Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Mrs Maria Miller (Basingstoke) (Con)]

2. What fiscal steps his Department is taking to reduce unemployment.

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

As a result of tough decisions made by Conservative-led Governments, the UK’s fiscal position has improved enormously since 2010. Contrary to the consistent predictions of doom-mongers on the Opposition Benches, during that process UK employment has also grown consistently. It now stands at record levels, and the unemployment rate is at its lowest in 40 years. However, we are further supporting job growth through the lowest corporation tax rate in the G20, and reduced employment costs through the employment allowance.

My right hon. Friend will know that our track record stands in stark contrast to that of Labour. No Labour Government have ever left office with unemployment lower than when they entered it.

[Mrs Miller]

The Chancellor is right. Record numbers of women are in work in this country, but I would like to see more of those women in better-paid jobs. Does the Chancellor support the Prime Minister’s view that all jobs should be flexible from day one, and will he be doing anything to turn those words into practice in all our businesses?

[Mr Hammond]

Yes. Female employment is indeed vitally important, and it has grown to a record high of 71.3%. As the labour market tightens, it is not just fair for us to make it possible and attractive for women to take part in the workforce; it is absolutely essential from an economic point of view. Dealing with any concealed discrimination is key to making it possible for women not only to enter the workforce, but to progress within the workforce to highly paid and rewarding jobs.

[Rachel Reeves (Leeds West) (Lab)]

One way to reduce unemployment is to encourage self-employment, and 4.8 million people are now self-employed. While that is welcome, there is a real problem of bogus self-employment, which is costing workers their rights and depriving the Treasury of tax revenue. Next week it will be a whole year since Matthew Taylor published his review “Good work” for the Government. When will they finally implement his recommendations and crack down on bogus self-employment?

[Mr Hammond]

The hon. Lady is right on both counts. Self-employment is an important contributor to our economy and genuine self-employment is very much to be encouraged, but there is a problem of bogus self-employment. People who are essentially employed are not paying the proper taxes and operating according to the proper rules for people who are employed, and in some cases employers are concealing the employment of people for their own selfish reasons. We need to deal with both those counts.

[Sir David Evennett (Bexleyheath and Crayford) (Con)]

16. Given that we are a Government and a party that strongly supports business and entrepreneurs, what estimate has my right hon. Friend made of business investment in the UK during the last eight years?

[Mr Hammond]

Business investment in the UK over the last eight years has recovered significantly since the financial crisis, but right now, as my right hon. Friend knows, there is a degree of uncertainty. We need to get through this period of uncertainty in order to see a continuing commitment by business to invest in the UK economy, and that is what the Government are committed to doing.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Chancellor says that we need to deal with bogus self-employment, and I absolutely agree. One in 10 workers in the north-east are on zero-hours contracts, in temporary roles, or in low-paid and often bogus self-employment. What will the Chancellor do to ensure that these new jobs are genuinely sustainable roles, and that people are not leading their lives in insecure work without real employment rights?

[Mr Hammond]

The overwhelming majority of the over 1,000 new jobs a day that have been created since the 2010 general election have been conventional jobs; only a tiny fraction of people in the workforce are on zero-hours contracts—less than 2.8%. Zero-hour contracts do have a role to play, but the Government have taken action to make sure they are not abused, and we will continue to take action to make sure that the flexibilities that are essential to the operation of our labour market and the attraction of the UK for international investment are not abused.

[Robert Neill (Bromley and Chislehurst) (Con)]

19. Businesses in my constituency have been telling me that as we leave the EU they want to have the assurance and clarity of security of their supply chains, not to be burdened with undue regulation and paperwork in relation to customs, and in financial services both clarity and certainty of alignment and regulation; they also want the ability to fly in key personnel across our EU markets to advise clients. Does my right hon. Friend agree that their views should be treated with respect and seriousness?

[Mr Hammond]

Yes, the views of business, which is the great generator of employment, wealth and prosperity in our country, should always be taken very carefully into account. We should listen to what business is telling us and make sure that we deliver a Brexit that delivers on the needs of business.

[Alison McGovern (Wirral South) (Lab)]

The Chancellor lauds both the employment rate and the fiscal steps the Government he has been a part of have taken, but that data masks a host of problems, so can he confirm to the House today that he thinks a rising child poverty rate is a price worth paying for his spin and rhetoric?

[Mr Hammond]

No, and I should tell the hon. Lady that the proportion of people in absolute poverty is at a record low. Since 2010 there are 1 million fewer people in absolute low income; there are 300,000 fewer children in absolute low income and 200,000 fewer pensioners in absolute low income, and 881,000 fewer workless households. That is a great result and a great record, and we are proud of it.

[Rebecca Pow (Taunton Deane) (Con)]

3. What assessment he has made of the effect of the tax regime on the ability of the forestry sector to deliver value for money.

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[Damian Green (Ashford) (Con)]

4. What steps he is taking to support first-time house buyers throughout the country.

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

The Government have helped more than 300,000 first-time buyers to buy a home through our Help to Buy scheme, which includes the help to buy ISA, the help to buy equity loan and now the lifetime ISA. At the autumn budget I went further by abolishing stamp duty land tax for first-time buyers on property up to £300,000. Over 69,000 first-time buyers have already benefited from this change and we expect to help over 1 million first-time buyers over five years—and I remind my right hon. Friend that the Labour party voted against that measure.

[Damian Green]

Many younger homeowners will I am sure be delighted that the Government have cut stamp duty for 95% of first-time buyers. Can the Chancellor say how the rate of creating first-time buyers compares with previous periods, as keeping alive the dream of home ownership for many is essential for the long-term health of our society?

[Mr Hammond]

I can tell my right hon. Friend that under the last Labour Government, the number of people achieving home ownership fell by 61%. I think Labour’s position is clear. The Leader of the Opposition has described home ownership as a national obsession; for the Government it is a national priority. We are helping hundreds of thousands of people across the country to achieve the dream of owning their own home, and that is why I am proud that, under a Conservative Government, the number of first-time buyers is now at an 11-year high.

[Catherine West (Hornsey and Wood Green) (Lab)]

Will the Chancellor tell us what is being done for people who cannot afford their own home, in terms of lifting the borrowing requirement on councils so that they can build more social homes?

[Mr Hammond]

We have a £9 billion affordable homes programme, and we announced a £2 billion uplift in that programme last autumn. We have increased additional flexibilities to allow building for social rent and to relax the housing revenue account caps on local authorities in the highest demand areas. This Government’s programme to deliver the homes this country needs achieved 217,000 net additional dwellings last year and is on track to deliver 300,000 net additional dwellings a year by the middle of the 2020s.

[Alberto Costa (South Leicestershire) (Con)]

It is indeed commendable that the policies the Chancellor has brought to the House and made into law have been of enormous benefit to my constituents. Will he intensify his efforts in helping not only first-time buyers but those who find it difficult to afford houses? Can he perhaps say a few words on what he might do for them?

[Mr Hammond]

The key to dealing with the challenge that my hon. Friend outlines is to ensure improvements in the supply of housing. We have a consultation under way on the national planning policy framework, which will get more houses built, and we have measures to support demand by making Help to Buy equity loans available to those who are seeking to enter the housing market. This Government will remain committed to increasing the supply and to supporting those who need help, in order to make effective demand in this market.

[David Hanson (Delyn) (Lab)]

The Help to Buy scheme helps homeowners, but it also appears to be helping the shareholders, chairmen and chief executives of major building firms. Will the Chancellor take this opportunity to condemn the £500 million bonus paid to the chairman of Persimmon Homes and his staff?

[Mr Hammond]

Our objective is to increase supply, not to increase the profits of house builders. To do that, we need to ensure that the planning system can be responsive to the demand that we are creating by supporting people with measures such as Help to Buy equity loans, and that is what we intend to do through the national planning policy framework changes.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

5. What assessment his Department has made of the fiscal effect on the agricultural sector of the UK leaving the EU customs union and single market.

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[Liz Twist (Blaydon) (Lab)]

8. What recent discussions he has had with the Secretary of State for Health and Social Care on changes in the level of funding for public health since 2010.

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

I have regular discussions with the Secretary of State for Health and Social Care about funding for public health. We fully understand the need to continue supporting prevention and public health in order to manage pressures on the NHS, and we will be setting out budgets for the public health grant in the forthcoming spending review.

[Liz Twist]

Gateshead Council will see a 15% reduction—that is £2.3 million—in its public health grant between 2013 and 2019-20, yet the recent NHS funding statement does not cover public health. With healthy life expectancy 13.8 years lower for men and 12.8 years lower for women in Gateshead than in many other areas, would it not make sense to invest in increased funding for public health services now to reduce demand on acute NHS services in the future?

[Mr Hammond]

The recent announcement of an additional £20 billion a year by 2023-24 for NHS funding was about core NHS funding. That is a huge commitment: £83 billion over the next five years. However, the hon. Lady is of course right to say that public health spending is also very important and has a direct impact on the way the NHS operates. Local authorities will receive more than £9 billion to spend on public health between now and 2021, but that is not the only stream of funding for public health. NHS England and the Department of Health and Social Care pay for Public Health England and for immunisation, screening and other preventive programmes. The NHS 10-year plan, which is currently under development, will set out proposals for public health.

[Mr Speaker]

We thank the Chancellor for his views, which have been set out in considerable detail. The right hon. Gentleman cannot be accused of excluding any consideration that might, at any time, to any degree, be judged material.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Last year, NHS England was given £337 million to prepare for winter pressures, but the Scottish Government received only £8.4 million rather than the expected £32 million. The Secretary of State for Health and Social Care has claimed that Scotland will get £2 billion from this recent uplift. When we will know the real figure?

[Mr Hammond]

I can give it to the hon. Lady now, with a brevity you will be proud of, Mr Speaker. It is £2.27 billion in 2023-24.

[Sir Henry Bellingham (North West Norfolk) (Con)]

9. What assessment his Department has made of the effect of the tax regime for onsite battery storage on the development of the UK battery storage market.

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[Tom Brake (Carshalton and Wallington) (LD)]

T1. If he will make a statement on his departmental responsibilities.

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

My principal responsibility is to ensure economic stability and the continued prosperity of the British people, both during this period of heightened uncertainty and beyond it, after Brexit. I will do so by building on the plans that I set out in the autumn Budget and the spring statement. The Prime Minister recently announced a five-year NHS funding package that will boost spending on health by more than £20 billion a year in real terms in England alone. She also confirmed that we will stick to our fiscal rules and continue to reduce debt. It is our balanced approach to the public finances that enables us to give households, businesses and our public services targeted support in the near term, as well as to invest in the future of this country and to get debt down to be fair to the next generation.

[Tom Brake]

The Chancellor mentioned the NHS funding package. Will he confirm how much of that extra funding will come from the Brexit dividend, and how much will come from higher taxes for businesses and individuals, and on alcohol and fuel?

[Mr Hammond]

Obviously, the element of funding that can be provided by net savings from contributions to the European Union will depend intrinsically on the deal that we negotiate with the European Union. We will be working to get the very best possible deal that we can for Britain to ensure that that contribution makes up the largest possible proportion of the additional NHS funding.

[Andrew Selous (South West Bedfordshire) (Con)]

T4. Only 15% of people who start their working lives in entry-level jobs in this country manage to rise above that level. This country would be more prosperous and socially just, and would have a bigger tax base, if we could help them. What more can we do to help that segment of the population?

[John McDonnell (Hayes and Harlington) (Lab)]

As my hon. Friend the Member for West Bromwich West (Mr Bailey) pointed out, the British Chambers of Commerce has said today that its patience with the Government over Brexit is at “breaking point”. Its sense of frustration reflects accurately what trade unions and businesses across the country feel. All the British Chambers of Commerce wants are answers to some very basic questions, so will the Chancellor and those on the Treasury Bench provide some answers today? Post-Brexit, will goods be subject to new procedures and delayed at border points? Will regulation checks on goods conducted in the UK be recognised in Europe? Will firms be able to transfer staff between the UK and the EU as they do now? Above all else, will Ministers stop squabbling and provide some answers to these vital questions?

[Mr Philip Hammond]

It is fascinating to see the right hon. Gentleman posing as the champion of business when he has been attacking and undermining business ever since he got into his current position. Yes, I recognise all the questions he asked. The Cabinet will meet on Friday to set out our way forward in our negotiation with the European Union. We recognise that this is now urgent and that we need to make progress. The right hon. Gentleman mentioned minimising frictions and maximising flexibility for employers in order to protect jobs and investment. We agree with him and the British Chambers of Commerce on all those things, and we will be looking to deliver a Brexit that maximises employment and prosperity in this country.

[John McDonnell]

The Chancellor does not have to worry about others undermining capitalism; the Government are doing a pretty good job themselves.

When the warring factions in the Cabinet meet this weekend, it is the role of Treasury Ministers to bring them into the real world and point out to them firmly the real cost of a no-deal Brexit for jobs, the economy and all our living standards, so will the Chancellor tell us today the Treasury’s latest estimate of the cost of no deal, its consequences for the economy and the potential loss of jobs? Surely it is time for him to show a bit of grit and to make it clear that no responsible Chancellor could remain in a Cabinet that is so recklessly putting our economy at risk through no deal?

[Mr Hammond]

I assure the right hon. Gentleman that I will be setting out for my colleagues, in the privacy of our Cabinet meeting on Friday, the Treasury’s assessment—indeed, the cross-Whitehall economic group’s assessment—of the implications of potential routes forward. However, as the Prime Minister has said, we cannot give a running commentary in public on a matter about which we are in intensive negotiation with our European interlocutors. I have said before, and say again today, that when the time comes for Parliament to vote on our proposed package, I will make sure that all the available material is put into the public domain so that Members of Parliament are properly informed.

[James Cleverly (Braintree) (Con)]

T7. In Braintree, in Halstead and in the villages of my constituency, including my own lovely village of Earls Colne, there are a number of thriving businesses in retail, manufacturing and other sectors, but at the moment there is a disparity between the tax treatment of physical businesses and that of digital businesses. What plans do Ministers have to rebalance the tax treatment of those two types of businesses?

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[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.

[Imran Hussain (Bradford East) (Lab)]

T5. The Chancellor and his Ministers accuse Labour of doom and gloom. Well, let me ask him this: what does he say to the hundreds of people in my constituency who are homeless as a result of his austerity? What does he say to the parents who send children to school hungry as a result of his austerity? What does he say to the communities that have been devastated as a result of his austerity? Is it not time that the Chancellor came out of his ivory tower and connected to reality?

[Mr Speaker]

The hon. Gentleman is a cheeky chappie in this Chamber. I counted no fewer than four questions, to which I know the Chancellor, with his customary intellectual dexterity, will reply with one answer, embracing the gamut of issues if he wishes.

[Mr Hammond]

Indeed, Mr Speaker. What I will say is that we have spent the last eight years cleaning up the mess that was left behind for us by the last Labour Government and trying to mitigate its impacts on ordinary families up and down this country. It is the same whenever Labour gets into power: it is always ordinary people and the most vulnerable in society who suffer the most, and it is always the Tory party that has to clean up the mess.

[Peter Aldous (Waveney) (Con)]

To follow on from the question asked by the hon. Member for Eastbourne (Stephen Lloyd), the retrospective nature of the 2019 loan charge could bankrupt thousands of people. Will the Government revise legislation to ensure that that does not happen, with the loan charge only applying to disguised remuneration loans made after the passing of the Finance (No. 2) Act 2017?

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[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

There was a recent announcement about extending contracts for rental homes to three years and losing the six-month rental position. May I urge the Treasury to look carefully at that? The last thing we want is fewer rental homes on the market and higher costs, as that would also have an impact on welfare costs.

[Mr Philip Hammond]

That consultation was announced by the Secretary of State for Housing, Communities and Local Government. I am acutely conscious of the risks that my right hon. Friend sets out. I assure him that I have looked very carefully at the wording of the consultation and I am confident that we will not fall into the trap that he suggests. We are looking at making a three-year term the default option for private sector renting.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

T6. In its report published today, which was commissioned by the Co-op party, the New Economics Foundation identifies lack of access to finance as a significant inhibitor in the growth of the co-op sector. While I am grateful to the Economic Secretary to the Treasury for his interest in this area, I wonder what steps the Treasury might now take to tackle that problem.

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[Clive Efford (Eltham) (Lab)]

Is it possible to provide the funding that our NHS needs and at the same time keep to the reckless tax cuts that the Government announced in their manifesto last year?

[Mr Philip Hammond]

We did not announce any reckless tax cuts in the manifesto last year. The Prime Minister made it very clear in her announcement about NHS funding that we will continue to deliver on our fiscal rules, and we will continue to ensure that debt falls. I will make announcements at future fiscal events explaining exactly how we will do that.

[Robert Halfon (Harlow) (Con)]

Given that the independent Centre for Economics and Business Research has said that the fuel duty freeze has contributed to creating 121,000 jobs, and that the Treasury said in 2014 that the benefits of the fuel duty freeze had offset the loss in tax income, does the Minister not agree that it would be absolute madness to raise fuel duty and hit working people up and down this country?

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

Over 1,600 people work at the Jaguar Land Rover engine plant in Wolverhampton, and the car industry has serious concerns about the Government’s plans to leave the customs union. Will the Chancellor guarantee that, when he goes to Chequers later this week, he will only sign up to a customs arrangement that preserves just-in-time manufacturing and integrated European supply chains?

[Mr Philip Hammond]

I assure the hon. Lady that on Friday, as I have done consistently for the past two years, I will argue for a future relationship with the European Union that protects our important supply chains, protects British jobs and protects British business.

[Vicky Ford (Chelmsford) (Con)]

British insurers, such as the ones based in Chelmsford, face a dilemma over what will happen to their European clients’ contracts: it would be immoral for them not to pay out on claims, but illegal if they do so. Will you urge the European regulators to come up with the same sensible, pragmatic solutions as the British regulators?

[Mr Speaker]

Well, I won’t, but the Chancellor might.

[Mr Hammond]

Yes, Mr Speaker, I will. I can tell my hon. Friend that we have established a European working group between the Bank of England and the European Central Bank to look at questions of contract continuity and other threats to financial stability over the period when we leave at the end of March. That will be looking at insurance contracts, and it will also be looking at the very large number of outstanding derivative contracts that could also, theoretically, become unenforceable at that point.

[Several hon. Members rose—]

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[Mr Speaker]

The hon. Gentleman is clearly a devoted fan of the semicolon.

[Mr Hammond]

That is the answer, Mr Speaker.

There will be a spending review next year, when we will look at the overall spending envelope and the Government’s priorities across the entire range of public spending.

[Martin Vickers (Cleethorpes) (Con)]

I was pleased to welcome the Chief Secretary to the Treasury to my constituency a couple of weeks ago. Does she agree that the enthusiasm that we heard from local businessmen for free ports and free zones could be the way ahead for economic growth in Immingham and the surrounding area?

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[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

On his way to Chequers, will the Chancellor give a thought to health trusts such as Calderdale and Huddersfield NHS Foundation Trust? It still cannot deliver the healthcare that my constituents and people in the rest of west Yorkshire want because of the PFI hanging around their necks. Will he do something about PFIs?

[Mr Philip Hammond]

I am afraid that I have to remind the hon. Gentleman that 86% of all PFI contracts currently in place in the NHS, draining money out of NHS trusts, were put in place by the previous Labour Government.

[Several hon. Members rose—]

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[Helen Goodman (Bishop Auckland) (Lab)]

Ending tax secrecy in the overseas territories will bring in £10 billion a year. Will the Chancellor organise a lunch for my right hon. Friend the Member for Barking (Dame Margaret Hodge), the right hon. Member for Sutton Coldfield (Mr Mitchell) and the entire Labour Whips Office, who were instrumental in securing this change?

[Mr Philip Hammond]

When I have the money in the bank, I will invite them around for a glass of champagne.

[Mr Speaker]

That is a pretty generous offer from the Treasury—[Interruption.] It will be recorded in Hansard; it will be in the Official Report tomorrow.