Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Tuesday 11th September 2018 Commons Chamber

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

2. What fiscal steps he is taking to support the pubs sector.

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

Pubs are a vital part of our local communities and the Government are committed to supporting them, which is why I froze all alcohol duties in the 2017 Budget. That freeze, and cuts in alcohol taxes since 2013, mean that a typical pint of beer is 12p cheaper than it would otherwise have been.

Pubs are also benefiting from recent wider reforms of business rates that will be worth £10 billion by 2023, including the doubling of rural rate relief to 100%, the switch from retail prices to consumer prices indexing, reforms in small business rates relief that have taken 600 small businesses out of rates altogether, and the introduction and then the extension of the £1,000 business rates discount for pubs.

[James Morris]

Will the Chancellor join me in congratulating the Friends of Haden Cross, a pub in my constituency? Will he, in particular, join me in congratulating Tim Haskey and Jim Mumford, who rescued the pub when it was on the point of closure, and who, working with new management, have seen a 500% increase in takings since November? Does he agree that the Government should continue to provide good fiscal support for pubs, given their importance to our local communities?

[Mr Hammond]

My hon. Friend has detailed a remarkable turnaround in the fortunes of a pub. I congratulate the Friends of Haden Cross on that success, and on making such good use of the “assets of community value” scheme to save their local.

The Government remain clear about the fact that local pubs are instrumental in facilitating the support networks and social interactions that are such a vital part of local communities. We will continue to protect them, and it is welcome news that pubs such as the Friends of Haden Cross are benefiting from the measures that we have taken.

[Daniel Kawczynski]

Will my right hon. Friend join me on a pub crawl in Shrewsbury? [Laughter.] I am buying.

My right hon. Friend has mentioned some very positive figures relating to Government support for pubs, but I should like him to come to the Salopian Bar, my local in Shrewsbury, and hear at first hand about the extraordinary rises in business rates with which some pubs have had to deal. I should like him to gain first-hand experience, by talking to landlords, of some of the financial pressures that they are under.

[Mr Hammond]

Provided that I can have it in writing that my hon. Friend is buying, I am very tempted to consider his offer. I will negotiate with him.

I understand the pressure that pubs and many other traditional businesses are facing. Pubs in Shrewsbury have benefited from recent cuts in alcohol duties and business rates, but of course we recognise the challenge that many smaller businesses face, and we will keep that challenge very much in mind as we formulate our policies.

[Jenny Chapman (Darlington) (Lab)]

The Chancellor is obviously very welcome to join me in a pub crawl around Darlington as well. I always stand my round.

Many of us who represent towns are fighting very hard to support our high streets, and the business rate pressures that have confronted retail businesses are exactly the same when it comes to pubs and catering outlets. In my town, there are so many anomalies in relation to pubs and business rates that such anomalies have become almost normal. The situation needs to be looked at as a matter of urgency. Will the Chancellor investigate the way in which smaller pubs are particularly disadvantaged by the business rates system?

[Mr Hammond]

It is true that pubs are assessed in a different way from other retail premises for business rates purposes. We looked into that recently and concluded that the current system was in fact the best system for pubs, but I shall be happy to look into it again.

We all recognise—every single one of us, whichever part of the country we represent—that high streets are under pressure, primarily because the behaviour of consumers is changing. I think that our challenge is to support the high street as it undergoes that process of change. We cannot simply turn our backs on a change that is driven by consumer behaviour, but we must support businesses as they make it.

[Chris Elmore (Ogmore) (Lab)]

I am sure the Chancellor will agree that there is a need to encourage entrepreneurs and small business start-ups, including the setting up of new pubs. Will he agree to follow the lead of the Welsh Labour Government, who have set up a micro small business fund that provides up to £500,000 a year to enable small businesses to protect and create jobs? A UK-wide scheme could protect a great many small industries, including the pub industry.

[Mr Hammond]

The hon. Gentleman will know that we have the start-up loan scheme, which provides support for entrepreneurs starting small businesses, and the Government will continue to encourage small businesses to be established and then to grow.

[Mohammad Yasin (Bedford) (Lab)]

3. What recent discussions he has had with the Secretary of State for Health and Social Care on NHS funding.

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[Robert Halfon (Harlow) (Con)]

9. What assessment he has made of the effect of the fuel duty freeze on household incomes.

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

To support British households, the Government have frozen fuel duty for eight successive years. By April 2019, these freezes will have saved the average car driver £850 compared with the pre-2010 escalator, and the average van driver over £2,100, but it is important that we remember the other side of this coin. The fuel duty freezes since 2011 have meant that the Exchequer has forgone around £46 billion in revenues through to 2018-19, and a further £38 billion will be forgone over the Budget forecast period, as a result of these previously announced freezes. For context, that is about twice as much as we spend on all NHS nurses and doctors each year.

[Robert Halfon]

A Treasury study in 2014 said that freezing fuel duty benefits the economy to offset almost all the loss of tax to the economy, and it said that GDP would increase by £4.5 to £7.5 billion over the forthcoming years. Given the rise in petrol by 13p and diesel by 15p over the past year, does he agree with his own Treasury report that maintaining the fuel duty freeze would benefit the economy and help hard-working people in our country?

[Mr Hammond]

The analysis that my right hon. Friend refers to is from 2014, and obviously that analysis would have to be looked at again in the context of the economy today. I do understand that the way the rise in oil prices has had feed-through to the pump represents a real pressure for motorists, and we will take it into account.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Chancellor will know that the freeze on fuel duty is only a sticking plaster and cannot go on forever. One way of cutting down on emissions is electric cars, but in my constituency there is not a single electric car charging point. Will he commit to investing in more electric charging points across the country?

[Mr Hammond]

I don’t know about forever, but it has gone on for eight years, as I have just explained to the House. The hon. Gentleman is right: the car fleet has to electrify if we are going to meet our carbon emissions targets. We set up a £400 million fund in the last Budget to support the roll-out of electric charging infrastructure, which is clearly critical for us to meet those targets.

[Rachel Maclean (Redditch) (Con)]

One of the other major impacts on the wages of the lowest-paid is a national living wage. Does my right hon. Friend agree that it is our reforms as a Government that have boosted the incomes of the lowest-paid significantly?

[Mr Hammond]

Of course. We have sought, despite the very difficult fiscal circumstances, to address drivers of cost for households, for example by freezing fuel duty and alcohol duty. On the other side of the equation, we have reduced the tax that people are paying on their wages and raised the earning of those on the lowest wages by introducing and then increasing the national living wage.

[Jim Shannon (Strangford) (DUP)]

Despite the freeze in fuel duty, diesel is currently at £1.33 a litre. Rural communities in particular are finding it very difficult. Will the Chancellor indicate the help he can give to rural communities that are dependent on their vehicles to get to work and have a life?

[Mr Hammond]

Many people are dependent on vehicles for everyday living and for work. As I have already said, we understand the pressure that higher oil prices and their feed-through to the pumps presents for individual consumers. We take all such matters into account when setting future policy.

[Mr Speaker]

I hope the House will join me in welcoming the hon. Member for East Dunbartonshire (Jo Swinson) back from her maternity leave.

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[Paul Blomfield (Sheffield Central) (Lab)]

13. What assessment he has made of recent trends in the level of wage growth and inflation.

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

Today’s data show regular wages growing at the fastest rate for three years. The Office for Budget Responsibility forecast that wages will continue to grow, reaching 3.5% by 2021, while consumer prices index inflation will continue to fall, reaching the target of 2% by the end of this year. That is welcome news for everybody. Nevertheless, the Government recognise the pressure on household budgets, which is why we introduced the national living wage, delivering a 7% pay rise in real terms for the lowest, paid from April 2015 to April 2017. It is why we raised income tax thresholds, saving the average taxpayer more than £1,000 this year and, at the last Budget, froze fuel and alcohol duties for a further year.

[Imran Hussain]

Under the current business rates system, city centre-based businesses are paying more in rates than large out-of-town-based warehouses, severely restricting the amount that they can put towards wages and hampering wage growth for employees. Will the Chancellor today commit to reforming this outdated business rates system so that businesses are able to pay their staff higher wages while boosting our high street economy?

[Mr Hammond]

I have already acknowledged the pressure that the high street is under, and it is certainly something that the Government are extremely concerned about. I do not think that we can hold back the tide of changing consumer behaviour, but it is certainly right that we seek to facilitate high streets as they evolve. I remember, when I came into this House 21 years ago, that there was a similar angst among our electorates about the growth of out-of-town supermarkets and the impact that that was having on high streets. High streets evolved and survived and, in many cases, prospered. Now they are facing another challenge and we must help them again to rise and meet it.

[Paul Blomfield]

Sheffield city region has the lowest hourly pay of any city region, at £1.15 below the national average. A real living wage, action on zero-hours contracts and tougher labour market regulation would transform the lives of hard-pressed working people across South Yorkshire. When will the Government recognise that and do something?

[Mr Hammond]

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

[Nicky Morgan (Loughborough) (Con)]

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

[Mr Speaker]

Not least because he will have important views about wage growth and inflation.

[Mr Hammond]

I know that he does have such views, Mr Speaker. As my right hon. Friend asked—and I know that her Committee questioned the Governor on this subject last week—I can now announce to the House that I have been discussing with the Governor his ability to serve a little longer in post in order to ensure continuity through what could be quite a turbulent period for our economy in the early summer of 2019. I can tell the House today that the Governor has agreed, despite various personal pressures to conclude his term in June, that he will continue until the end of January 2020 in order to help to support continuity in our economy during this period.

[Robert Courts (Witney) (Con)]

Will the Chancellor please confirm that the income of the lowest-paid has grown more than twice as fast as the income of the very highest over recent years?

[Mr Hammond]

Yes, thanks to this Government’s introduction of the national living wage.

[Rebecca Pow (Taunton Deane) (Con)]

14. What steps the Government are taking to ensure that the UK remains at the forefront of green finance.

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[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

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. This Government will continue to take a 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 investing in the future of this country and getting debt down to cut interest costs and deliver fairness to the next generation.

[Stephen Metcalfe]

South Essex has the potential to play a huge part in delivering on those aspirations, as I and some of my Essex colleagues saw last Friday as we took a Clipper journey from Purfleet out to Southend and back. It was an extraordinary experience. May I therefore invite the Chancellor to come and join us and see the part that south Essex can play in making Britain great again?

[Mr Hammond]

I think it comes back to the same point: it depends if my hon. Friend is buying.

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

There are only weeks to go now before a deal has to be agreed with our European partners, but there are still mixed messages coming from Government Ministers. The Foreign Secretary says that crashing out of the EU without a deal would be a

“mistake we would regret for generations”,

the Brexit Secretary says that no deal would bring “countervailing opportunities”, and the Prime Minister says that it

“wouldn’t be the end of the world.”

The Chancellor has a critical role to play in bringing some rationality to this debate. The Treasury has calculated that no deal could result in the UK’s GDP being over 10% smaller. Will he outline, and be absolutely clear to some of his colleagues, what that would mean for jobs, wages, investment and living standards?

[Mr Hammond]

There is no ambiguity at all about the Government’s objective. We want to strike a deal with the European Union based on the White Paper that we have published, which we believe will be good for Britain and good for the European Union. We are devoting all our efforts over the coming weeks and months to securing that deal and protecting the British economy.

[John McDonnell]

The problem is that time is running out, and increasingly people on all sides of this issue are feeling let down, so let me put this to the Chancellor: can we both try to get the message across to the Prime Minister, who continues to insist that no deal is better than—[Interruption.] She continues to insist that a bad deal is better than—[Interruption.] I will negotiate that again, Mr Speaker. She continues to insist that a bad deal is better than no deal. Business organisations are clear. The CBI is warning of a “catastrophe”, the National Farmers Union says it would be “an Armageddon scenario”, and, according to the TUC, a no deal Brexit would be “devastating for working people”. So may I appeal to the Chancellor? He knows the consequences of a no deal scenario, so will he now show some leadership and make it clear to his colleagues that he will not accept it?

[Mr Hammond]

First, I would love to know what it actually said on the right hon. Gentleman’s bit of paper. Let me be very clear to him. I, the Prime Minister and all members of the Cabinet are committed to achieving a deal that protects British jobs, British businesses and British prosperity going forward. That is what we are committed to. He is absolutely right that time is running out. We are working against the clock; we understand that. We will be working flat out over the coming weeks and months to achieve that.

[Scott Mann (North Cornwall) (Con)]

T5. The Treasury will be well aware of the passion that my residents in North Cornwall feel about the scourge of marine plastics. After the record response to the Treasury’s consultation on single-use plastics, can the Chancellor say how far he is prepared to go in the Budget?

[Mr Hammond]

First, I recognise my hon. Friend’s long-standing commitment to this cause and the role that his constituency has played in bringing to people’s attention the catastrophe going on with plastics in our oceans. We want to be the first generation that leaves the environment in a better state than we found it, and tackling the scourge of plastic waste is a clear priority to support that. As he said, the response to the call for evidence represents the level of public concern. I want to be clear that we are committed to acting to tackle plastic waste and to using tax alongside other tools to change behaviour. I am working closely with my right hon. Friend the Secretary of State for the Department for Environment, Food and Rural Affairs, and I will bring forward further proposals in the Budget.

[Wes Streeting (Ilford North) (Lab)]

T2. London’s Mayor Sadiq Khan is investing in frontline policing, but like police and crime commissioners across the country, he is swimming against the tide of deep Government cuts, which is why violent crime in the last three years has doubled in Essex, in Cambridgeshire, in Warwickshire, in Hampshire and in Norfolk—the Tory shires. Is it not time for the Government to accept that they need to refocus on cutting crime, not police, particularly in the light of the damning report from the National Audit Office today?

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[Antoinette Sandbach (Eddisbury) (Con)]

T9. When this Government were first elected in 2010, their defining mission was to fix the deficit. Will the Chancellor update us on what progress has been made and how that has benefited my constituents in the north-west?

[Mr Philip Hammond]

In 2010, the Government inherited the largest Budget deficit since the second world war, at 9.9% of GDP. Our balanced approach to fiscal policy means that we have significantly reduced the deficit by over four fifths, to 1.9% of GDP last year. That has had benefits for all our constituencies, as the economy has continued to grow. My hon. Friend’s constituents will have seen that benefit: in the north-west, more than 268,000 more people are in employment over that period, and there are 93,000 more businesses.

[Toby Perkins (Chesterfield) (Lab)]

T4. Anyone who attended the Unison briefing this morning will know how worried local authority workers are about the impact of austerity on the services that they provide. Can the Chancellor reassure them that they will see in his next Budget a level of money that means we do not see many more authorities facing the catastrophe that Northamptonshire has had and that we have all witnessed this year?

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

T8. In response to a recent written parliamentary question, the Secretary of State for International Development confirmed that she paid her Department’s cleaners the living wage—the London living wage. Sadly, when I asked the same question of the Treasury, the response was that Her Majesty’s Treasury “does not hold” the information. Will the Chancellor take this opportunity to clarify why he and other Front Benchers do not know how much the cleaners who clean their desks every day are paid, and will he promise to introduce the London living wage not just in the Treasury but for every single cleaner who works in Whitehall?

[Mr Philip Hammond]

I imagine the reason is that the provision of these services is contracted out, but I will investigate and write to the hon. Lady.

[Alberto Costa (South Leicestershire) (Con)]

The Chancellor can rightly take pride in his policies which result in South Leicestershire having one of the highest employment rates in Britain. On Friday, I am meeting local businesses in Lutterworth, where Councillor Neil Bannister, leader of Harborough District Council, will be hosting a “Meet your MP” session with local businesses. What other positive messages does the Chancellor have for local businesses in Lutterworth and South Leicestershire?

[Mr Hammond]

In areas of the country like the one my hon. Friend mentions, we have seen a resurgence of the entrepreneurial spirit since the financial crisis, with high levels of employment and good levels of wages. Now we need to see businesses being prepared to invest and innovate to grow productivity so that we can carry on seeing wages rising to create the sustainable high-wage economy that we all want to see.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Starving the NHS of finance has led to South Tyneside Hospital being forced into an unpopular merger with Sunderland Hospital. Not only is South Tyneside Hospital losing key services, but staff are at risk of being placed into a private, wholly owned subsidiary where their terms and conditions are under threat. Cuts forcing back-door privatisation are either a deliberate design of the Government’s plans for the NHS, or incompetent financial management. Which one is it?

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[Tom Pursglove (Corby) (Con)]

Corby and East Northamptonshire are seeing considerable housing growth, and it is essential that the infrastructure keeps pace, so will my right hon. Friend consider a new round of enterprise zone bidding opportunities to support more growth and jobs?

[Mr Philip Hammond]

I think I will treat my hon. Friend’s comments as a Budget submission.

[Several hon. Members rose—]

[Mr Dennis Skinner (Bolsover) (Lab)]

For the past hour, we have heard everyone on the Treasury Bench spouting about this wonderful situation that they are in, with money to burn. Why then has Tory-controlled Derbyshire County Council’s first decision been to close 20 libraries and cut the hours of every librarian in the county? What is the Chancellor doing to stop it?

[Mr Hammond]

I suggest that the hon. Gentleman either has a hearing test or relies on the Hansard of this session, because he has misheard what we have been saying today.

[Kirstene Hair (Angus) (Con)]

Region deals are an excellent example of Scotland’s two Governments working together to make it a better place in which to live and work. Will my right hon. Friend outline the progress she has made with the Scottish Government to ensure that constituencies such as Angus benefit as much as cities?

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[Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

Next year, we move into a post-Brexit economy with new global trading opportunities for UK economic growth. Will the Chancellor update the House on his commitment to investing further in the Royal Navy, which is a vital tool for maintaining safe seas and oceans, so that trade coming out of north-east and other ports can be sustained and can underwrite economic growth?

[Mr Philip Hammond]

I certainly agree with my hon. Friend that the Royal Navy is vital to the defence of Britain’s interests around the world, and in peacetime it is the principal way in which we can project our power and military influence around the world. We are waiting for the conclusion of the modernising defence review that is being undertaken by the Defence Secretary with the Cabinet Office. Once we have received that, we will be able to work with the Ministry of Defence to find a way forward out of the very considerable budgetary challenges that that Ministry faces.

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

In March, the Government postponed the closure of the childcare voucher scheme to new entrants to 4 October, during the forthcoming parliamentary recess, reflecting concerns about its impact on low-income families in particular. With the closure now imminent, what work have the Government done to assess the impact on low-income families?