emily Haines wrote to me about this issue, and she assured me she had not just copied and pasted. Indeed, when I wrote back to her by hand, her father emailed me to say that he had no idea that his daughter had written to me on this subject. So may I ask the Chancellor not to listen to those who say that he should in any way dilute what he is doing on single-use plastics? Indeed, he should do more and do as Emily says: introduce “tough new taxes” to make sure that we deal with this environmental scourge.

[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.

Oral Answers to Questions

Kevin Brennan Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mr Philip Hammond]

I agree with my hon. Friend on this. Forecasting has had a bit of a bad rap in this House over the past couple of years, but this report was interesting, because it showed that economic forecasts in fact have a good track record of delivering, and we should pay attention to what the experts are telling us.

[Kevin Brennan (Cardiff West) (Lab)]

T6. It is Independent Venue Week. Such venues are the research and development to a £4.5 billion music industry, but a third of them have closed in the past decade. Why is the Chancellor, who has Runnymede Jazz Club in his constituency, giving a rates discount to pubs but not to music venues? Will he look at that again?

[Mr Speaker]

Let us hear about the jazz situation in Runnymede.

Finance (No. 3) Bill

Kevin Brennan Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

There has been some suggestion that the Government might accept amendment 7 at some point today in order to avoid defeat. Usually the Opposition would welcome that, but unfortunately, if that capitulation comes, it will show that the Government have absolutely no strategy for anything other than surviving until the end of each day. I have begun to think that they will accept almost any amendment to a Finance Bill to avoid defeat, regardless of what it proposes or of how incoherent it would make the legislation, because that is the only objective they seem able to pursue. That is no strategy for delivering the most important decision this country has taken for 70 years. That is why the Opposition have tabled new clauses 3 and 7 and amendment 1 to address some other serious issues in the Bill.

[Kevin Brennan (Cardiff West) (Lab)]

Given that the Business Secretary said in the House earlier that no deal should not be contemplated, and that my hon. Friend is outlining the possibility of the Government accepting amendment 7, would it not be right for the Government to say clearly at the end of business today that they are ruling out no deal because it would be so damaging to this country?

[Jonathan Reynolds]

I absolutely agree with my hon. Friend. We all know that several members of the Government take that view, even though they may not be able to say it on the record. They are quite clear as to what no deal would mean, and they would not contemplate going down that route. It would be far simpler and far better to get to a position where ruling out no deal was clearly the Government’s intent.

New clause 3 would oblige the Government to publish a review of the fiscal and economic effects of the exercise of the powers in clause 89, as well as the differences between exercising those powers in Great Britain and in Northern Ireland. As we edge closer to the reality of crashing out without a deal, clause 89 is not simply hypothetical. We are now just two and a half months away from the UK’s exit without an agreement. It is therefore of critical importance that we have a full and transparent view of the implications of a clause of this kind.

Business Banking Fraud

Kevin Brennan Excerpts

Tuesday 9th October 2018 Westminster Hall

[Mr Wragg]

My hon. Friend hits the nail on the head. I pay tribute to the police and crime commissioner, but I also wish to pay tribute to a couple of people who I believe are here in the Gallery today. Instead of the authorities investigating, it was left to a couple of music producers from Cambridge, Paul and Nikki Turner, to crack the case. I hope they are here in Parliament. They are still fighting for compensation for other victims of the crime.

[Kevin Brennan (Cardiff West) (Lab)]

I endorse what has been said about Anthony Stansfeld.

Does the hon. Gentleman agree that this is not just about RBS, as some people seem to think? My constituent, Mike McGrath, went out of business because of his treatment by Lloyds bank.

[Mr Wragg]

The hon. Gentleman is absolutely correct: it was systemic across the whole business lending sector. He is right to put that on the record.

The Turners’ reward for bringing the case to the bank’s attention back in 2007 was to be branded conspiracy theorists. The bank—first as HBOS, then as Lloyds—tried to evict them from their home 22 times, spending more on legal action than the value of the home itself. It sent a top partner from one of the country’s best regarded law firms to Cambridge county court to watch the hearings. The Turnbull report, which details a comprehensive cover-up of the fraud from within the bank, notes lawyers as saying that, once the Turners were out of their home, they would have to accept their fate. This was not the pursuit of justice but a witch hunt to silence whistleblowers.

The Turners approached the Financial Standards Authority, the Serious Fraud Office and the Treasury. Indeed, there was a debate in this very room in June 2009, during which Members urged the authorities to investigate. However, all they encountered was denials and deflection. As my hon. Friend the Member for Wycombe (Mr Baker) pointed out, the case was eventually taken seriously only after Thames Valley police recognised that a crime had been committed. The investigation took seven years to complete and the resource of 151 officers and staff, and it cost £7 million, with only £2 million eventually recovered from the Home Office. Thames Valley police stated that they could have done it in half the time and for half the money, if only the bank had co-operated fully. Unfortunately, the scale and difficulty of investigating the fraud only serves as a warning to other cash-strapped police forces: “Investigate at your peril”.

The reality is that white-collar crimes such as this are expensive and difficult to prosecute, and the agencies responsible for fighting economic crime simply do not have the necessary resources to tackle complex, mid-tier banking fraud. The SFO takes on only a small number of very large cases and has a budget of £53 million. The National Crime Agency’s economic crime command has a budget of £10 million, and the newly established National Economic Crime Centre has a budget of just £6 million. Compared with the sheer scale of fraud in the United Kingdom, which is estimated at more than £190 billion a year, and given the potential for consequential losses, these investigative budgets are, frankly, insignificant.

For those who may think that this is a one-off, it is important to note that the processes employed by HBOS in this case—turnaround units, business valuations and the use of insolvency—are exactly the same tactics seen in the case of other complaints that the all-party parliamentary group on fair business banking has investigated. Such complaints were found to be commonplace, as the hon. Member for Cardiff West (Kevin Brennan) alluded to, across most financial institutions. The system is ripe for abuse, and we have serious concerns about it.

At this point, I pay tribute to the incredible dedication of the co-chairs of the all-party group, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for North Norfolk (Norman Lamb). In addition, I thank the group’s officers and members for their significant work in running a thorough inquiry into how so many SMEs were abused by their banks, exposing the scale of the issue and the mechanisms by which the frauds were conducted. The APPG has produced an important report that identifies the shortcomings in the current investigative tools and bodies and makes vital recommendations as to how we might start to unpick this sorry mess.

I reiterate the APPG’s calls for a full public inquiry into the treatment of businesses by financial institutions. There are currently more than 10 different inquiries looking at different, isolated issues. It is time that we had a holistic approach and investigated the system as a whole.

Banking Misconduct and the FCA

Kevin Brennan Excerpts

Thursday 10th May 2018 Commons Chamber

[Kevin Brennan (Cardiff West) (Lab)]

This is an important debate and I congratulate all the hon. Members who have contributed to it so far. Banks occupy a very special and important position in our economy and society. Without them, the economy could not function efficiently. However, they also operate in such a way that they borrow short and lend long, and they always have done. As a result, banks hold a degree of responsibility and trust when they take people’s moneys into their care. I am afraid that over the past few decades, as other hon. Members have described, a culture has been allowed to develop under Governments of different colours to allow banks to basically follow the principle that “Greed is good,” as so well elucidated in 1980s film “Wall Street”. Ultimately, everything that has been described today—the disasters that have been brought upon our constituents—has been born out of the greed of bankers operating not in the interests of our constituents, but to line their own pockets.

[Dr David Drew (Stroud) (Lab/Co-op)]

Does my hon. Friend accept that the situation is 10 times worse when the bank no longer exists? I have constituents who are still trying to work through HBOS, which is now part of Lloyds, which has washed its hands of it.

[Kevin Brennan]

I absolutely accept that; it is completely the case. I want to mention briefly some of my constituents who have been affected by what has been described today and by other practices that should be incorporated in the public inquiry that other hon. Members have called for. By the way, RBS has today been fined $4.9 billion by the American authorities for its activities when it was expecting to pay something like $12 billion, so if there is concern in the Treasury about the cost of a public inquiry, we have $7.1 billion available, given the assumption that was made by RBS, that could be levied on just one of the banks that we are talking about today to cover the cost of any public inquiry. I hope that the Treasury boffins have taken notice of that statistic.

My constituent Mike McGrath was also a victim of the kind of asset stripping we have heard about today. He can show quite clearly that Lloyds bank lied to the Financial Ombudsman Service to obtain a favourable judgment for itself and so that my constituents’ complaint was not upheld. The decision arrived at by the Financial Ombudsman Service was based on the probability of the evidence, but that evidence was incomplete, inconclusive or contradictory because Lloyds bank did not provide all the evidence that it should have done to the Financial Ombudsman Service. There was detrimental evidence that would have allowed the adjudicator to find in favour of my constituent—as the law should require them to do. Customers should have the right to complain to the Financial Ombudsman Service and get it to adjudicate quickly, fairly and at little cost. That is why it exists, but Lloyds bank, and I believe others have done the same, has concealed detrimental evidence to prevent that from happening. This left my constituent with the only option of expensive court litigation, which he could little afford, having been ruined and bankrupted by his own bank.

This allowed Lloyds Wholesale Banking Recoveries in Bristol, with the aid of their appointed Law of Property Act receiver, Alder King, which we heard about earlier from my hon. Friend the Member for Cardiff Central (Jo Stevens), to strip the customer’s assets, knowing that the customer had in fact given the true account of the facts to the FOS and would have had their complaint upheld had Lloyds bank been truthful. My constituent can show that this has happened on more than one occasion. He believes not only that there should be a public inquiry, but that the Treasury Committee should look at the wider issues that have been raised in this debate and by this scandal for all the people who have been affected by different banks’ actions when the banks were bailed out by the Government.

Banks are still engaged in other practices that should be part of any inquiry. That includes what a constituent, Mr Iqbal Hassan, came to see me about last week—the way that a bank can suddenly close down their customers’ bank accounts without any notice. In his case, he simply got a text message saying that there were insufficient funds in his bank account and that it had been frozen. He then showed me the letter of apology he received from the bank. The letter gave absolutely no explanation of why the bank—it was Barclays bank in this case— had shut down his bank account. In fact, it said that it did not know why it had happened, but then, a day after that, it closed it completely. Many practices of that kind are going on.

There is also the negligence of banks in relation to customers being defrauded, often over the telephone. They rely on the concept of gross negligence on the part of their customers, which is completely unacceptable. A constituent—I will not name them here, because it is very difficult when this happens—at first lost over £40,000 as a result of this kind of fraud. Fortunately, through the help that I was able to give and through the help of people like Richard Emery—I commend him for his work on this kind of banking fraud—we were able to recover most of my constituent’s money. However, there are many similar cases in which Members’ constituents are not being refunded money that has been transferred from their accounts to accounts in other banks, which are taking no responsibility for giving harbour to criminals by holding their accounts and paying out money that has been stolen from our constituents.

We should have a public inquiry, and I urge the Minister to talk to his Treasury Minister colleagues about it. I know that he may not be able to make an announcement during today’s debate, but I hope he will go away and talk to his colleagues about the requirement for a proper, fully empowered public inquiry to investigate this scandal.

Protection of Welsh Speakers from Defamation

Kevin Brennan Excerpts

Tuesday 24th April 2018 Westminster Hall

[Liz Saville Roberts]

I am grateful to the hon. Gentleman for raising something that I will raise anon. The two of us agree with the National Union of Journalists, which has raised that very point. Sadly, we live in a time when bigotry is increasingly acceptable. Hate words open the way to hate crimes.

[Kevin Brennan (Cardiff West) (Lab)]

The hon. Lady is being hugely generous in giving way. Does she agree that one way we could address this issue is by extending the use of the Welsh language in this place? It is currently restricted to the Welsh Grand Committee, but I wrote to the Leader of the House today to ask her to meet me to discuss permitting the use of Welsh in our debates in this Chamber and in the main Chamber. Does the hon. Lady think that that might be one way to raise the profile of the Welsh language and stop the bile of the bigots?

[Liz Saville Roberts]

Of course. We recently used Welsh for the first time in the Welsh Grand Committee, but allowing its use in the Chamber and here in Westminster Hall would be a clear statement about the status of the language.

IPSO acknowledges that hate crimes and hate words are connected by exhorting the media to avoid prejudicial or pejorative reference to an individual’s race, colour, religion, sex, gender identity or sexual orientation, or to any physical or mental illness or disability, but complaints to IPSO are turned down on the ground that the editors’ code does not apply to groups of people. As I mentioned, the NUJ has long campaigned for the press regulator to accept complaints about how specific groups are represented in the media, rather than confining its remit to comments relating to specific individuals.

The drip feed of mockery undermines the extraordinary success story of one minority language at a time when 97% of the world speaks around 4% of the world’s languages—mostly English, Spanish, Portuguese, Mandarin Chinese, Russian, Indonesian, Arabic, Swahili and Hindi—and only 3% speak the roughly 96% remaining languages. Wales’s Government have set a target of doubling the number of Welsh speakers to 1 million by 2050. The number of pupils in Welsh medium schools reached an all-time high last year of almost 106,000, and more than 1 million people learn Welsh on the language learning app Duolingo.

Business of the House

Kevin Brennan Excerpts

Thursday 11th January 2018 Commons Chamber

[Paul Maynard]

I can only applaud my hon. Friend’s dexterity in making his point. I know from experience that it often takes a long time for local councils to get details of the ownership of vacant houses, so he is right to raise the issue. I urge him to apply for a Westminster Hall debate to fully air the issue with Ministers.

[Kevin Brennan (Cardiff West) (Lab)]

Has the temporary Deputy Leader of the House seen early-day motion 775?

[This House notes with concern that airlines are increasingly requiring musicians to purchase a seat for guitars, and other musical instruments of similar size, or requiring that they be placed in the aircraft hold where temperatures are very low and damage may occur during transit; further notes the campaign led by the Musicians Union to show more consideration to musicians travelling with their instruments; and calls on the airline industry to adopt a code of practice to give musicians travelling with their instruments greater consideration, fair and consistent treatment, and peace of mind.]

I declare my interest as a member of the Musicians Union. Airlines are increasingly making life difficult for musicians who have guitar-sized and smaller musical instruments. Is it not time for the Government to have a debate about this, or at least to call in the airlines to talk to them about setting up some kind of code of conduct to ensure that our very talented musicians are not impaired in this way?

[Paul Maynard]

I know the hon. Gentleman has raised this issue before on a number of occasions. I have not yet got to the stage of taking my EDM book home with me for bedtime reading, but perhaps I should go down that path. As he knows, we have Transport questions on Thursday, which is a perfect opportunity to speak to the new aviation Minister to see what they have to say about this important issue. I recognise that this can be a real challenge, particularly for those with larger instruments.

Public Sector Pay

Kevin Brennan Excerpts

Monday 4th December 2017 Westminster Hall

[Helen Jones]

My hon. Friend is right, and I will come to that issue later.

None of us could function day to day without, for instance, the people who sweep our streets and empty our bins. I mention them because their hard and unglamorous jobs—as many public sector jobs still are—often get overlooked when we talk about the public sector. We understandably see documentaries about hospitals and schools, but I would like to mention those people who are now officially refuse disposal operatives, but in my neck of the woods are the binnies. They do a grand job.

[Kevin Brennan (Cardiff West) (Lab)]

I congratulate my hon. Friend on the way in which she is introducing the debate. As Chair of the Petitions Committee, she always introduces these debates with great force and eloquence. In addition to the points she has made, does she agree that public sector workers are also consumers? It is essential that they are appropriately rewarded, as consumers, for their work so that they too can contribute to stimulating the economy, including the private sector.

Autumn Statement

Kevin Brennan Excerpts

Wednesday 23rd November 2016 Commons Chamber

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

It is a privilege to report today on an economy that the International Monetary Fund predicts will be the fastest-growing major advanced economy in the world this year. It is an economy with employment at a record high and unemployment at an 11-year low; and an economy that, through the hard work of the British people, has bounced back from the depths of Labour’s recession. It is an economy that has confounded commentators at home and abroad with its strength and resilience since the British people decided, exactly five months ago today, to leave the European Union and chart a new future for our country.

That decision will change the course of Britain’s history. It has thrown into sharp relief the fundamental strengths of the British economy that will ensure our future success: the global reach of our services industries; the strength of our science and high-tech manufacturing base; and the cutting-edge British businesses that are leading the world in disruptive technologies. But it is a decision that also makes more urgent than ever the need to tackle our economy’s long-term weaknesses such as the productivity gap, the housing challenge, and the damaging imbalance in economic growth and prosperity across our country. We resolve today to confront those challenges head on, to prepare our country to seize the opportunities ahead, and, in doing so, to build an economy that works for everyone—an economy where every corner of this United Kingdom is part of our national success.

I want to pay tribute to my predecessor, my right hon. Friend the Member for Tatton (Mr Osborne). My style will, of course, be different from his. I suspect that I will prove no more adept at pulling rabbits from hats than my successor as Foreign Secretary has been at retrieving balls from the back of scrums, but my focus on building Britain’s long-term future will be the same. My right hon. Friend the Member for Tatton took over an economy on the brink of collapse, with the highest budget deficit in our post-war history, and brought that down by two thirds. That is a record of which he can be proud.

But times have moved on, and our task now is to prepare our economy to be resilient as we exit the EU and to be match-fit for the transition that will follow. So we will maintain our commitment to fiscal discipline while recognising the need for investment to drive productivity, and for fiscal headroom to support the economy through the transition.

Let me turn now to the forecasts. Since 2010, the Office for Budget Responsibility has provided an independent economic and fiscal forecast to which the Government must respond—gone are the days when the Chancellor could mark his own homework—and I thank Robert Chote and his team for their hard work. Today’s OBR forecast is for growth to be 2.1% in 2016—higher than forecast in March. In 2017, the OBR forecasts growth to slow to 1.4%, which it attributes to lower investment and weaker consumer demand driven, respectively, by greater uncertainty and by higher inflation resulting from sterling depreciation. That is slower, of course, than we would wish, but still equivalent to the IMF’s forecast for Germany, and higher than the forecast for growth in many of our European neighbours, including France and Italy. That fact will, no doubt, be a source of very considerable irritation to some.

As the effects of uncertainty diminish, the OBR forecasts growth recovering to 1.7% in 2018, 2.1% in 2019 and 2020, and 2% in 2021. While the OBR is clear that it cannot predict the deal the UK will strike with the EU, its current view is that the referendum decision means that potential growth over the forecast period is likely to be 2.4 percentage points lower than would otherwise have been the case. The OBR acknowledges that there is a higher degree of uncertainty around these figures than usual.

Despite slower growth, the UK labour market is forecast to remain robust. We have delivered over 2.7 million new jobs since 2010, and this forecast shows that number growing in every year—another 500,000 jobs created over the OBR forecast, providing security for working people across the length and breadth of Britain.

For those who claim that the recovery is just a south-east phenomenon, I have some news: over the past year employment grew fastest in the north-east, the claimant count fell fastest in Northern Ireland, pay grew most strongly in the west midlands, and every UK nation and region saw a record number of people in work. That is a labour market recovery that is working for everyone.

Monetary policy has played an important role in supporting growth since the referendum decision, but a credible fiscal policy remains essential for maintaining market confidence and restoring the economy to long-term health. In view of the uncertainty facing the economy, and in the face of slower growth forecasts, we no longer seek to deliver a surplus in 2019-20, but the Prime Minister and I remain firmly committed to seeing the public finances return to balance as soon as practicable, while leaving enough flexibility to support the economy in the near term.

Today I am publishing a new draft charter for budget responsibility with three fiscal rules: first, that the public finances should be returned to balance as early as possible in the next Parliament and, in the interim, cyclically adjusted borrowing should be below 2% by the end of this Parliament; secondly, that public sector net debt as a share of GDP must be falling by the end of this Parliament; and, thirdly, that welfare spending must be within a cap set by the Government and monitored by the OBR. In the absence of an effective framework, the welfare bill in our country spiralled out of control, with spending on working-age benefits trebling in real terms between 1980 and 2010. As a result of the action that we have taken since 2010, that spending has now stabilised. The cap I am announcing today takes into account the policy changes made since the last Budget, setting a realistic baseline reflecting all announced welfare policies. I confirm again today that the Government have no plans to introduce further welfare savings measures in this Parliament beyond those already announced.

I now turn to the OBR’s fiscal forecasts, but first I will set out the key drivers of changes since the Budget: the post-Budget changes that were made to welfare and housing policies cost the Exchequer £8.6 billion over the forecast period; expected Office for National Statistics classification changes have added £12 billion since the Budget; and tax receipts have been lower than expected this year, causing the OBR to revise down projected revenues in the future. Added to this is a structural effect of rapidly rising incorporation and self-employment, which further erodes revenues.

Combining those pressures with the impact of forecast weaker growth, and taking account of the measures I shall announce today, the OBR now forecasts that, in cash terms, borrowing is set to be £68.2 billion this year, falling to £59 billion next year and £46.5 billion in 2018-19, and then £21.9 billion, £20.7 billion, and finally £17.2 billion in 2021-22. Overall, public sector net borrowing as a percentage of GDP will fall from 4% last year to 3.5% this year, and it will continue to fall over the Parliament, reaching 0.7% in 2021-22. This will be the lowest deficit as a share of GDP in two decades. The OBR expects cyclically adjusted public sector net borrowing to be 0.8% of GDP in 2020-21, comfortably meeting our target to reduce it to less than 2% and, importantly, leaving significant flexibility to respond to any headwinds that the economy may encounter.

The OBR’s forecast of higher borrowing and slower asset sales, together with the temporary effect of the Bank of England’s action to stimulate growth, translates into an increased forecast for debt in the near term. The OBR forecasts that debt will rise from 84.2% of GDP last year to 87.3% this year, peaking at 90.2% in 2017-18 as the Bank of England’s monetary policy interventions approach their full effect. In 2018-19, debt is projected to fall to 89.7% of national income—the first fall in the national debt as a share of GDP since 2001-02—and it is forecast to continue falling thereafter. Members might be interested to know that after stripping out the effects of the Bank of England interventions, underlying debt peaks this year at 82.4% of GDP and falls thereafter to 77.7% by 2021-22.

It is customary in the run-up to the autumn statement to hear representations from the shadow Chancellor of the day, usually for untenable levels of spending and borrowing. Conservative Members used to think that Ed Balls’ demands were an extreme example, but I have to say that the current shadow Chancellor has outperformed him in the fiscal incontinence sweepstake. What we do not know, of course, is whether the shadow Chancellor can also dance—[Interruption.] He can. Good; a second career awaits him.

I have received some more measured representations from a range of external bodies. Some have called for fiscal expansion, while others have suggested that there is no need at all to respond to a changed economic outlook. That reflects, to be fair, the challenge that we face of resolving how best to protect the recovery and build on the economy’s manifest strengths, yet at the same time respond appropriately to the warnings of a more difficult period ahead.

But with our debt forecast to peak at over 90% next year, and a deficit this year of 3.5%, I have reached my own judgment. It is a judgment based on a sober analysis of our fiscal position, and also on a realistic appraisal of the weakness of UK productivity and the urgent need to address our fiscal challenge from both ends—continuing to control public expenditure, but also growing the potential of the economy and protecting the tax base. So we choose in this autumn statement to prioritise additional high-value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britain’s productivity. The key judgment we make today is that our hard-won credibility on public spending means that we can fund this commitment in the short term from additional borrowing, while funding all other new policies announced in this autumn statement through additional tax and spending measures. That is the responsible way to secure our economy for the long term.

The productivity gap is well known to hon. and right hon. Members, but shocking none the less—it bears repeating. We lag the US and Germany by some 30 percentage points in productivity, but we also lag France by over 20 points and Italy by 8 points, which means, in the real world, that it takes a German worker four days to produce what we make in five. That means, in turn, that too many British workers work longer hours for lower pay than their counterparts, and that has to change if we are to build an economy that works for everyone. Raising productivity is essential for the high-wage, high-skill economy that will deliver higher living standards for working people across this country.

As a result of decisions taken by my predecessor, public investment is higher over this decade than it was over the whole of the period of the last Labour Government, but today I can go further. I can announce that we are forming a new national productivity investment fund of £23 billion to be spent on innovation and infrastructure over the next five years—investing today for the economy of the future.

Let me set out for the House how this money will be used. We do not invest enough in research, development and innovation. As the pace of technology advances and competition from the rest of the world increases, we must build on our strengths in science and tech innovation to ensure that the next generation of discoveries is not only made here, but developed and produced in Britain. So today I can confirm the additional investment in R and D, rising to an extra £2 billion per year by 2020-21, that was announced by my right hon. Friend the Prime Minister on Monday.

Economically productive infrastructure directly benefits businesses, but families, too, rely on roads, rail, telecoms and, especially, housing. We have made good progress, with the number of new homes being built last year hitting an eight-year high, but for too many the goal of home ownership remains out of reach. In October, my right hon. Friend the Communities and Local Government Secretary launched the £3 billion home building fund to unlock over 200,000 homes and up to £2 billion to accelerate construction on public sector land, but we must go further still. The challenge of delivering the housing we so desperately need in the places where it is currently least affordable is not, of course, a new one, but the effect of unaffordable housing on our nation’s productivity makes it an urgent one. My right hon. Friend will bring forward a housing White Paper in due course to address these long-term challenges but, in the meantime, we can take further steps.

One of the biggest objections to housing development, as hon. and right hon. Members will know from their constituencies, is often the impact on local infrastructure, so we will focus Government infrastructure investment to unlock land for housing with a new £2.3 billion housing infrastructure fund to deliver infrastructure for up to 100,000 new homes in areas of high demand. To provide affordable housing that supports a wide range of need, we will invest a further £1.4 billion to deliver 40,000 additional affordable homes. I will also relax restrictions on Government grant to allow providers to deliver a wider range of housing types. I can also announce a large-scale regional pilot of right to buy for housing association tenants, and continued support for home ownership through the Help to Buy equity loan scheme and the Help to Buy ISA.

This package means that over the course of this Parliament, the Government expect to more than double, in real terms, annual capital spending on housing. Coupled with our resolve to tackle the long-term challenges of land supply, this commitment to housing delivery represents a step change in our ambition to increase the supply of homes for sale and for rent to deliver a housing market that works for everyone.

Reliable transport networks are essential to growth and productivity, so this autumn statement commits significant additional funding to help to keep Britain moving now, and to invest in the transport networks and vehicles of the future. I will commit: an additional £1.1 billion of investment in English local transport networks, where small investments can often offer big wins; £220 million additionally to address traffic pinch points on strategic roads; £450 million to trial digital signalling on our railways to achieve a step change in reliability and to squeeze more capacity out of our existing rail infrastructure—I know the Leader of the Opposition will welcome that—and, finally, £390 million to build on our competitive advantage in low-emission vehicles and the development of connected autonomous vehicles, plus a 100% first year capital allowance for the installation of electric vehicle charging infrastructure.

The Department for Transport will continue to work with Transport for the North to develop detailed options for northern powerhouse rail. My right hon. Friend the Transport Secretary will set out more details of specific projects and priorities over the coming weeks.

Our future transport, business and lifestyle needs will require world-class digital infrastructure to underpin them, so my ambition—

[Kevin Brennan (Cardiff West) (Lab)]

It says here.

[Mr Hammond]

Yes—it says here because I wrote it here.

My ambition is for the UK to be a world leader in 5G. That means a full-fibre network; a step change in speed, security and reliability. So we will invest over £1 billion in our digital infrastructure to catalyse private investment in fibre networks and to support 5G trials. From April, we will introduce 100% business rates relief for a five-year period on new fibre infrastructure, supporting further roll-out of fibre to homes and businesses.

We have chosen to borrow to kick-start a transformation in infrastructure and innovation investment, but we must sustain this effort over the long term if we are to make a lasting difference to the UK’s productivity performance, so today I have written to the National Infrastructure Commission to ask it to make its recommendations on the future infrastructure needs of the country, using the assumption that the Government will invest between 1% and 1.2% of GDP every year from 2020 in economic infrastructure covered by the commission. To put that in context, we will spend around 0.8% of GDP on the same definition this year.

I am also backing the commission’s interim recommendations on the Oxford-Cambridge growth corridor, published last week, with £110 million of funding for east-west rail and a commitment to deliver the new Oxford-Cambridge expressway. That project can be more than just a transport link. It can become a transformational tech corridor, drawing on the world-class research strengths of our two best-known universities. I welcome the commission’s continuing work on delivery model options. We will carefully consider its final recommendations in due course.

The major increase in infrastructure spending I have announced today will represent a significant increase in funding through the Barnett formula, of more than £250 million to the Northern Ireland Executive, £400 million to the Welsh Government and £800 million to the Scottish Government.

Public investment is only part of the picture, however. About half of our economic infrastructure is financed by the private sector, and we will continue to support that investment through the UK guarantee scheme, which I am today extending until at least 2026. The new capital investment I have announced will provide the financial backbone for the Government’s industrial strategy that the Prime Minister spoke about on Monday, a firm foundation upon which my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy will work with industry to build our ambition of an economy that works for all.

I can announce four further measures to back business. I am doubling the UK export finance capacity to make it easier for British businesses to export. I am funding Charlie Mayfield’s business-led initiative to boost management skills across British businesses. I am taking a first step to tackle the long-standing problem of our fastest growing start-up tech firms being snapped up by bigger companies, rather than growing to scale, by injecting an additional £400 million into venture capital funds through the British Business Bank, unlocking £1 billion of new finance for growing firms. I am also launching today a Treasury-led review of the barriers to accessing patient capital in the UK, so that we can take further action to address them.

This Government recognise that, for too long, economic growth in our country has been too concentrated in London and the south-east. That is not just a social problem but an economic problem. London is one of the highest-productivity cities in the world and we should celebrate that fact. But no other major developed economy has such a gap between the productivity of its capital city and its second and third cities, so we must drive up the performance of our regional cities. Today we publish our strategy for addressing productivity barriers in the northern powerhouse, and give the go ahead to a programme of major roads schemes in the north. Our midlands engine strategy will follow shortly, but I am today providing funding so that the evaluation study for the midlands rail hub can go ahead.

In addition, we are investing in local infrastructure in every region of England. I can announce the allocation of £1.8 billion from the local growth fund to the English regions: £556 million to local enterprise partnerships in the north of England, £542 million to the midlands and east of England, and £683 million to LEPs in the south-west, south-east and London. We will announce the detailed breakdown of allocations to individual LEPs shortly.

Devolution remains at the heart of this Government’s approach to supporting local growth, and we recommit today to our city deals with Swansea, Edinburgh, north Wales and Tay cities. I can also announce today we are beginning negotiations on a city deal for Stirling so that every single city in Scotland will be on course to have a city deal. To support new mayoral combined authorities in England, I can announce that we will grant them new borrowing powers to reflect their new responsibilities.

While we continue discussions with London and the west midlands on possible devolution of further powers I can announce today that London will receive £3.15 billion as its share of national affordable housing funding, to deliver a commitment of more than 90,000 affordable homes. I can also announce that we are devolving to London the adult education budget, and giving London greater control over the delivery of employment support services for the hardest to help.

I have deliberately avoided making this statement into a long list of individual projects being supported, but I am going to make one exception. I will act today, with just seven days to spare, to save one of the UK’s most important historic houses, Wentworth Woodhouse near Rotherham. It is said to be the inspiration for Pemberley in Jane Austen’s “Pride and Prejudice”. But in 1946, in an extraordinary act of cultural vandalism, the then Labour Government authorised extensive opencast coal mining virtually up to the front door of this precious property. Perhaps that is Labour’s idea of a northern powerhouse. Wentworth Woodhouse is now—[Interruption.]