Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Tuesday 5th March 2019 Commons Chamber

[Vicky Ford (Chelmsford) (Con)]

15. What fiscal steps he is taking to establish the UK as a world leader in new technologies.

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

The Government are determined to ensure that the UK is at the forefront of the development of new technologies. Since 2016, I have committed £7 billion more—a 20% uplift —for research and development, thus demonstrating clear progress towards the Government’s ambition to raise investment in R&D to 2.4% of GDP by 2027. Among other things, those funds are supporting a £305 million national quantum technology programme and a £950 million artificial intelligence sector deal, and there is £250 million for connected and autonomous vehicles.

[Trudy Harrison]

Small modular reactors could bring a wealth of economic, environmental and social benefits. Will the Chancellor confirm that he supports their merits, and that there will be financial and policy support to ensure that they succeed?

[Mr Hammond]

The Government do indeed recognise the potential for the UK to become a leader in the development of the next generation of nuclear technologies, provided that there is demonstrable value for money for consumers and taxpayers. To that end, my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is considering an industrial strategy challenge fund proposal for small modular reactors and whether it would provide value for money.

[Eddie Hughes]

I do not know whether you are aware, Mr Speaker, that up to 50 different metals may be used in a smartphone. What fiscal support could be given to the excellent work done by Birmingham University in addressing the rareness of those materials, as well as the recycling and reuse of batteries?

[Mr Hammond]

My hon. Friend is right. Rare earths and other critical elements are at the centre of the electronics industry, which now defines our modern life. Some of the materials are very scarce, and recycling the large amounts that are already in use in batteries is crucial. In the 2017 spring Budget I announced the £246 million Faraday battery challenge, to be funded from the national productivity investment fund. Supported by the fund, the University of Birmingham, together with industry partners, is leading the way in developing new methods of recycling lithium batteries, which power so many of the objects that we use in our everyday lives.

[Vicky Ford]

Quantum technology is one of the most mission-critical technologies being developed today, and so far much of the work has been done at research level. How do the Government intend to help leading British companies such as Teledyne e2v in Chelmsford to commercialise this activity, to ensure that quantum technology remains based in the UK?

[Mr Hammond]

I knew Chelmsford was going to get in there somewhere.

The additional £7 billion I mentioned earlier is focused on applied research and industry innovation and the commercialisation of the UK’s world-leading science base. Quantum technologies have the potential to be transformative, and the UK is a global leader, so last autumn I committed £315 million for a second phase of the UK’s landmark national quantum technology programme. This investment includes a £70 million industrial strategy challenge fund, which will help leading UK firms such as Teledyne accelerate getting their products to the market.

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

The Chancellor knows very well that Huddersfield in the Leeds city region is a hotspot for new technology and innovation and a tech centre, but many people in Huddersfield and Leeds are demoralised by the future and leaving the European Union. What can the Chancellor do to give them some hope that there is a future for their businesses and universities?

[Mr Hammond]

I am well aware that Huddersfield, like Chelmsford, is a leading centre of industry and technology development. Many of our towns and cities that have traditionally been centres of manufacturing are changing very fast in response to the changing nature of manufacturing industry. What I can say to the hon. Gentleman is that I will be making a spring statement to the House next week in the context of some very important decisions that the House will be making about our exit from the EU, and I will be setting out my vision for Britain’s future.

[Melanie Onn (Great Grimsby) (Lab)]

Renewables is a key future technology sector. Can the Chancellor assure the House that the growth of the offshore sector will not be limited by Government airspace protection rules, or, if it will, will the Government look to invest instead in onshore wind?

[Mr Hammond]

I think the hon. Lady is talking about radar interference problems with wind turbines, something I remember from my Ministry of Defence days. The Treasury and the Department for Business, Energy and Industrial Strategy will always argue robustly for protecting the economic potential of these technologies, but of course we have to look at our national security interests as well and get the balance right.

[Mr Chris Leslie (Nottingham East) (Ind)]

How on earth do people think that we are going to be improving the UK’s new technology position when we are on the brink in this House of committing to a disastrous Brexit that will undermine our research funding, stifle our skilled migration, hobble in some ways some of the developments in our pharmaceuticals and biotech sector, and wave goodbye to the European Medicines Agency? Is not the truth that actually our task is going to be to prevent a deterioration in our prospects as a country if we go down that route?

[Mr Hammond]

I understand the hon. Gentleman’s point and I know he speaks sincerely and from the heart on these matters, but my view is that we have a huge amount of pent-up investment that has not gone ahead over the last two and a half years because of uncertainty. Once we can provide clarity to British business about our future, which we do by supporting the deal that my right hon. Friend the Prime Minister will be bringing forward next week, we will unleash that investment, allowing Britain to achieve its rightful potential as one of the world’s leading technology powers.

[Paul Scully (Sutton and Cheam) (Con)]

18. New technologies enabling us to work from anywhere and at any time are bringing an end to the traditional, rapidly declining nine-to-five. To make the most of this, we need to harness such advantages to work smarter rather than just harder. How is the Treasury investing in enabling people to become more productive and to work more flexibly?

[Mr Hammond]

I started work in 1977 and I am not sure I ever remember that traditional nine-to-five, but the Government are helping people to be more productive and work flexibly by committing over £1 billion of public money to next-generation digital infrastructure, including full fibre broadband and 5G. Obviously, the primary investment will come from the private sector, but the public investment ensures that those parts of the country that would not otherwise be served because they are not commercial can share in this important technology. We are also supporting workplace productivity in other ways, including by investing £56 million to help small businesses to develop leadership and management skills in partnership with “be the business” programme.

[Clive Lewis (Norwich South) (Lab)]

I am sorry, but when it comes to funding the new technologies that really matter, this Government, and especially the Treasury, have been abysmal. The climate crisis is upon us now, but this Government’s reaction has been to axe carbon capture and storage funding; to cancel the Swansea lagoon, despite the fact that we were poised to be a world leader in tidal technology; and to slap innovative emerging storage technologies with business rates. At the same time, they are throwing billions into new tax breaks for oil and gas. Does the Chancellor agree that this Government are not facing the climate emergency but creating it?

[Mr Hammond]

No, we are committing additional funding to innovation and to research and development—the Faraday battery challenge is a good example—and lots of that money is going into the technologies that will underpin the decarbonisation of our economy. However, we have to get the balance right. Consumers of energy in this country do not want to see their bills rising because we have made imprudent decisions. We have to do this in a way that takes public opinion with us as we decarbonise our energy sector, our homes and our industry in a sustainable way.

[Chris Green (Bolton West) (Con)]

20. What is my right hon. Friend doing to ensure that small and medium-sized businesses in the north-west of England are at the forefront of our ongoing technological revolution?

[Mr Hammond]

I recently visited the north-west of England and saw at first hand the enterprising and enthusiastic spirit of SMEs in the region. I am happy to confirm that, in the 2018 Budget, I backed locally led innovation by doubling the strength in places fund to £235 million. I also committed an additional £5 million to encourage proposals for new university enterprise zones, following a successful pilot scheme that invested £15 million in Liverpool. The made smarter pilot in the north-west is helping manufacturers to adopt digital technologies, and together these measures will ensure that businesses in the north-west can take the lead in the fourth industrial revolution.

[David Linden (Glasgow East) (SNP)]

4. Whether his Department has undertaken an economic impact assessment of extending the national living wage to people under the age of 25.

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

6. What steps he is taking to increase the level of funding for road infrastructure.

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

At the Budget, I announced an extra £420 million for road maintenance, including potholes, and £150 million to ease congestion on local roads. I also announced that, from 2020, all road tax will be invested back into our road network via a national roads fund, which will involve £28.8 billion between 2020 and 2025, including a record £25.3 billion for our strategic roads. That is part of our plan to upgrade our infrastructure so that it is fit for the future and another element of our overall public investment, which is set to reach the highest sustained level for 40 years.

[Gordon Henderson]

I am grateful for that answer and for the continued investment in our roads, but does my right hon. Friend understand the frustration felt by my constituents, who have seen their area transformed by massive housing developments, but have not seen improvements to the local road infrastructure, particularly the A249 and the M2, to serve the new homes?

[Mr Hammond]

We are making good progress on improving junction 5 of the M2 and the A249 Stockbury roundabout, reducing journey times, making journeys safer and supporting future housing and employment growth. All that is in addition to recent investments from the local growth fund in Sittingbourne and Sheppey, including the opening of a new roundabout on the A2500 in December 2018, following a £1.26 million investment, and £2.5 million for the regeneration of Sittingbourne town centre.

[Dan Jarvis (Barnsley Central) (Lab)]

Funding for road infrastructure is very important, but I wonder whether the Chancellor thinks it should sit alongside investment in more active travel—walking and cycling.

[Mr Hammond]

Both. Of course we want to encourage active travel—cycling and walking—particularly in cities where that is the most appropriate response to dealing with the twin challenges of congestion and air quality. Sheffield has benefited from funding that will allow it to enhance the offer to walkers and cyclists.

[Priti Patel (Witham) (Con)]

Over the last decade, we have seen a 25% increase in the number of enterprises in the fantastic county of Essex. That is despite our crumbling infrastructure and our roads. May I make an urgent plea to the Chancellor to support and invest in the two economic arteries that go through the heart of Essex and the Witham constituency—the A12 and the A120?

[Mr Hammond]

This is probably not the first time that my right hon. Friend has asked me about those two roads. She is a formidable champion of the transport infrastructure that runs through her constituency; I congratulate her on that. As I have just announced, we have made a commitment to hypothecate all road tax to the national roads fund. That will make a record amount of funding available for road projects in the next period.

[Chris Bryant (Rhondda) (Lab)]

Road traffic accidents are a major cause of acquired brain injury, so I urge the Chancellor of the Exchequer to consider setting up a special fund, in proportion to the amount that he is talking about for road infrastructure—and announce it next week, if he is still going to do his statement next Wednesday—to make sure that there is a fund available to people in the national health service who are developing very innovative ways of rehabilitating people who have had road traffic accidents. If he does not understand, he can ask his hon. Friend the Economic Secretary to the Treasury, who is very good on that.

[Mr Hammond]

I reassure the hon. Gentleman that I will be making a spring statement next week and remind him and the House that it is not a fiscal event under the new Budget architecture. We have put very significant additional funding into the national health service. I note the point he makes about acquired brain injury and the research that is happening on that. I will draw the Health Secretary’s attention to his comments.

[Philip Davies (Shipley) (Con)]

The Chancellor has rightly made great play of the fact that we need to improve our productivity in this country. One of the biggest drags on productivity in my part of the world is clogged-up roads, and my part of West Yorkshire is one of the most congested parts of the UK. So will the Chancellor use money from either his productivity fund or his road-building fund to ensure that there is enough money in the kitty to progress the long-awaited, much-needed Shipley eastern bypass?

[Mr Hammond]

As my hon. Friend will know, we have funded a study into the Shipley bypass. It is absolutely right that, often, the highest-value road investments can be relatively modest local schemes that relieve pressure and allow town regeneration, the release of housing land and the more efficient operation of local industry. We will have a record-sized fund available through the hypothecation of vehicle excise duty.

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

We are acting to tackle single-use plastic waste at source by introducing a world-leading tax on plastic packaging. The tax, which I announced at the Budget, will provide a clear economic incentive to business to use recycled plastic and, alongside the reform of the plastic producer responsibility system by the Department for Environment, Food and Rural Affairs, it will transform the economics of sustainable packaging. The Government recently published consultations on the detail of both measures, alongside consultations on consistent waste collection and a potential deposit return scheme for beverage containers. We are determined to be the first Government who leave the environment in a better state than they found it in.

[Mark Pawsey]

I hear what the Chancellor is saying, but in setting policy will he recognise the positive role that plastic packaging plays in reducing cost to consumers by protecting goods in transit and in reducing the environmental burden of food waste by keeping food fresher for longer?

[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.

[Peter Dowd (Bootle) (Lab)]

I am pleased that the Chancellor is, apparently, taking the issue of plastic waste seriously. The Government have committed £61.4 million to global research to help to prevent plastic waste from entering the oceans. Given the challenge, is that sufficient?

[Mr Hammond]

It is a good start. The idea is to identify ways in which we can work with countries around the world, including many of our overseas territories, which are particularly vulnerable to this issue, to ensure that we develop effective methods of avoiding plastic waste entering the ocean. Of course the best way to do that is by ensuring that plastics are not created in the first place, or that they are effectively recycled, but avoiding dumping at sea is our No. 1 priority.

[Peter Dowd]

Talking of preventing waste, what with the millions wasted on the ferries fiasco, the drone debacle, the Northern rail mess, the Carillion collapse, the electronic tagging turmoil, the £2 billion East Coast chaos and, finally, £72,000 spent on defending an illegal prisoner book ban, is it not time for the Chancellor, as the custodian of the public finances, to impose a ban on the failing Secretary of State for Transport wasting any more public dosh?

[Mr Hammond]

I am not going to take any lectures about waste from anybody on the Opposition Front Bench. This lot are world-champion wasters of public money. They have done it before and given half a chance they will do it again.

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

9. What steps he is taking to allocate funding for infrastructure in (a) Medway and (b) Kent.

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[Stephen Kinnock (Aberavon) (Lab)]

T1. Topical 1.

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

I have a sense that by the time I have responded, inspiration will have struck the hon. Gentleman.

My principal responsibility is to ensure economic stability and the continued prosperity of this country. At this juncture, the best way to achieve that objective is to support a negotiated Brexit ensuring a smooth and orderly departure from the EU through a transition period to a new relationship that allows our mutual trade to continue to flourish.

[Stephen Kinnock]

Since the introduction of the minimum wage, only 14 employers have been prosecuted by HMRC for failing to pay the minimum wage. Does the Chancellor agree that that is a completely unacceptable state of affairs? What action is he taking to boost the capacity of HMRC to go after those who are not paying the minimum wage?

[Mr Hammond]

HMRC does take action against errant employers. It is always pleased to receive information on suspected non-compliance and will investigate any such cases. I am sorry that the hon. Gentleman had difficulty thinking of a question. Anticipating this situation, I have at least four or five potential questions that he could have asked me, and I am happy to show them to him afterwards.

[Mr Speaker]

Colleagues, on a discretionary basis I am changing the order, but, believe me, I know why I am changing the order and there is a compelling reason in this instance for doing so.

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[John McDonnell]

I can understand why the Chancellor has broken convention today in not responding, because I think he would be ashamed to respond. Let me tell him what the answer is: if a DUP vote is worth £100 million, what Labour MPs were offered yesterday was £6 million.

Let me ask the Chancellor to undertake another calculation. Seven days ago, he was forced to publish the Government’s assessment, again, of how much a no-deal Brexit would cost this country—in today’s prices, nearly £200 billion. How much of a threatened cost to this country will it take for this Chancellor to find a backbone to stand up to the Prime Minister and the European Research Group to prevent no deal or a bad deal? Or is the Secretary of State for Work and Pensions the only Cabinet Minister willing to put country before career?

[Mr Philip Hammond]

Oh dear, oh dear. As the right hon. Gentleman knows very well, I have been working tirelessly to ensure that we avoid a no-deal exit—that we leave the European Union in a smooth and orderly fashion to a new negotiated partnership that allows our complex and important trade relationships to continue to flourish in the future. That is what I spend every working day doing.

[Scott Mann (North Cornwall) (Con)]

T2. The Chancellor briefly mentioned the spring statement. Can he update the House on his plans for the spring statement on 13 March?

[Mr Hammond]

As my hon. Friend is aware, because I have said it already this afternoon, the spring statement is not a fiscal event, but I will update the House on the Office for Budget Responsibility’s forecasts for the UK economy and for the public finances. I will follow the approach that I took at spring statement 2018 and also provide the House with an update on progress since the 2018 Budget and set out our intended direction for announcements later in the year. Although it is not a fiscal event, I already anticipate my hon. Friend beating a path to my door before the Budget in the autumn.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

T3. Schools in my constituency face severe budget pressures running into millions. By 2021, some schools will not be able to afford any teaching assistants, learning support assistants, office staff or site staff. Does the Chancellor realise the perilous state of schools’ finances, and will he announce adequate funding for schools in his spring statement next week?

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

T4. Does the Chancellor agree that the £1.6 billion set aside for towns is a pale imitation of the regional growth fund set up under the coalition? Will he look at establishing a Brexit redundancy fund of up to £7.5 billion, to help the 750,000 people who are estimated to lose their jobs in a no-deal scenario?

[Mr Philip Hammond]

As I have told the House many times—I will elaborate more at the spring statement next week—in what I now think is the unlikely event of a no-deal exit, the Government have both fiscal and monetary tools available to them to support the economy. Of course, the likely shock would be on the supply side of the economy, and we would have to be careful that fiscal interventions did not merely stimulate inflation. If we are to find ourselves in that situation, we have the firepower and the clear intent to intervene to support the economy.

[Nigel Huddleston (Mid Worcestershire) (Con)]

T6. I am sure that all those on the Treasury Bench agree that it is a really important responsibility of the Government to ensure that our children and young people can achieve their full potential. With that in mind, can my right hon. Friend assure me that skills and education funding will receive the priority attention it deserves in the upcoming spending round?

[[R] Dan Jarvis (Barnsley Central) (Lab)]

T9. Given the urgent need for clarity on post-Brexit regional funding, when do the Government intend to launch the consultation on the UK shared prosperity fund?

[Mr Philip Hammond]

We regard the UK shared prosperity fund as very important, and we will launch a consultation this year on plans for the fund.

[Charlie Elphicke (Dover) (Con)]

T7. Will the Chancellor tell the House how many people in my Dover and Deal constituency, since 2010, are either paying no income tax whatsoever, thanks to Government policies, or have seen an income tax cut? While he is about it, could he put that in a spreadsheet for every single constituency so that the whole House can see what has been done?

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[Mr Philip Hammond]

I am not in a position to comment on private conversations that the hon. Gentleman may have had with my right hon. Friend the Environment Secretary, but I can tell him that I agree with everything my right hon. Friend has said at this Dispatch Box.

[Henry Smith (Crawley) (Con)]

T10.   What assessment has the Treasury made of the impact of air passenger duty on regional and short-haul airlines?

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[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Chancellor has claimed that the best way to protect the public finances from a decline in the motor industry post-Brexit is to back the PM’s deal. The Society of Motor Manufacturers and Traders says the best way is for the Prime Minister to abandon her red lines and be part of a customs union. Who is right?

[Mr Philip Hammond]

As the Prime Minister has explained to the House many times, the deal that we have negotiated with the European Union provides for most of the benefits of a customs union, while still enabling the United Kingdom in certain circumstances to be able to strike trade deals with third countries. That is a win-win outcome, and the House should get behind it.

[James Cartlidge (South Suffolk) (Con)]

Is it the intention that we will be publishing our draft tariff schedule in the event of no deal before the meaningful vote?

[Mr Hammond]

I cannot give my hon. Friend a clear answer on a specific date, but soon as we are in a position to publish the tariff schedule, we will do so.

[John Cryer (Leyton and Wanstead) (Lab)]

Personal debt is now higher than it has ever been in British history. Household debt is now also higher than it has ever been and has increased by nearly £1,000 in the past year alone. How sustainable is that?