Oral Answers to Questions

Peter Dowd Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Elizabeth Truss]

We are currently considering those responses carefully, and we will publish them shortly.

[Peter Dowd (Bootle) (Lab)]

Eight failed years of austerity have meant poor levels of funding for local government. In fact, today the Local Government Association reports that, by 2020, councils will have had £16 billion of funding cuts. With low pay, woeful productivity, tenuous job security, stubborn inflation, rising national debt, a huge deficit, a sinking pound, creaking public services, decaying infrastructure and chaotic railways, what other wheezes does the Chief Secretary have up her sleeve to wreck the economy further?

[Elizabeth Truss]

We are building. We saw a record number of new businesses started last year. We have record levels of employment across our economy. We have brilliant Conservative Mayors, like Andy Street and Ben Houchen, who are attracting new businesses to their areas and redesigning their port infrastructure, whereas Labour councils across the country are doing things like closing down Airbnb, trying to stop Uber and trying to stop progress.

[Peter Dowd]

Yes, that told me. It gets worse, if that were possible. This year, business investment growth is slowing, annual export growth is slowing, service sector growth is slowing and economic growth is slowing. With Brexit looming and punch-ups in the Cabinet, should the nation’s economic future really rest in the hands of a go-slow Government?

Business Rates

Peter Dowd Excerpts

Wednesday 13th June 2018 Westminster Hall

[Peter Dowd (Bootle) (Lab)]

It is a pleasure to serve under your stewardship, Mr Gray.

I thank my hon. Friend the Member for York Central (Rachael Maskell) for securing this debate. It is important to put the issue of business rates into context with regard to the amount of money they raise in receipts. In 2018-19, the rates will raise £30.5 billion, the sixth highest tax receipt in the country. That is a substantial amount of money. We need to look at the business rates again, and in context.

I am pleased that my hon. Friend mentioned the turmoil on the high street, although that is not equal across the country—in some places, there is even more turmoil than in others. Nevertheless, the general tone is one of turmoil, with 10,000 stores to close, including the casework examples she alluded to. The prevarication needs to stop, and I am pleased that my hon. Friend gave us four ideas to consider.

The right hon. Member for East Devon (Sir Hugo Swire) made a point about the Valuation Office Agency. It is important that the VOA plays a part in this but, in reality, as an agency it can only play the hand it has been dealt. Yes, it may be able to sharpen up its footwork, but that does not go to the heart of the matter. However, I do see his point about the concoction of planning and parking—he raised several issues there. On parking, as local authorities have been denuded of support from central Government, they have tended to change how they get their money, given the reduction in grant. They’re damned if they do and damned if they don’t.

My hon. Friend the Member for Sheffield South East (Mr Betts) talked about more local control. That is a potential way forward, because as we are giving less money to local authorities from the revenue support grant, there has to be some more flexibility. That should be considered as part of the review. As the hon. Member for St Ives (Derek Thomas) said, it is a complex situation. Second homes is an issue that affects different areas of the country in different ways. He talked about the business rate calculation not being sensible, but that is a technicality. Trying to pin down how a valuation is arrived at does not deal with the heart of the issue: if £30 billion is being raised a year, how and where should it be raised and in what context? We need a review of business rates. My hon. Friend the Member for High Peak (Ruth George) said that there are strains on businesses. Her point about cash machines is a crucial issue in many areas. I am glad that it has been a thoughtful debate.

Business rates are causing a great deal of crisis in our retail sector, which is the UK’s largest private sector employer. In the first few months of this year, 21,000 jobs were lost due to closures. Thousands of working people face an uncertain future, and that has sent ripples through the retail sector. Only this week, Poundworld fell into administration, putting 5,000 jobs at risk. That follows administration or store closures at Maplin, Toys R Us, House of Fraser, Marks & Spencer, New Look, Carpetright and Mothercare.

The Government must recognise that there is barely a British brand left that is not affected by what many consider to be a hostile environment, given the business rates situation, whether by design or default. The high street is being denuded because the review has gone on and on. The Government have taken their eye off the ball. I do not want to introduce the “B” word, but Brexit must be a factor. Everything is dominated by Brexit, so the crucial day-to-day issues are not being picked up as they would and should be.

The independent retail analyst Richard Hyman predicts that 20% of retail space will close over the coming years. My hon. Friend the Member for Sheffield South East alluded to that and we must give thought to it—that is before we even get on to poor pay and faltering productivity, both of which are driving poor consumption across the economy, as well as leading to pretty miserable lives for so many in precarious work. Why is this happening? Last week, the chief executive of Tesco blamed the collapse of these retailers on the Government’s business rates policy, saying that it played a “large part” in sending some retailers to the wall.

The Government’s approach to business rates has been combined with, in effect, inaction, which has left a significant portion of the British economy exposed. There has been one review after another; there is nothing wrong with a review and we are quite happy to have them, but we would have to not let the review drift but taken action, as I am sure you would, Mr Gray. Uncertainty does not help.

The problem has been exacerbated by structural changes in the retail sector. For example, 791 villages and towns in England and Wales will face higher tax bills. Rates are rising by up to 500% for half a million businesses. That cannot be right. The rise will cause the average small shop to be hit by an extra £3,600 in rates over the next five years. Nearly three quarters of small companies say business rates are the most important issue they face. What is worse, at the same time, some large supermarkets’ rateable value has reduced by nearly 6%.

Online retailers, which have been referred to many times, have benefited from the structural shifts in retail and are the also winners of the Government’s business rate changes. The bill of online retailer ASOS fell from £1.17 million to £1.14 million, despite UK sales growth. The Government are in a business rates mess—it is no good pretending that they are not. The mess is hitting those who cannot bear the brunt of the tax changes, while letting others off the hook.

The Government will claim that they are introducing a package of support to mitigate the steep increases that have resulted from the seven-year wait for a revaluation, yet the Federation of Small Businesses does not take the same rosy view. They have called on the Government to

“speed up help for small firms facing unacceptable increases in their Business Rates”,

while arguing that the £300 million relief promised in the Budget has not made its way to businesses. Perhaps the Minister will let us know what the hold-up is. It is the same old story: we cannot rely on rhetoric to cover things up. The Government have to recognise that the cracks are getting bigger. In some areas, panic has set in, with major newspapers now reporting on a “high street crisis”. We do not want that panic to spread—I accept that it is overblown—and we do not want the Government not to deal with the matter and to put their head in the sand.

If we want to continue to have a high street, we must follow steps for business rates such as introducing a statutory annual revaluation, to stop business facing periodic and unmanageable hikes and to guarantee a fair and transparent appeals process—that has been touched on in the debate. The Government’s seven-year wait for a revaluation was one of the major reasons the process descended into chaos. Had the Government got their act together, businesses would not face such steep rises in valuations and could plan accordingly. It is quite shocking in certain situations how companies and businesses are being treated.

We would exclude new investment in plant and machinery from future business rates revaluations, to encourage investment. After eight years of the Government’s economic policies, we have the lowest productivity in the OECD; businesses must be incentivised because they are relying on pools of precarious, cheap labour rather than investing in fixed capital. That is especially the case in the retail sector. Government business rates policy should reward shifts to more productive models. I hope that we will be able to deliver on that.

Overall, we want fundamentally to reform the business rates system in the age of online shopping, to ease the burden on traditional high streets and town centres and to create a fairer system of business taxation for the £30 billion that comes in. We must recognise the gigantic shifts happening in the sector, and ensure that our fiscal framework properly adapts to that. It is not about hoping another review will make it all go away; our reform of business rates must be considered in the context of our wider support for small and medium-sized enterprises.

We want to build an economy for the many businesses, not the few. That means supporting small businesses so they can compete on a level playing field, rather than playing to the interests of big companies and monopolies, which seems to be happening all too often. To do so, we have committed to increasing lending to small and medium-sized enterprises, through our network of regional development banks. We have also committed to introducing a lower small business corporate tax, which would ease the burden on smaller retailers. We would scrap quarterly reporting, to end the scourge of late payments and reform.

Labour is offering a number of proposals, but the Government must act as soon as they can, to stop the prevarication.

Oral Answers to Questions

Peter Dowd Excerpts

Tuesday 22nd May 2018 Commons Chamber

[Mr Hammond]

We have taken steps that I have already outlined this morning to reduce the burden of taxation on businesses large and small, although of course small businesses are most beneficially affected by the £10 billion programme of reducing business rates costs and through the reduction in corporation tax levels. But we are always looking for further ways to support the smallest businesses and to encourage them to become larger businesses.

[Peter Dowd (Bootle) (Lab)]

I associate myself with the Chancellor’s remarks about the Manchester bombing.

For the Chancellor to make up his own small business tax policies on the hoof is one thing; making them up for the Labour party is a fantasy. The Government have ruled out a customs union with the European Union worth £16 trillion for an alternative customs union with British overseas territories worth only £22 billion. Is the Chancellor happy with that decision? Can he give us any clue about how such a decision will support businesses and entrepreneurs?

[Mr Hammond]

I do not know whether that was an announcement of a change in Labour party policy. My understanding is that the Labour party’s position is to increase corporate tax rates for small businesses. Perhaps the hon. Gentleman will tell us whether he has changed his position.

On the question of our future customs arrangements with the European Union, the hon. Gentleman will know that I have consistently sought arrangements that will protect our existing trade with the European Union, allowing British businesses to continue to trade freely with the minimal possible friction at the border with the European Union. We do not believe it is necessary to be in a customs union to achieve that.

[Peter Dowd]

For the Chancellor’s information, he can easily find our policies on www.labour.org.

When the Chancellor met David Cameron last October to give a thumbs-up emoji to Mr Cameron’s UK-China investment fund, presumably to help businesses and entrepreneurs, was he aware that the fund is to be domiciled in the Republic of Ireland? If so, did he think to ask the former Prime Minister whether that was for the purposes of tax avoidance?

[Mr Hammond]

I have already answered the hon. Gentleman’s questions about my meeting with Mr Cameron last October. In a meeting that ranged across a number of issues, Mr Cameron was good enough to inform me of his intention to take up this role with a fund promoting investment both in China and the UK. The Government support all initiatives that improve trade and investment between the UK and China.

Economies of the UK Islands

Peter Dowd Excerpts

Wednesday 9th May 2018 Westminster Hall

[Peter Dowd (Bootle) (Lab)]

It is a privilege to serve under your stewardship, Mr Rosindell. I congratulate the hon. Member for Havant (Alan Mak) on securing this debate and bringing the issue to the House to chew over—it is very important. The contributions from the hon. Member for Isle of Wight (Mr Seely), the right hon. Member for Orkney and Shetland (Mr Carmichael) and the hon. Member for Ayr, Carrick and Cumnock (Bill Grant) indicate the complexity, diversity and multifaceted aspects that this issue throws up. It must be seen in the context of the type of islands that we have in this country—from the Isle of Wight, with its 140,000-odd population, right through to some of the inhabited Scottish islands, which have perhaps five or six inhabitants. It is not quite as simple as saying that an island is an island is an island.

There is also the diversity of economic activities on our islands. The hon. Member for Ayr, Carrick and Cumnock talked about windsurfing, and I also got the impression that he has tasted whisky. I look forward to hearing his experiences of windsurfing—if not seeing the photographs—next time we debate.

As the hon. Member for Havant mentioned, one of the greatest problems faced by the economies of UK islands is poor infrastructure. The rising cost of transport for people who live on UK islands clearly has a knock-on effect on jobs, suppliers and the population, as many young adults are choosing to leave their island homes in favour of finding work in the rest of the country.

Another challenge is the higher levels of unemployment; the unemployment rate on many islands is well above the national average. The Isle of Sheppey’s unemployment rate stands at 2.6%, while those on the Scottish islands of Arran and Bute are 3.8% and 4.1% respectively. As has been discussed, many islands are tourist destinations, which means that a large amount of the work is seasonal. In the past, that might have been less of a challenge, but with weather becoming increasingly unpredictable due to global warming, it is much harder for those economies to plan and scale. It is not necessarily a major factor at this point, but it is a factor. In relation to the grouse—I mean gross, though grouse is very appropriate for Scotland—the gross household disposable income on UK islands is lower for workers in the Orkney Islands, the Isle of Wight, the Western Isles and Anglesey than for those in much of the rest of the United Kingdom.

Given the increasingly technological nature of advanced economies, the hon. Members for Isle of Wight and for North Ayrshire and Arran (Patricia Gibson) have quite rightly pointed out the vast differences in broadband connectivity and speeds between parts of the UK and the islands. That has a huge impact on island economies, particularly on the number of small businesses that operate remotely. Naturally, many UK island economies suffer from having less resources, which hon. Members have mentioned, and have a heavy reliance on a limited number of supply chains, which leads to the UK’s island populations paying more for goods and services. When combined with lower-than-average incomes, higher costs of household essentials are a key factor in driving poverty levels.

All those issues have been outlined with clarity by Members from across the House. We have had the analysis of the symptoms, but I am not sure we have had the practical things we can all do to help those communities—I hope the Minister will address that. It falls on me, as Opposition spokesperson, to refer to the elephant in the room: eight years of austerity. Many areas have suffered disproportionately from that because of the lack of investment in those communities, where they have struggled.

Let me take a couple of examples. I understand that Canvey Island has an independence party, with eight or nine councillors. I am not quite sure whether they are going to get to a referendum—but perhaps we should not go there, or talk about customs unions or single markets, as I am sure we have enough trouble with that at the moment. Canvey Island sits in the borough of Castle Point in Essex, a local authority that has seen nearly £1 million of Government grant disappear. Reports now suggest that Castle Point will be running a million-pound deficit in three years’ time.

Perhaps we should turn to Hayling Island, which the hon. Member for Havant mentioned and knows well, as it is in his constituency and covered by Havant Borough Council. A couple of months ago, his local paper, the Portsmouth News, reported that the local authority had been forced to increase council tax by the maximum of 3%. The local population will have to pay that—a population that, as the hon. Gentleman said, are already stressing and straining. Why might a Conservative council feel the need to increase taxes on the good people of Havant and the island of Hayling? It faces a £1.2 million reduction in central Government support as a direct result of the Government’s policies. There is no way to duck that particular issue. The council leader, when describing the measures being taken to try to rescue some services said:

“We didn’t want to go down this route but we had no option”.

The council faces a significant reduction in central Government funding through the revenue support grant, which in 2016-17 was £1.4 million, is now £290,000 and from 2019-20 will be zero. That is a factor in the issues that the hon. Gentleman raised.

These are not isolated examples. If we consider any of the local authorities of the islands mentioned in this debate, the story is the same—deep and pernicious cuts that threaten the very existence of some of them.

[Mr Carmichael]

Of course reductions in public expenditure are difficult for island communities, as they are everywhere. The real difficulty that they face is not just the amount of money that they have to spend, but the fact that so much of it comes with strings attached and local authorities are given so little discretion over how to spend the money that they have. What island communities need more than anything else is the ability to make decisions for themselves.

[Peter Dowd]

I agree with the right hon. Gentleman, and his point feeds into the whole question of devolution within nations. Whether we like it or not, there is centralisation down here in Whitehall and Westminster. That is not a criticism, as it happens in all parties. In the past, I have called it—forgive the phrase, Mr Rosindell—the anal retention down here. It is not particularly helpful or productive. Local communities know their areas best and it is best for communities to get on and use their discretion, within as wide a parameter as possible, to provide services in their areas. They tend to know best.

Given how these local economies are often heavily reliant upon the public sector, following major structural changes to the economy of the last four decades, it is little surprise that some communities are under stress. The hon. Member for Havant referred to commercial practicalities. Sometimes, they will close down banks, pubs and other services. Do we permit that to happen, or do we do something to ameliorate it? It is sometimes the Government’s job to help and to intervene—not to direct or do too much, but to go in and help communities where such services are the lifeblood. In 10 or 15 years’ time, we will all be concerned that such services have de facto closed down, and we will ask what we could have done to support them.

Some islands are getting increasingly desperate about the way things are. All joking aside, some people on Canvey Island want independence because they do not feel they are getting the deal they should be getting. That underlines the point that the right hon. Member for Orkney and Shetland made about devolution and about local communities being able to run themselves where possible.

It is important that the Government begin to invest in the UK island economies and engage with their populations. Whether that means the Isle of Wight or a small island off the Scottish coast, that has to happen. It could mean investing to stimulate employment opportunities on UK islands, as the increasingly unpredictable cycle of seasonal work is clearly not enough to sustain island economies. Anglesey and Orkney have demonstrated that investment in renewable energy can deliver sustainable jobs and put the UK on the path to energy security, as the right hon. Gentleman said. The Government have to stop being blinkered; they must look at these issues and at how they can work with communities.

The Opposition have some transformative proposals, such as our plan for a coastal communities fund—a policy we have been consulting on since the election, and which we will begin to outline in due course. I believe it will address some of the issues that the hon. Member for Havant raised, deliver investment in a number of UK island economies and hopefully bring them back from the brink. In our grey book, “Funding Britain’s Future”, we set out an immediate increase in local government funding while we review council tax and business rates. That in itself will not prevent some communities from going over the edge, but we have to send them the message that we are here to help and support them, and that we will do everything we can to ensure they continue so that we maintain the diversity of our country. I am sure the hon. Gentleman will welcome that injection of investment into his community.

We need a radical rethink to help communities that feel under pressure, left behind and under threat. Tinkering at the edges is not good enough, and will not help island communities, in their diversity, to succeed.

Economic and Fiscal Outlook

Peter Dowd Excerpts

Monday 30th April 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

Meanwhile, back on planet Earth, a prerequisite of the UK’s participation in the EU has been regular submissions of the Government’s assessment of the UK’s medium-term economic and budgetary position. I think the Chief Secretary to the Treasury will appreciate that one of the advantages of leaving the EU—for once, everyone on the Conservative Benches will agree—is the humiliation, wincing and cringing that the Government will forgo when they no longer need to submit their economic record to the scrutiny of European colleagues. The Government are rudderless, collapsing in on the weight of their own contradictions and economic ineptitude.

Let us turn to the record. While countries in the eurozone post a 10-year high in terms of economic growth, the UK under the Tories is left behind. Let us look at the seven deadly sins of the Tories. No. 1 is self-delusion, which we had in spadeloads from the right hon. Lady. Last year, growth in our economy was the lowest in the G7, and growth in the first quarter was the weakest since 2012. The Office for Budget Responsibility has now revised forecast growth down in both 2021 and 2022 since the Government’s autumn Budget, and growth is lower in every year of the forecast compared with March 2017. The upbeat tone of the Chancellor at the spring statement betrays the economic reality that many have experienced over the last eight years of Conservative mismanagement, and while the Chancellor may want to blame recent poor growth on a bit of bad weather, those of us living in the real world see an economy desperate for investment.

The second sin is sloth. The Government have provided the slowest recovery since the 1920s, and productivity growth is at its worst for two centuries. On productivity, the Government’s record is one of failure. Productivity forecasts have been revised down this year and for every year of the forecast. While the Treasury celebrates a slight uptick in the productivity figures referred to by the right hon. Lady with a “thumbs up” emoji and manic optimism, the underlying figures show a fall in production and a fall in the hours worked.

[Simon Hoare]

Particularly in relation to point 2, were the hon. Gentleman to be making the report to the EU, which of the options of the shadow Education Secretary would he be reporting—would Labour’s policy be shit or bust?

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. Those are not normal terms that we would use in the House.

[Peter Dowd]

I would rather not respond to a rather crude comment, which is quite frankly almost as crude as the Government’s economic policy.

Number 3 is profligacy. The right hon. Lady talked about it, but here is a bit of profligacy: since coming to power, the Conservative Government have added more than £700 billion to the national debt. There was no mention of that. The UK’s debt-to-GDP ratio this year stands at a staggering 86.4%, as referred to by my hon. Friend the Member for High Peak (Ruth George). The UK has a higher debt-to-GDP ratio than 20 out of the 27 other EU member states after eight years of this so-called economic miracle.

Sin No. 4 is misplaced pride. The Government have long prided themselves on being the so-called party of business, yet in eight short years they have managed to alienate the business community. Business investment has been revised down for the next two years, and businesses are holding off key investment decisions due to the uncertainty caused by this Government’s shambolic approach to the Brexit negotiations. Ministers claim that the Government have raised an extra £175 billion from clamping down on tax avoidance—another visit to fantasy island—but they have refused to offer a breakdown of this figure, a list of the anti-avoidance measures involved and the amount each has raised.

[Huw Merriman (Bexhill and Battle) (Con)]

What does the hon. Gentleman think would be the view of the extra 1.2 million businesses that have been created since 2010 on his proposed increases in taxation?

[Peter Dowd]

I suggest that the hon. Gentleman read the Labour party’s “Funding Britain’s Future”—our Grey Book. I will send him a signed copy for him to look at, and it will show that what he has said is arrant nonsense.

Under the Conservatives, Her Majesty’s Revenue and Customs has become a pale imitation of its former self, with staff and resource levels cut by 17% since 2010. HMRC’s failure to investigate Lycamobile, one of the Conservative party’s largest donors, for money laundering raises further questions about its independence and effectiveness. The Chancellor has been privately lobbied into supporting the former Prime Minister’s UK-China investment fund, but we now learn that it will be domiciled in the Republic of Ireland. That, presumably, is for tax purposes—it is certainly not for charitable purposes. So much for this being the most transparent Government in history.

Sin No. 5 is bullying. I have often heard Ministers speak about the resilience of the economy, but they say little about the resilience of the workers who work in it. The reality is that this Government have spent the past eight years laying siege to the poorest in our society and the public services they depend on. They bully the powerless and, in oleaginous fashion, suck up to the powerful. The Government’s austerity agenda has left our local services on their knees. Since they came to power, local authority spending on early intervention has had a 40% cut in real terms—and so it goes on. I could give a catalogue or litany of these issues, but we know what they are. Rather than throwing our indebted and overstretched local authorities a lifeline, this Government are instead pushing ahead with further cuts.

With sin No. 6, we turn to education, which the Chief Secretary mentioned. The Conservatives are responsible for the first real terms per capita cut in schools funding in 20 years, and they have deprived 1 million children of a decent free school meal. [Interruption.] They just do not like the truth. The trebling of tuition fees, the abolition of maintenance grants and the sale of the student loan book have ensured that students leaving university today will be the most indebted in our country’s history. Meanwhile, the NHS moves from a winter crisis to a spring crisis—and it will go on to a summer crisis —and the staff who run it continue to struggle. Under the Conservatives, they find themselves understaffed, underpaid and under-appreciated. While Rome burns and our public services crumble, the Chief Secretary can be found instagramming and tweeting selfies of herself at the Dispatch Box with other Treasury Ministers.

The last of the sins is pomposity, which the Government do very well: they are very good at pomposity. Listening to the Chief Secretary speak about the need for robust public finances and the merits of the free market, people would wonder which country she has been living in for the past eight years. After all, the Government have missed every deficit target they have ever set themselves. The former Chancellor’s target for a 2020 surplus is but a distant memory—an inconvenient truth, quickly forgotten. Public debt stands a £1.8 trillion, and the Government have put more debt on to the shoulders of the people of this country that any other Government. When they came to power, they proclaimed that we were all in it together—we are all in it together right up to our necks —but eight miserable, oppressive years later, communities have been left to fend for themselves.

What will be the Tories’ parting legacy as we leave the EU? It will be a divided, poorer, less confident, low-growth, low-wage, low-skilled and less productive country, all thanks to a clapped-out, self-obsessed and failing Government who rely on oligarchs to give them £160,000 bungs to help them to hang on to power—I hear the Foreign Secretary say, “Anyone for a game of tennis?”

Customs and Borders

Peter Dowd Excerpts

Thursday 26th April 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

The debate has been enlightening and I have welcomed the chance to listen to all the Members across the Chamber. I should like to thank the 12 cross-party Chairs of the Committees and the Liaison Committee for enabling us to explore this motion today, particularly my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), who set the scene. I would also like to thank the right hon. and learned Member for Rushcliffe (Mr Clarke), who said that we needed a proper debate. To some extent, we have had that debate today. The motion and the debate have set out in stark terms the overwhelming case for the UK to negotiate a new customs union with the European Union on our exit.

I would like to share a quote with the House. Forty years ago, almost to the day, a former Leader of the Opposition wrote this in a German newspaper:

“It is no small thing to have completed and preserved a customs union covering a market of nearly 300 million people.”

That was Mrs Thatcher, then the Leader of the Opposition. The current Leader of the Opposition takes the same view—that a customs union involving Britain and the European Union is a project worth preserving. However, bound by the whims of the misguided or the ideologues in her party, the Prime Minister is unable to serve the national interest and commit the Government to negotiate a customs union with the EU beyond the transition period. As the right hon. Member for Loughborough (Nicky Morgan) asked, what are the plans? There do not appear to be any at all.

We are calling for an outcome that will protect the UK economy—a “jobs first” Brexit in the context of the six tests set by the shadow Brexit Secretary, my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer). So, while the Prime Minister talked about leaving under no deal, we have tried to work with the manufacturing industry and other business sectors to examine how we might best protect the interests of both producers and consumers, as have other Members across the Chamber. The Prime Minister explicitly ruled out a customs union with the EU in her Mansion House speech in January, yet at the Press Gallery lunch today the Home Secretary apparently cast some doubt over that, but she has since tweeted to say that we are now back on track and that there will not be a customs union. It is the lack of continuity and the confusion that creates problems.

By direct contrast, my right hon. Friend the Leader of the Opposition made it clear that Labour is committed to such an arrangement, saying that

“Labour would seek to negotiate a new comprehensive UK-EU customs union to ensure that there are no tariffs with Europe and to help avoid any need for a hard border in Northern Ireland.”

As on many other issues, a cursory glance at Labour’s position shows that that is the line that we have been taking for a considerable period. Whether we like it or not, the Prime Minister has caused confusion. As far as we are concerned, we are campaigning for a customs union, and we are determined to follow that. We are not in the business of keeping Britain in the EU through the backdoor, nor would we countenance a deal that left Britain as a passive recipient of rules decided by others elsewhere. However, many in the Chamber have acknowledged the huge risks and uncertainties that leaving the customs union presents for jobs, manufacturing, business supply chains and, importantly, continued peace in Northern Ireland. A comprehensive and effective UK-EU customs union is possible and would ensure that there are no tariffs with Europe and avoid the need for a hard border in Northern Ireland.

In entering a new customs arrangement with the EU, we would ensure that our hard-won workers’ rights, standards and protections are maintained and protected, blocking attempts by the more ardent Brexiteers to create a bonfire of such rights and the weakening of environmental protections. The new customs arrangement needs to ensure that Britain can have a say in future trade deals. A new customs union would ensure that the UK maintains close and progressive co-operation with the whole of Europe after Brexit, rather than creating the risk of growing isolation, which would see us further apart from our European neighbours on regulation, rights and standards. As has been identified today, even the Government’s leaked impact assessment, among other reports, shows that their highly streamed customs proposal will lead to non-tariff barriers and some tariffs, and it reaches the same conclusion as we have: a customs union is the only way to guarantee frictionless trade between the UK and the EU.

[Kevin Hollinrake]

Will the hon. Gentleman give way?

[Peter Dowd]

I would like to, but I do not have the time.

Clause 31 of the Taxation (Cross-border Trade) Bill, which gives the Government the power to enter into a customs union, was published in November 2017, as was mentioned by the hon. Member for Aberdeen North (Kirsty Blackman). However, within weeks, the PM was ruling out a customs union, but it remained in the Bill on First and Second Readings and in Committee. Has anyone bothered to mention that clause to the Prime Minister? Is she even aware of it? Should she not commit to clause 31?

Today’s debate will send a clear warning to this Government that they cannot simply steamroll over the wishes of Members. It is time for the Prime Minister to act like one and to challenge those in her party and her Cabinet who continue to hold the country and the negotiations hostage. The road ahead is clear, and Labour’s position has been consistent, as many have said today. It is time for the Government to listen to the consensus and adopt a position that seeks to negotiate a new UK-EU customs union. It is the only practical way to ensure frictionless trade and to protect jobs and the hard-won peace in Northern Ireland. As many Members have said, we owe that to our constituents and to our country.

Oral Answers to Questions

Peter Dowd Excerpts

Tuesday 17th April 2018 Commons Chamber

[Mr Hammond]

I am happy to tell my right hon. Friend that we have had a very productive first meeting with the CBI and the Trades Union Congress to flesh out the shape of the national retraining partnership, which is clearly going to be a crucial part of our investment in skills in future. I do take her point on childcare. We have of course seen the Select Committee’s report and will respond to it in due course.

[Peter Dowd (Bootle) (Lab)]

On 6 April, the Treasury bizarrely used a “thumbs up” emoji in a tweet celebrating the worst decade of productivity figures since 1817. I will help the Chancellor with the arithmetic—that is 201 years ago. I know that he has a new-found Tiggerish optimism, but is not his Department’s tweet, even with his misplaced exuberance, more like self-delusion for which local government, the police, the NHS, the fire service and public services more generally are paying the price?

[Mr Hammond]

We have a challenge in this country around productivity, and it is not a new challenge, as the hon. Gentleman well knows. For eight years, the OBR has estimated UK productivity growth, and on eight occasions it has had to revise down the estimates that it had made. This is a long-term challenge facing this country. Rather than trading insults about what has happened in the past, I suggest that the most constructive approach would be for us to work on improving the UK’s productivity performance. That means investing in infrastructure—this Government have committed half a trillion pounds of capital investment since 2010—addressing the skills gap, ensuring that capital is available to businesses, and addressing management challenges at the level of the firm. All those strands need to be taken forward together if we are going to create the high-tech, high-wage economy that we all want to see in this country.

--- Later in debate ---

[Mr Hammond]

The Government are highly committed to the apprenticeship programme. I recognise that starts are down—we always expected that—but something else is happening, because analysis shows that now that employers are contributing with their own levy to apprenticeship programmes, they are opting for higher-level apprenticeships. There are fewer starts than we expected, but we are seeing a much higher level of apprenticeship. There are more degree-level apprenticeships and more apprenticeships at the higher levels. The Department for Education and the Treasury are looking carefully at how this is working—[Interruption.] This is a serious issue, but the important question is about making sure that the skills that the economy needs are generated.

[Peter Dowd (Bootle) (Lab)]

The only productivity figures worse than the UK’s are the Chancellor’s—that is not an insult, but a statement of the blindingly obvious. Is he aware that a recent TUC assessment indicated that, in effect, the UK economy is on a negative trajectory? GDP growth is weak—on an annual basis, it is the weakest it has been for five years—and hours worked have declined. Public investment lags significantly behind that of our comparators. Wages remain stagnant and inflation is stubbornly high. What is his answer to this—perhaps a tweet, and maybe with a smiley emoji this time?

[Mr Hammond]

Not for the first time, I do not recognise the picture of our economy that is painted by Opposition Front Benchers. Figures today tell us that we have new record high numbers of people in employment, and new record low unemployment figures. That should be something that we are celebrating. Real wages are forecast to turn positive from this quarter and to go on growing thereafter. Employment is expected to grow by another 500,000 by 2022. We are working hard to ensure that productivity performance increases across the economy because that is the only sustainable way to achieve higher wages and higher living standards.

Digital Taxation

Peter Dowd Excerpts

Tuesday 27th March 2018 Westminster Hall

[Peter Dowd (Bootle) (Lab)]

It is a pleasure to serve under your chairmanship, Dame Cheryl. I thank the hon. Member for Harborough (Neil O’Brien) for securing this debate on this important topic. I am in agreement with much of what has been said: I am not sure whether I should be worried about that or the other side of the Chamber should be. As for the hon. Member for Witney (Robert Courts), I am more than happy to get the shadow Chancellor to sign his red book, if he thinks that will be of help. I think I will give the hon. Member for North East Hampshire (Mr Jayawardena) a copy of “Funding Britain’s future”, and he will be as excited and quivering as the hon. Member for Croydon South (Chris Philp) as he reads it.

In today’s tax system there is clearly one rule for workers, small businesses and the self-employed and another rule for large multinational corporations, which have successfully harnessed globalisation to maximise profits while minimising the tax they are required to pay. People have indicated that today. According to HMRC, multinationals avoided as much as £5.8 billion last year in corporation tax alone. That represents a 50% increase from the Government’s previous forecast.

The growing discrepancy, as hon. Members have alluded to, between the revenues that companies such as Google and Amazon record and the low level of tax they pay in the UK only demonstrates how divorced from the reality of the modern economy our corporate tax system has become. Small businesses, on the other hand, will be subjected by April 2019 to increasing regulations and stricter timetables for the filing of online taxation, notwithstanding some of the amelioration of that process. The Opposition have raised that issue many times. The mandated start time for small businesses to file online for returns will coincide closely with Brexit, so there is a serious risk that they will be overwhelmed with the nature and scale of changes required during that period, especially in relation to digitalising tax returns.

I congratulate the Minister on his Paymaster General position. That reminds me, when the cheques are signed in Her Majesty’s presence and it is not the Minister, I am not sure who does not trust whom in that situation. Despite the Minister’s promises over the past year, I am not quite sure that enough has been done to trial the software and that should be looked at. There is a consensus across the Chamber about large multinational technological companies not paying their fair share of tax, and increasingly shifting profits offshore to tax havens and countries with low-tax regimes. We have heard, for example, that eBay paid £1.6 million on £1.3 billion worth of revenue raised in the UK. It goes on and on. Credit to those hon. Members who have raised this.

There is also the question of HMRC resourcing—raised by the hon. Member for Dundee East (Stewart Hosie)—which is an elephant in the room as far as I and other hon. Members are concerned. The Government launched two consultations last year on corporation tax and the digital economy, and royalties on withholding tax. Those are important steps, but they remain pretty poor compensation when considering the deficit of meaningful action that is being taken. The EU, on the other hand, is already considering, as hon. Members have indicated, the introduction of 3% tax on the revenues of multinational digital businesses. That tax would affect firms such as Facebook and Google with a global annual revenue—as the hon. Member for Croydon South has said—of above €750 million and taxable EU revenue above €50 million. So the policy reflects a growing shift across the world, where many countries are moving towards a tax system where companies would be expected to pay a tax on revenues rather than profits. For example, there is currently a Bill going through the Indian Parliament that would force companies to pay tax on their economic presence. Those are all options for discussion and debate. I am pleased that the hon. Member for Harborough has brought this debate to us today, because we can start the particular process of teasing out those options. That was a problem first raised at the global level by the OECD in 2012 via its base erosion and profit shifting initiative, which has also been mentioned today.

In the press, the Financial Secretary to the Treasury said that a tax on the revenues of tech companies in the UK is the “preferred option”. It might come out in the Government’s review. It will be interesting to know how the Financial Secretary came to that decision. Perhaps he can tell us more about that today. The Chartered Institute of Taxation has rightly pointed out that any action must be in co-operation with other states, as far as possible, to prevent the UK becoming an outlier. It argues that unilaterally abandoning a negotiated international approach to allocating taxable profits between countries would risk retaliation, double taxation and perversely new arbitrage opportunities.

[Chris Philp]

The hon. Gentleman is right to point out that in terms of profit allocation that does need to be done multilaterally on a global basis, but does he accept that a sales tax—or certainly a user tax—could be done unilaterally?

[Peter Dowd]

I think the debate is to be had. That is the point. In the spirit of co-operation the debate has been started today and I have tried to put in my tuppence worth, as have other hon. Members. With that in mind, I ask the Minister what discussions the Chancellor has had with EU counterparts about an EU-wide initiative to tax tech companies’ revenues. How will the EU’s initiative complement the Government’s plans? What is the likelihood of the EU’s tech tax being introduced before we leave the EU on 29 March 2019? Will the UK adopt the EU’s tax on tech companies’ revenues irrespective of us leaving?

Finally, what discussions has Her Majesty’s Treasury had with representatives from other countries outside the EU on a tax revenue for tax companies, particularly at last week’s G20 meeting? It is extremely important that the UK acts as part of a collective effort to stand up to tax avoidance and to ensure that tech companies and other multinational corporations pay their fair share and cannot operate outside the law. I exhort the Government to test out some of the suggestions made today. I look forward to hearing the Minister’s response.

The Economy

Peter Dowd Excerpts

Thursday 22nd March 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

I do not know how the Chief Secretary managed to keep a straight face throughout that speech, and I am confused, too: listening to her, I thought I was in some sort of utopian democracy, but I am afraid it is completely not like that. It is a little over a week since the Chancellor stood up in the Chamber and delivered the first spring statement, proclaiming that there was light at the end of the tunnel, yet at the same time the Government have presided over the slowest recovery since the 1920s. The Chief Secretary did not mention that, so it is no surprise that for many people across this country her words rang hollow and untrue. The Tigger-like demeanour of the Chancellor and the back-slapping and self-congratulatory tone of his Cabinet colleagues, rather than reassuring an increasingly fearful public, reek of a complacency that betrays the poor state of the public finances and the challenges our economy faces.

The Chief Secretary referred to facts so let us have a few, because the facts do speak for themselves. Last year growth in the UK economy was the lowest in the G7 and the slowest since 2012. Inflation is the highest in the G7. Despite the marginal upward revisions last week, the Office for Budget Responsibility has revised forecast growth down in both 2021 and 2022, and growth is lower in every year of the forecast compared with March 2017. Those are a few facts I thought I would chuck in.

Meanwhile the economy, according to the Institute for Fiscal Studies, will now be 3% smaller in 2020-21 than was forecast just two years ago. Another fact: real wages have fallen every month in the last year and are lower today than they were in 2010. The OBR has said that it expects wages to remain subdued—an understatement if ever there was one—over the next five years, and the Resolution Foundation has gone further, arguing that the last decade has been the weakest for average earnings in two centuries after adjusting for inflation. So that is a strong economy, is it? It does not look very strong from where I and millions of other people sit.

Meanwhile, personal debt, which has risen to worryingly high levels, and stronger world growth are helping to keep the show on the road, masking just how useless the Government’s economic policy is. The reality is that the Government’s bluster and bravado are fooling no one, particularly at a time when their failed economic policies continue to harm the UK economy and not just the most vulnerable in society, but millions of people who are in work.

Whatever positive spin the Chancellor and the Chief Secretary want to put on it, this Conservative Government have missed every deficit target they have ever set. [Interruption.] It would be a lot better than under this Government; they have not really invested, and the investments they have made are pretty poor. Public sector borrowing is still higher than forecast a year ago, and public sector debt is over £700 billion higher than when the Conservatives came to power. This is hardly a record of economic competence, but is instead reflective of just how out of touch Ministers are. And may I remind the Chief Secretary that they supported all Labour’s financial spending plans in 2007-08?

[Luke Graham (Ochil and South Perthshire) (Con)]

Does the hon. Gentleman not find it a little ironic that he is criticising my colleagues on this side of the House when his own party’s plans would plunge our country into even more debt, which we would be paying off for another two generations?

[Peter Dowd]

The hon. Gentleman is living on the same fantasy island as the Chief Secretary to the Treasury.

Outside the corridors of Whitehall and the Conservative cocktail parties, the reward for such a consistent record of failure in any job would be the boot. Instead, this divided and increasingly paralysed Government linger on, propped up by the Democratic Unionist party, with not much of a legislative agenda to speak of. It is almost like being on a zero-hours contract, which I know the Chief Secretary to the Treasury loves, while still being paid. It is clear that the Government are running scared. It is been seven weeks since the Public Bill Committee stage of the Taxation (Cross-border Trade) Bill, yet there is still no sign of Ministers putting it before the House for its Report stage. They are frightened to death to come to the House on that matter. Instead, we have been subjected to the reckless and misinformed musings of the Transport Secretary, who has speculated that customs checks will simply not be enforced at the port of Dover. Similarly, Ministers have refused to bring back the Trade Bill, at a time when President Trump is on the verge of starting a trade war.

[Bim Afolami]

I want to take the hon. Gentleman up on his point about personal debt levels. Does he agree that it is because this Government’s fiscal management has been so sensible—and recognised as such by the international markets—that interest rates have been kept low? This means that personal debt repayments are now lower on average than they were when the Labour party left office.

[Peter Dowd]

We lost our triple A rating under the hon. Gentleman’s Government, so I do not think he has any room to point the finger at anyone.

While stressed-out doctors and teachers go to work every day, the Government duck responsibility and parliamentary scrutiny at every opportunity. The Chief Secretary to the Treasury might call these hard-working people “blobs”, but every day they run our health service and educate our children. Rather than spending her time attacking workers and the professional classes, the blob snob Chief Secretary should instead focus her attention on lifting the public sector pay right across the board and stepping up and taking action on our schools.

[Elizabeth Truss]

The point I was making was that, rather than supporting the vested interests, as the Opposition want to do, we want to get rid of state aid roles supporting the big companies and those who want to stop new people entering professions. I am on the side of people who have not got on the housing ladder or who have not entered a profession but who want to set up a new business. We want to deal with the vested interests that prevent that from happening.

[Peter Dowd]

I will tell the right hon. Lady what those professionals have: they have a vested interest in the health of our people, and in the health and education of our children. They have a vested interest in those people, unlike those on her side of the House.

[Thelma Walker]

Does my hon. Friend think that a massive increase in the use of food banks, homelessness and child poverty—and women’s life expectancy going down for the first time since 1920—suggests that we have a healthy economy and a compassionate Government? I do not think so.

[Peter Dowd]

My hon. Friend is absolutely right. Those are yet more facts that the Government will not listen to.

The Chancellor has chosen to play things down, and he has desperately attempted to diminish the importance of his spring statement. He might have ditched the Red Box, but he has not ditched the plethora of problems facing this country. From social care to children’s services, our public services are stretched to breaking point, and it is the most vulnerable people in our society, and working people, who are paying the price.

[John Redwood]

I note that only two Labour Back Benchers think that this is an important issue. Does the hon. Gentleman agree that it is an awful lot better to be living in the United Kingdom’s economy today than it was in the last Labour year, when we had a banking crash and a great recession?

[Peter Dowd]

I remind the right hon. Gentleman of the document that he oversaw, “Freeing Britain to Compete”. In it, he proposed even more deregulation. He said at the time that if Labour regulated the banks even more, they would be stealing all our money. Well, in effect, they did, because they had to have a £1.5 trillion bail-out, yet he wanted more deregulation. We are not going to sit here and listen to all this fantasy from the Government.

[John Redwood]

If the hon. Gentleman had read the whole report, he would have seen the clear warning that the banks did not have enough cash and capital. We said that they should have more.

[Peter Dowd]

I actually did read those turgid 300 pages. It was my penance to have to read that document. I will most probably get time off purgatory for that.

On the subject of children’s services, the decision on free school meals is unforgivable. It was made by the Chancellor and his colleagues in the full knowledge that it would have a detrimental impact on people up and down this country who rely on those kinds of services. In relation to social care, no amount of kicking things into the long grass will make up for the inaction and indifference that the Chancellor has displayed.

[Bambos Charalambous]

Does my hon. Friend agree that, with one Tory council having gone bust and others forcing unprecedented cuts on local services, the Government are failing local government? Does he agree that the Chancellor has not funded local government finance properly, leading to suffering among the most vulnerable people?

[Peter Dowd]

Yes, and quite frankly, what the Government tend to do in these situations is stick their fingers in their ears. They do not want to hear these facts.

I know that the Chief Secretary to the Treasury has been much more active, particularly on our trade deficit in regard to dairy products and the interests of cheesemakers. This has led her to extol the virtues of “unfeta-ed” markets on so many occasions that I have begun to feel that I “camembert” it any more. It has become increasingly clear that the Government’s economic policy has more holes in it than a Swiss cheese. But there is a serious point here. During her seemingly endless public interventions, the Chief Secretary to the Treasury can only focus on a single theme. She has brought it back to us today, and I thank her for that. It is her belief that the state should continue to recede under permanent austerity. Schools, hospitals, social care, childcare, road maintenance, pollution standards and local government services more generally are all under the cosh, while her beloved market forces create new vape shops on every corner, and more misery.

[Bim Afolami]

To be more accurate, was not the Chief Secretary to the Treasury actually talking about a percentage of the total GDP of the state, and not the quantum amount? The heart of her argument was that if we continue to grow the economy as we are doing, we will have much more money for our public services. That was the real core of the point she was making.

[Peter Dowd]

Look, the reality is that the economy is not growing to the level it should be, because this Government are not investing in it. Actually, something like 50% of the growth in the economy is going to the most well-off 10%, and that is not reasonable. It is not fair. I ask the hon. Gentleman to bear those figures in mind. It is not simply a question of the growth in the economy; it is a question of where that growth goes and whether it is being shared out reasonably.

[Luke Graham]

Given that we are talking about growth figures, will the hon. Gentleman welcome the export boom in the north-west that has seen exports increase in the billions for Cumbria and Liverpool?

[Peter Dowd]

Of course, and I am glad that the Chief Secretary mentioned the port of Liverpool, which is actually in my constituency. She should have popped in for a cup of tea.

[Elizabeth Truss]

The hon. Gentleman was not there.

[Peter Dowd]

I know; I was busy here. The hon. Member for Ochil and South Perthshire (Luke Graham) makes a point about exports, but we have seen the biggest devaluation in the pound for as long as anyone can remember, and I suspect that that has had something to do with it. It is hardly down to the policies of the Government; it is an unexpected consequence.

Let us move on to something released today. Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services yet again reports huge pressures on police forces, with emergency services responding not in seconds, minutes or even hours, but days. The “golden hour” is being stretched to up to a week—there is an achievement by this Government from a strong economy! It comes in the wake of the UK Statistics Authority having to correct the Prime Minister’s imaginative—not a word that we often use in association with the Prime Minister—use of police funding figures. I cannot see much cause to celebrate the current state of the economy after eight years of Tory austerity.

Britain continues to have astonishingly low levels of productivity compared with other G7 countries, which is a direct result of this Government’s failure to invest productively and proactively in the economy. Bizarrely, however, the Chief Secretary wants to celebrate—she did it again today—the poorly paid, precarious labour market that has fostered unproductive business models, which rely on exploitation instead of innovation and investment. For example, much of her Policy Exchange speech was spent singing the praises of Uber, as she did again today, but Uber’s labour practices and poor track record on safety have made it the subject of an investigation by Transport for London. She sits in awe of some large corporations that use every opportunity to dodge their taxes. Yesterday, we heard about Facebook misusing people’s personal data for profit. Is that the sort of country we want to live in? Of course it is not. Is that the sort of company that the Chief Secretary thinks is marvellous, wonderful and a model?

The Labour party embraces the opportunities of a fourth industrial revolution that empowers working people to take control of their own lives, yet the Conservative party wants to return to the practices of the first industrial revolution, when the world was dominated by the interests of the few. It is strange that the Chief Secretary talks about freedoms while advocating a society in which the broad mass of citizens are denied basic rights. For example, how has the slashing of public services, while tax breaks are being handed to big corporations, made us freer? It has only trapped people in poverty and poor health.

[Bim Afolami]

The hon. Gentleman’s speech illustrates the big dividing line between the two sides of the House. The Chief Secretary is concerned with people and consumers having access to high-quality, well-paying jobs and high-quality public services; the Opposition and the hon. Gentleman are obsessed with vested interests and the producers, many of which are not providing a good service to the British people.

[Peter Dowd]

Things are not going very well on that basis, but the bottom line is that that is the Tories’ one-dimensional approach to things. Producers and consumers often interact. The person who works in the factory is a consumer and a producer. This goes to the heart of why the Tories just do not get it. They are the one-dimensional party.

The Government’s entire economic strategy has been the transfer of private losses on to the public sector through austerity, using the state to pay for the losses built up by their donors. In other words, the Chief Secretary’s free, lightly regulated markets have ended up costing us all a good deal, and she now wants to expand that even further at greater expense to us all. Her Government’s economic strategy has left us buckling under huge national debt, with public services in crisis. It has left us with NHS trusts ending this financial year with a £1 billion deficit, and we have seen capital transfer to revenue for about the past four years, which is hardly the sign of a strong economy.

[Giles Watling (Clacton) (Con)]

I hate to go back to A. A. Milne, but I am hearing Eeyore all over the place. In the past half an hour, I have received news that Dura Composites in Clacton-on-Sea is going to start exporting to India. There is great news everywhere if we just look for it, but if the hon. Gentleman keeps talking things down, that will not do the country any good at all.

[Peter Dowd]

Well, I have been hearing a lot of “Pooh” today, quite frankly. I remind the House that, yes, Tigger was the one who bounced all over the place, but he also created inventions that always went wrong. That is what is going to happen here, so I ask Members to go and read about that.

The reality is that the economic strategy has left us with a Government who are trying to deprive 1 million children of a decent school dinner in the name of tough choices. In local government, it has left us with Conservative councils going bust, a 40% cut in early intervention to support families, the highest number of children taken into care since the 1980s, and 400 women seeking refuge being turned away because there were no places available for them last year. That is the reality of the Chief Secretary’s vision of what she referred to as the Government’s “success”.

[Vicky Ford (Chelmsford) (Con)]

May I call on the hon. Gentleman, who is meant to be good at maths, to withdraw his statement about school dinners? Instead, will he confirm that following the debate and vote that we held last week, we will give school dinners to 60,000 more children, including young Josh whom I met in my constituency last week?

[Peter Dowd]

The hon. Lady is quite simply wrong—it is as simple as that. That debate went on for a considerable period of time and the hon. Lady is wrong. Try telling that to the 4,000 affected families in my constituency! I will hear none of it.

Will the Chief Secretary to the Treasury tell me exactly how having fewer refuge places makes a woman trapped in domestic violence freer? How much freer are the unprecedented numbers of children being taken into care as a result of cuts to early intervention? Finally, how are children who are unable to concentrate at school, because they have not had a decent meal, more free to pursue their life chances? This tired nonsense, full of old chestnuts, continues to be peddled by this Government as a cover to disguise an economic strategy in tatters—[Interruption.] The right hon. Lady talks about rhetoric, but there is nothing rhetorical about cuts to the NHS, education services or universal credit. There are cuts right across the system. There is nothing rhetorical when somebody has to sleep on the streets. There is nothing rhetorical about having the largest number of rough sleepers.

The Conservative Government cannot face up to the fact that we are living in a country that is denuding its citizens of the services to which they are entitled. That is happening due to not our ideological views, but the Government’s. Their lofty talk of abstract freedoms is an attempt to steer the conversation away from hard facts about who has paid the price of their failure: the poorly paid, precarious workers stuck in in-work poverty in one of the companies that the right hon. Lady hails in her speeches. Sixty per cent. of people in poverty now live in a working household. Does that indicate that the country has a strong economy? Millions are struggling to find a decent roof over their heads because of this Government’s refusal to invest in the houses we need. They are the mañana Government. They will do it tomorrow or next week or the week after. It is a little bit like the police turning up next week or the week after when they were supposed to be here today. They will eventually get there—it is just like this Government’s attitude to public services.

Disabled people have borne the brunt of austerity cuts by a Government who do not believe them when they say that they want to work but need more support. So have the 4 million people waiting on the NHS treatment list at the end of June. So have the thousands of our fellow citizens sleeping rough on Britain’s streets—twice the number in 2010—in possibly the coldest weather we have experienced for a decade. To talk about abstract freedoms when the basic needs of citizens are not being met is at best folly and at worst an insult.

Thankfully, there is only so long that the Government can try to hide their failing economic policies behind abstractions before the citizens of this country elect a Government who stand for the rights to freedom and justice of the many, not just the privileged few. I note that the Minister talked about nationalisation. The Conservative party believes in public ownership, as long as that means other countries owning our public services.

--- Later in debate ---

[John Redwood]

I am an optimist. We will have a perfectly good economic relationship even if we do not get a comprehensive formal deal of the kind that I know those on the Front Bench would really like to secure. The hon. Gentleman shakes his head. Well, let me give him the evidence. When I studied this subject before the referendum—I always like to ensure that I give good advice, so I try to find out what I am talking about and have some facts—I looked at the economic performance of the United Kingdom during the early 1970s, when we first entered the European Economic Community, and took great interest in the economic growth rate around 1992 when the single market was completed, which people say is so crucial to our growth rate. From that, I can assure the hon. Gentleman that we cannot see any positive kick up in the graph of UK growth either when we first joined the EEC or when the single market was completed in the early 1990s. Indeed, the growth rate fell off on both occasions. I do not blame the EU for all of that, but it shows that there was no great benefit.

If there was no benefit going into the thing, why should there be something negative when we come out? It is not asymmetric. There will not be a hit. I promise him that when we look back on it all in five years’ time, he will not be able to see that—certainly on world growth graphs and, I suspect, on UK economic graphs—when we left the EU. It will not be a big economic event. It is a massively important political event, but it will not be a significant economic event, because joining it was not. Indeed, even worse, in the immediate aftermath of both joining the EEC and of completing the single market, there were very big recessions where our growth rate took a very big hit. I do not blame the EEC for the first one—that was more to do with international banking and the oil crisis—but I entirely blame the EU for the second one, because it was the European exchange rate mechanism that ripped the heart out of our companies and our economy and led to a boom and bust that was almost as big as Labour’s at the end of the last decade. That was why we did so badly.

Let me now go into a little more detail on some of the crucial sectors that have been badly damaged by our membership of the EEC, and then the EU and single market. We can do rather better in those areas once we are out of the legal entanglements.

Let us start with the most obvious and topical one this week—the fishing industry. When we first went into the EEC, we had a flourishing fishing industry, with a large number of trawlers and successful fishing ports in Scotland, England and Wales, and a net surplus of fish. We were an exporter of fish because we had access to one of the richest fishing grounds in the world in our own territorial waters and beyond. The common fisheries policy destroyed much of that. Many of our boats were lost, and much of our fishing capacity was lost. We are now a heavy net importer of fish, as a result of being part of the common fisheries policy. Our fishing grounds have been greatly damaged, because too many industrial trawlers have been allowed in from outside to do damage to the seabed and to the shoals of fish that we once had. The quota system has not really worked because of the discard policy.

It would be easy to design a UK fishing policy through which we would have both more fish to eat and we would take fewer fish out of the sea. We would do that by not having the discards. It would also be easy to design a policy in which the fish was landed in the UK, so that there would be more economic benefit for us in processing and selling it on, and in which we would have much more capacity in the English and the Scottish fleets so that we could capture more of the added value. I look forward to the Secretary of State publishing a detailed strategy and offering us draft legislation, and I look forward to the Scottish National party supporting that legislation, because it must know how important the recovery of our fishing industry is.

[Peter Dowd]

I know that Mrs Thatcher was a great heroine of the right hon. Gentleman. She said:

“Just think for a moment what a prospect that is. A single market without barriers—visible or invisible—giving you direct and unhindered access to the purchasing power of over 300 million of the world’s wealthiest and most prosperous people.”

It is now 500 million. Was she wrong at the time?

[John Redwood]

Mrs Thatcher was not always right. As her chief policy adviser, I gave her extremely good advice on the single market, which she did not actually accept. She took most of my advice on a lot of things, but I told her not to give the veto away—it was not worth it, because we needed to keep control of our own law making. However, the Foreign Office was more persuasive than I was, and that was where things started to go wrong. We were tricked into accepting what she hoped—and what a lot of British people thought—was just going to be a free market where there were fewer barriers for trade.

What actually happened was that we were entrapped in a massive legislative programme, which meant that more and more controls—often of an anti-business nature —were imposed, even when the UK did not want them and even when we had voted against them, when we were in the minority. That is why many British people fell out of love with the Common Market that they thought they had voted for in the early 1970s; they thought that it would just be about more jobs and more trade, but discovered that it was about the EU taking control. I am afraid that, on that occasion, Margaret Thatcher was less than perfect. She did not choose the right advice to follow. If she had vetoed the loss of the veto, the hon. Gentleman might have had his way and we would still be in the European Union with a rather different relationship from the one that we were forced into taking.

I turn now to the energy industry. Under European rules we were trapped in a common European energy policy, which meant that we went from being entirely self-sufficient in energy to being quite heavy importers. There is a wish to make us more and more dependent on imported electricity and gas through interconnectors with the continent, meaning that we have less security of supply and are more dependent on the good will of many people on the continent—ultimately, on Russian good will, because of the importance of Russian gas to the energy supply on the continent. Fortunately, the situation has not gone damagingly too far, and we can rescue it when we come out of the European Union. Our gas supplies can be much more dependent on Norway and Qatar, which are not members of the European Union. That is a useful precaution because we can trust those suppliers and the supply will not be subject to the same common problem that might arise in the European system.

We need to be careful about the framework of regulation. I am all in favour of cleaner air and looking after the environment, but the rapid and premature closure of coal power stations before we have good, reliable alternatives puts us in a bit more jeopardy. We have already experienced cold days, when there is big industrial demand but very little wind; it is extremely difficult to balance the system and keep up the full amount of power that people want. We may have to go on to industrial rationing in some cases. If we follow European policy and shut all the coal stations without having proper, reliable alternatives in place, running a good industrial strategy will be that much more difficult.

What would I put at the top of my list for a good industrial strategy? My No. 1 need would be a plentiful and cheap supply of energy. Having had jobs that involved running factories and dealing with transformation materials that have a high energy content, I know the importance of reliability and relatively low price for running certain kinds of process industry. The United States are now reindustrialising because they will have access to a lot more cheap feedstock and fuel as a result of their drive to have much more domestic energy, at a time when we have been going in the other direction by becoming more reliant on other systems that are not reliable and on imports. We are now finding that we are becoming short, and our power—certainly at peak demand—can be extremely expensive unless people have a long-term contract that properly protects them.

I urge Ministers to use the opportunity to rethink our energy strategy, and to put it at the top of the list for the industrial strategy they tell us they want, because it is the No. 1 requirement for a strong industry across the piece. The other day I was talking to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who reminded me just how important cheap and readily available gas is to the Potteries. We want those industries to grow and flourish—I used to be involved in them a bit—and there is huge scope for that, but it will require a sensible, UK-based energy policy.

I turn next to the vehicle industry, which I think will be just fine. It has been built, with a lot of foreign investment and local talent, into a very fine industry. But we need to remember its exact shape. The UK has the capacity to make about 1.7 million cars per annum, but it has the capacity to build 2.7 million engines. Last year 1 million of those engines were diesel. Successive Governments have done a good job of persuading large motor and engine manufacturers to come to or expand in the UK. We now have a centre of excellence in diesel engine technology, and engine production generally, for passenger cars and light vans. We should be rightly proud of that, but it is important that the Government understand this achievement and do not do things that inadvertently damage it.



Car sales continued to rise very nicely after the Brexit vote. We experienced a very strong market and there was a good trend of car sales in the UK for the first nine months after the Brexit vote, as was happening before. But in spring last year there was a sharp reduction, which has continued. Why has this happened? Well, it is nothing to do with Brexit. It is to do with policy decisions taken in the United Kingdom. Three things happened at the same time.

First, it was decided that too many car loans were being advanced, so there was a restriction on car loan credit. I think we worry too much about that. There is security: people who get car loans usually have reasonable jobs and incomes. I am pleased to say that we are not looking at a set of job losses any time soon, so I cannot really see the big problem. Secondly, there was the imposition of much higher vehicle excise duty, particularly on higher-value cars, which are particularly profitable and successful to make.

Thirdly, of course, there were the general arguments that diesel is no longer acceptable. Diesel technology in this country, and through European regulation, has reached much higher standards of cleanliness and control of exhaust. As far as we know, all these engines are more than meeting the legal requirements, because we all want cleaner air. But if the idea gets abroad that all these standards are actually going to be tightened very quickly, or that it is going to become unacceptable to run a diesel engine, it puts people off buying. There has therefore been a big collapse in support for diesel engines and cars, which explains the pattern in that market. I hope that the Government will look at a sensible compromise. Yes, we want clean air, but we also need to say and do supportive things for what is now a very important industry in our country.

There is huge scope for farming. The Secretary of State has made a start with his White Paper, but it still of a fairly high level of generality. I look forward to more detail soon. The motif of the policy must be that we can and should grow more for ourselves. In the early days after we joined the European Community, we were about 95% self-sufficient in temperate food, which is the kind of food that we can produce; we are now under 70% self-sufficient. We import a lot of food from the Netherlands and Denmark—countries with similar climates to our own—and quite a lot from Spain, which produces some things that we cannot grow for ourselves, although we could buy cheaper alternatives from South Africa or Israel if we were allowed to do so. We need to look at all that and do a better deal for the lower-income countries that can sell us food that we cannot grow for ourselves without the same kind of tariff barriers. We also need to do a lot more work on how we can grow more of our own food.

[John Redwood]

There is still quite a large number of net inward migrants to this country. I look forward to higher wages and more automation. All these problems are perfectly soluble. There are now some good automatic systems for picking produce, if people do not want to do those jobs. I hope that there will be more productive ways of employing people so that they can be paid more—for instance, if they work smarter and have more technology to support them. That would be good for the employee and for the farming business. Some of this is about scale and some is about investment.

I hope that we develop a farming policy that still provides public money to support farms sensibly, but that will be more geared to the production and successful sale of food, particularly domestically. We want fewer food miles on the clock and rather more local produce. I hope that the policy will allow and encourage more agricultural businesses in the United Kingdom to add value to the product coming from the field, shed or farm, because that is an important part of developing a prosperous and more successful economy.

The UK has enormous scope in sectors such as the media because we have the huge advantage of the English language. We largely share that advantage with the United States of America, which is also very good at media and internet-related businesses. I look forward to the tech revolution being an important part of our better-paid jobs and in the increase in jobs in the future. Once we are out of the EU, we will also be able to choose our own tax and regulatory regimes. I trust that we will choose a best-in-class, world-leading regime for both tax and regulation. Although I understand some of the irritations that the EU and others have with existing large technology companies, it is important that we also understand how phenomenally popular their services are, how hugely important they are as wealth generators, the choice they offer customers and the new jobs that they will create. We therefore need a tax and regulatory regime that is fair and is not part of a trade war between the EU and the United States of America, which seems to be developing at the moment in an unfortunate way.

Infrastructure is very important. One thing that perhaps unites the House is that we would all like more investment in infrastructure, although we then have disagreements about pace, style, and ways of financing it. There is huge scope for more infrastructure in this country. If we wish to take advantage of our greater freedoms and the kinds of business developments I have been sketching in different sectors, we will certainly need a lot more capacity in road and rail. Rail capacity can be increased more cheaply and more rapidly if we go over to digital controls. One of the features of our railway system is that we run very few trains an hour on any given piece of track. With better controls, we could increase the number of trains we ran on existing track—a quicker and cheaper solution than having to build lots of new tracks.

We are going to need improved road transport. Internet styles of purchasing require road capacity for all the van deliveries that will be made when people have bought on the web. Road capacity is also needed for those who still like going to a traditional shop and expect to find somewhere to park when they do so. Only the shopping centres that have really good access and really good parking are likely to flourish in today’s world, because people naturally want convenience. I trust that the Government will find sufficient public capital support for these necessary programmes, but will also be imaginative in finding new ways of harnessing private finance where that is appropriate, as it clearly is in areas like energy and communications where there are defined revenue flows that should be financeable through the private sector.

The aim of Brexit is to cheer the country up, to get wages up, and to get jobs up. So far it is all going reasonably well. There are more jobs after the Brexit vote, despite the false forecasts. Pay is going up a bit. We would like more improvement in real pay, and it is good to see some moves being made in the public sector. The big Brexit bonuses we want comprise spending our own money and knowing when, how much, and what we are going to get for it; having a fishing policy that makes sense both for British fishermen and for British fish; having a better agricultural policy that means we can grow more of our own food; and having an energy and industrial policy that supports more investment and more growth.

[Peter Dowd]

The right hon. Gentleman is an advocate of a united kingdom, especially as we are coming out of Europe, but there is the vexed question of Northern Ireland. How does he see that fitting in with his vision for the future? It is very important for Northern Ireland, as part of our UK economy, to understand where he is coming from on this matter.

[John Redwood]

I trust that Northern Ireland, as part of the United Kingdom, will benefit from the economic policies I have been describing. It is the settled wish of a majority in Northern Ireland that they stay part of the United Kingdom, and they are very welcome. If the hon. Gentleman is referring to the alleged difficulties regarding the border, I simply do not think that that is a serious, real problem. It is obviously a political problem because the EU wishes to make it so, but the EU needs to understand that this border is already a complex one. When goods are being moved either way between the Republic of Ireland and Northern Ireland, there is a currency change to be effected, and there are different incidences in excise rates, VAT, income tax and corporation tax levels on each side of the border. Yet we do not have a man or a woman at the border stopping every truck and working out the sums on what has to be done on the excise tax or the currency, because that would be ridiculous. If we end up with World Trade Organisation-based trading so that there do have to be tariffs at the border, it is no more difficult to calculate the tariff electronically and charge it away from the border than it is to charge the excise and the VAT at the moment. We know how to do it; it is not that complicated: we live in the electronic age. I can see that Labour Members want to live in the pre-computer world and do not think that we can send data electronically, but I assure them that it is a magical development.

[John Redwood]

The hon. Gentleman has been here long enough to know that all parties have always agreed that we keep the common travel area with the Republic of Ireland. That has always been a given. It was not dependent on the EU in the first place, and everybody wants to keep it.

Let us deal with the question of our UK external border, wherever it may be, and the issue of migration. Yes, the British people voted to have more controls over the number of people who come to work and settle here. The Prime Minister has promised on several occasions that she will get the net migration total down to tens of thousands from the quarter of a million-plus we have been experiencing each year, and I wish her every success with that. We do not need new hard border checks because, as I understand the way that thinking is going in the Government—the way I encourage it to go—we just want to control two things. We want to control the right to work through a work permit system and we wish to control the entitlement to benefit by making sure that people are properly qualified for it. That does not require big controls at the border. Anybody is welcome to come as a tourist, to come and spend their own money, and to come and invest. That is not what we are trying to stop. We can control the things we wish to control through a work permit system and through a benefit system.

[Peter Dowd]

I am listening carefully to the right hon. Gentleman, if only out of a sense of morbid curiosity, with regard to how he is going to explain practically the situation in Northern Ireland. We have heard a lot of abstract ideas; we need practical solutions. It is incumbent on him to give us a serious, practical way forward in relation to that problem, which is very serious, notwithstanding what he says.

[John Redwood]

I do not agree. It is already a complex border. There are already anti-smuggling arrangements. There are already methods that satisfy those on both sides of the border as regards the possible passage of criminals and so forth. All those things will stay in place. They are not made that much more complicated by our leaving the EU. The Republic of Ireland is not part of Schengen; it does not have those special arrangements that the rest of the EU has, so this is making a mountain out of a molehill. Indeed, I do not think it is even a molehill. I just do not understand why serious people can think that it is a serious issue. I understand why political people want it to be an issue—because they want to extract a price from the United Kingdom, as if we had not already offered enough in the interests of friendly relations, in due course, with the European Union. I assure Labour Front Benchers, who are meant to be pro-Brexit and have a lot of pro-Brexit voters, that I cannot see any extra complication that cannot be solved by a bit of electronics and the development of what we already have, because it is already quite a complex border.

There are huge opportunities. If we take advantage of these freedoms, we can boost our growth rate. I have shown how we can do that in a few individual sectors. I have shown overall how we will do it by spending our own money, and explained how we have a huge opportunity to rein in some of the excessive imports we are taking in at the moment by replacing them with home production. We can do many good trade deals around the world to extend and improve our trade with the rest of the world, which is already good, growing and flourishing despite tariffs and WTO terms: we know how they work and they work just fine. I just say this to the Government: let us get on with it; let us not make any more concessions; and let us make sure that if we do end up with a deal, it is a deal worth having.

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[Giles Watling (Clacton) (Con)]

It is an honour to follow the hon. Member for Peterborough (Fiona Onasanya), and I do so with good heart, because although Tendring District Council has experienced year-on-year revenue support grant reductions, we are flourishing and have not cut one frontline service. That can be done; we are a lean, mean administration machine.

Unlike the hon. Member for Bootle (Peter Dowd), I recognise that it is springtime and our economy has gone beyond green shoots. The financial sap is positively rising: unemployment is at a near record low; the deficit is down; and there is more investment in our vital public services, including £4.2 billion for our NHS. That means that the “Agenda for Change” staff in England are to receive a pay rise of at least 6.5% over the next three years. As the Secretary of State for Health tweeted yesterday:

“Rarely has a pay rise been more deserved.”

I thoroughly agree.

I was delighted to hear in the spring statement that there may be capacity for further increases in public spending and investment in the years ahead. Of course, that would be done while continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted. It is therefore good news that the most recent forecasts of the Office for Budget Responsibility suggest that economic improvements will be maintained. It is also clear to me that the economy is already beating the forecasts and correcting the naysayers, and I have no doubt that it will continue to grow, create jobs and beat those expectations after we leave the European Union. This is a time to celebrate those improvements, not talk them down, which can only do damage to our prospects.

I was also pleased to hear the OBR’s projections that following Brexit our payments to the EU will be £4.9 billion lower in 2025 than they are today. Consequently, I maintain that there will be opportunities to spend in both the short and the medium term, which brings me neatly on to the question of where that money should be spent.

I believe that some of the money should certainly be spent on business and infrastructure. In a previous life, when I was Tendring’s cabinet member for regeneration and inward investment, I saw at first hand how support for businesses and infrastructure can pay tremendous dividends for economic growth. At the core of all that is the need not just to make cash available, but to make sure that it is spent in a timely and appropriate manner, and used to build infrastructure for future growth. It is a question of i before e—infrastructure before expansion.

In my previous role, I made grants of up to £150,000 available to businesses in Tendring so that they could grow, flourish and create new jobs in manufacturing, engineering, energy, low-carbon, maritime, and research and development activities. That cash came from the Tendring District Council small and medium-sized enterprise growth fund, which I introduced. We could move quickly and effectively, and therefore grow a great reputation as a business-friendly council. Moreover, being a district that very much marketed itself as open for business meant that we turned heads towards our glorious sunshine coast.

For example, with £16,000 from our growth fund, we managed to attract the Lampshade Company, a bespoke shade manufacturer, to our patch. We also got Ball Launcher with a £70,000 grant. It makes a football launching device to train players—very topical. When it came, it brought jobs with it, and that happened because Tendring was a council that was out there touting for business. Those are examples of committing cash for infrastructure. Business gets excited and then wants to work with us and to invest—it is a win-win situation.

That is why, like my right hon. Friend the Member for Witham (Priti Patel), I regularly use my position in this House—I am sure that many hon. Members have noticed this—to call on Ministers to spend more on roads and rail for Clacton and the east coast to address the fact that it takes far too long to commute from Clacton to the capital. The distance is only 70 miles, but the journey takes nearly one hour and 40 minutes by train. If we cut that journey time to closer to an hour, we would regenerate the east of Essex at a stroke.

It will come as no surprise to hon. Members that I ask the Chancellor to consider diverting some of the Brexit dividend to Clacton’s much overlooked infrastructure. Investment should be delivered locally, to unlock the economic potential of communities such as Clacton; regionally, to improve connectivity between our economic hubs, including through the improvements to the A120 that we have long called for; and nationally, to rebalance our economy. Crucially, that investment will not only attract business, but upgrade the UK’s infrastructure and underpin the Government’s modern industrial strategy, which is good for our economy and our country.

It would be remiss of me if I did not ask, during this period of strong economic development, that the Chancellor listens to the representations of my right hon. Friend the Defence Secretary and ensures that our military gets the £2 billion a year it needs to deal with constant and growing threats, and rising equipment costs. I am a member of the armed forces parliamentary scheme, and I have worked closely with our military personnel, who do an exceptional job in difficult circumstances. As a result, it has become clear to me that while our forces are, on the whole, superbly equipped, they need serious support to enhance their capability. It is imperative that those hard-working, brave men and women feel valued and supported.

Following our success in removing the cap on the police precept, I have no doubt that the Government fully support our hard-working local police forces, for which I am incredibly grateful. I would, however, now ask that the Government use some of the Brexit dividend to do the same for our valiant and professional armed forces.

[Peter Dowd]

If I visited Clacton and then decided to go across the water to the continent, would the hon. Gentleman think that my new blue passport should be made in Britain or in France? Will he give me a bit of advice on that?

[Giles Watling]

I can give the hon. Gentleman some great advice, and one of the first pieces of advice would be that he comes to Clacton. It is one of the most beautiful places in the country. We have 36 miles of unspoilt coastline, some of the greatest beaches and great backwaters. I am very proud of my passport—I have it with me now—and if it is blue, let us make sure that we get the best value for money in the printing of the things.

[Peter Dowd]

I am absolutely delighted by the hon. Gentleman’s invitation to Clacton—I am more than happy for us to compare our diaries—but he really should answer my question: does he think that my new blue British passport should be made in this country or by the French?

[Giles Watling]

I draw the hon. Gentleman’s attention to the fact that I did answer his question—I said that we have to get the best deal possible. We are still a member of the EU, with its rules and regulations in place, and we have to look for the best possible deal. I would prefer that we made everything in Britain, but we cannot go down that road.

I am certain that the hon. Gentleman will remember that not that long ago—in 2010—the drawer had no money left in it. Well, we are filling it up again, and we must never again leave it in the hands of those who might want to empty it and impoverish our nation, damage our economy and hurt those least able to help themselves. This period of economic growth presents us with funding opportunities, and I hope that the Chancellor will make the best use of those opportunities by investing in our infrastructure, which will attract new business to participate in the Great British economy.

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[Kirstene Hair (Angus) (Con)]

It is now nearly eight years since Labour left this country in the grips of an economic crisis, and it is undeniable that we have come a long way since then. Unemployment is now at lows last seen in the mid-1970s, and not even in the years before the last recession were so few people out of work. Indeed, we used to debate whether such low unemployment rates were even possible in a modern economy and whether “full employment” these days means simply a higher level than it used to be.

Under this Conservative Government, we have proved the doubters wrong. Our economic policies, such as cutting corporation tax from 28% to 19%, have spurred job creation, and our welfare policies—in particular universal credit—have stopped the scandal of people being punished by the benefits system for entering work or increasing their hours.

Employment is not the only area of success. The UK’s economic growth continues to outperform expectations, and the £154 billion a year deficit that Labour left us with has now been cut to just £45 billion. Conservative policies have cleared up the mess left behind by Labour and brought prosperity back to Britain. That makes me all the more angry and disappointed that, thanks to SNP misrule, Scotland is not fully sharing in that prosperity. The story of Scotland under the SNP is an outrage in itself, but it is also a cautionary tale about what the SNP would do to Scotland if it achieved its dream of independence and about what a hard-left Labour Government, propped up by Scottish Labour and the SNP, would do to Britain.

Scotland’s economic growth has been well below 1% for two years in a row, while the rest of the United Kingdom races ahead. Once population growth is accounted for, Scotland is hardly growing at all. Even more shocking is the fact that the Scottish Fiscal Commission expects that stagnation to continue, until growth finally limps above 1% in 2022. That would mean six consecutive years on the brink of recession—a malaise the likes of which we have not seen in 60 years.

[Peter Dowd]

We heard the right hon. Member for Wokingham (John Redwood)—

[David Linden]

Where is he?

[Peter Dowd]

Where is he indeed? We heard the right hon. Gentleman completely distance himself from Mrs Thatcher, which is an achievement in itself. I now give the hon. Member for Angus (Kirstene Hair) the opportunity to distance herself from Mrs Thatcher’s policies, which saw mines and shipyards closed down and industry completely decimated in Scotland. Will she apologise for that?

[Kirstene Hair]

I thank the hon. Gentleman for his intervention, but I am most concerned about the Labour leader, the right hon. Member for Islington North (Jeremy Corbyn), leading Britain.

The Salmond-Sturgeon era is turning into a dark period in Scotland’s history. Let there be no doubt that the blame for Scotland’s stagnant economy lies squarely with the SNP, which has made Scotland the most taxed part of the United Kingdom.

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[Vicky Ford]

Is it now the largest ever? I thank my hon. Friend.

Those are phenomenal targets, ambitions and spending, but they are coupled with specific, targeted actions to unlock some of the most innovative sectors. It has been great to be in the House when we have been discussing how to unlock investment in the next generation’s batteries so that we can get the automated vehicles sector up and running and leading the world. My constituency is the home of radio. The first ever radar messages were sent out to the world from Chelmsford. The Space Industry Bill will mean that this country can not only make satellites and be part of their manufacture, but actually launch them.

I also spoke about productivity in my maiden speech, because it is key to our success. I said then that the people of Chelmsford spent too much time sitting in traffic jams and waiting for delayed trains, that it was a waste of their personal time, and that it hit the nation’s productivity. I was so pleased yesterday when the Government identified 44 parts of the country that would receive a further £4.4 billion of investment in our roads, railways and infrastructure. My part of Essex is a key element of that. The infrastructure in which the Government are investing will help not just to deliver new housing for the future, but to unlock our productivity and enable people to get on with their lives.

I want to say something about taxation, because it is part of the big picture of how we get the economy working. Under the last Labour Government, I was working as a volunteer chairing the local free school. I recall one of my best members of staff coming to me and saying that she had to hand in her notice because she simply could not afford to work any more: she would be better off claiming benefits. Ensuring that the tax system works for those who are on the lowest incomes, and ensuring that work pays, has been key to the Government’s success. That is why I am so proud that 4 million people have been taken out of tax altogether, and 24 million, I believe—the figure may have increased—have benefited from tax cuts. The tax gap has in fact narrowed, and those on the lowest incomes are now paying the lowest tax, with those on the highest paying more.

[Peter Dowd]

Does the hon. Lady agree with the leader of Chelmsford council, Councillor Roy Whitehead, who said that the Government cuts to education were short-sighted?

[Vicky Ford]

I agree with my council leader in so many ways, but the leader of Chelmsford City Council is not responsible for the education budget; that is covered within the Essex County Council area, where more frontline delivery of children’s services is happening every year.

On the issue of tax, it is vital to remember that it is this Government who have made sure that the wealthier pay the largest share of tax, and the top 1% of earners are paying more tax than ever before.

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[Robert Jenrick]

Our priority is to ensure that younger people in the workplace gain the skills that they need in good and secure employment and then, in time, they will benefit from the living wage, which did not exist before this Government created it. We have increased the personal allowance; we have taken 4 million British people out of tax altogether; and we have reduced the tax of 31 million of our fellow citizens.

On the subject of fair taxation, which was raised, the top 1% are paying 27% of the income tax in this country. On the subject of enforcing tax and reducing avoidance and evasion, the tax gap in this country is at its smallest ever level. It is one of the smallest of any developed country in the world and it is certainly smaller than the previous Labour Government left it. The bottom 20% of earners—this is an important statistic—have seen real wages increase by 7% since 2015. We have high levels of employment and we are working hard to support the lowest paid in society.

Thirdly, we have addressed productivity by investing in skills to ensure that our workers and fellow citizens have the skills that they need for the jobs of the future. We have seen that in many of the measures that we have discussed today: in increasing vocational and technical education; in our apprenticeships; in the advent of T-levels, one of the greatest innovations in our secondary education system since the creation of the A-level; in increasing numeracy and digital skills in schools with maths teachers, with IT teachers and with coding at primary level; and in the creation of the national retraining partnership—a partnership between the Government, the private sector, the CBI and the TUC, which was launched last month by the Chancellor—to ensure that workers have the skills that they require as the world of work changes in the years to come.

For small businesses and family businesses, we have increased management training and skills training, so that the greatest innovation in our economy is diffused throughout the regions and to the smallest businesses, we are backing people such as Sir Charlie Mayfield with his Be the Business movement, and we are undertaking a review of the long tail of British businesses, which was announced by the Chancellor in the spring statement. All of that will help to ensure that productivity increases in all parts of the United Kingdom and in all parts of the economy. What are the early results of those efforts? We have 2 million more children in good or outstanding schools than in 2010.

Fourthly, addressing productivity also requires us to invest in our infrastructure. The level of infrastructure investment—both public and private—by the end of this Parliament will be greater than at any time since the 1970s.

[Peter Dowd]

I thank the hon. Gentleman for mentioning my constituency earlier. I would like to mention his if he does not mind. Roger Blaney, the leader of Newark and Sherwood District Council, was speaking in response to a report that ranked the district near the foot of the social mobility league table. He put Newark and Sherwood

“323rd out of 324 local authority areas based on factors such as education outcomes, employability and housing prospects.”

Does the Minister still think that he is doing a good job for his own area?

[Robert Jenrick]

I most certainly do. That report revealed decades of underinvestment and neglect by Labour councils in Nottinghamshire, which let down their old former coalfield communities—the communities that they have taken for granted for too long. We are changing that, and the policies of this Government have seen, in my constituency, 40% more young people in good or outstanding schools, and a new free school in Newark, which I have created and of which I am proud to be a governor. Those are the practical changes that will transform the lives of local people. In the midlands and the north, we do not take them for granted; we get things done for them.

We are making long-term investments in infrastructure —road, rail, broadband and mobile—in all parts of the United Kingdom. The Infrastructure and Projects Authority, which measures our spending in those areas, said that there will be more central Government investment in the north of England over the course of this Parliament than in London or the south-east. We have created a pipeline of £600 billion of investment in construction and other infrastructure. The challenge now is less about money and more about ensuring that we have the construction workers and skills that we need to deliver on those projects. We are backing the midlands engine, the northern powerhouse and the Oxford-Milton Keynes-Cambridge opportunity. We are creating new deals in Sheffield, hopefully in the borderlands between England and Scotland, in north Wales and in other parts of the United Kingdom, where we believe in allowing local people to have greater say over their own lives. The Mayors whose positions we created—including Andy Street and, in the Tees Valley, Ben Houchen—are already making a huge impact and putting their own areas on the map.

Fifthly, we are embracing new technology, not turning away from it. We want to ensure that the United Kingdom leads the world in the technological revolution, but we also want to ensure that that works for everyone as the world of work changes profoundly. The pace of change has never been faster, but it will never be so slow again. The tech entrepreneurs and investors I meet are not preoccupied by Brexit. Their eyes are fixed on the horizon and so are ours. This is true of companies in FinTech, life sciences, artificial intelligence, autonomous vehicles and electric cars, and green growth, all of which we are taking seriously in our industrial strategy and in other policies. At least 15 UK tech companies could float today for in excess of $1 billion—companies that did not exist five or 10 years ago, including Citymapper, Deliveroo and Farfetch. This country is on the cusp of something great and we do not want the Labour party to lose that.

[Peter Dowd]

Does the Minister agree with Councillor Blaney that his constituency is the “Cinderella of regional funding”? What is he doing about that?

[Robert Jenrick]

Well, we have been investing in all parts of the United Kingdom, including the east midlands. We created the midlands engine, which I just mentioned and which is designed to unleash the economic potential of the midlands. In the west midlands, we have seen the huge potential that Andy Street has now given to a city that has been run by the Labour party for too long.

What are we doing to invest in new technology? As my hon. Friend the Member for Chelmsford (Vicky Ford) described, we are investing more in research and development than has been invested since the 1970s, when the statistics were first recorded, so we are probably investing more than has ever been invested in modern times. We have made the R&D tax credits more generous. We are investing in the enterprise investment scheme and the entrepreneurs’ relief that are so important to crowd in investment to the United Kingdom from all over the world. The Chancellor is today at the FinTech summit that the Treasury is hosting, with 600 investors from all over the world coming to the United Kingdom to see some of our most exciting business that are creating 60,000 new jobs in the FinTech sector alone.

What have we done to create a business environment? We have lowered capital gains tax and corporation tax, and committed to lowering it still further. Labour would reverse those changes. Our reductions in corporation tax have actually resulted in more tax revenue for the Treasury and more money for public services. That is prosperity over ideology.

Leaving the EU: UK Ports (Customs)

Peter Dowd Excerpts

Monday 19th March 2018 Commons Chamber

[Mel Stride]

We have made it clear that once we have exited the implementation period, the European Court of Justice will have no further remit. We will take back our laws, to be determined by our courts at every level, including the Supreme Court.

[Peter Dowd (Bootle) (Lab)]

I reaffirm what my right hon. Friend the Member for Leeds Central (Hilary Benn) said earlier. On Thursday night, the Secretary of State for Transport promised a Dover studio audience that there would be no customs checks on goods vehicles passing through UK ports following our exit from the European Union. The Minister dodged every question that my right hon. Friend asked, but I will give him another opportunity to answer some of them.

It stands in complete contradiction to the Government’s wider position that, unlike Labour, they will not seek to form a customs union with EU member states after the transition period. Will the Minister confirm that it is now Government policy to discard protections on goods travelling into the country through a customs union while also refusing to check goods vehicles as a requirement to entry? Will he explain how tariffs will be applied and enforced without goods vehicles being checked by customs officials? Surely that would be in breach of World Trade Organisation rules—unless he knows something different. Can he give a single example of a nation that does not rely on either a customs union agreement or customs enforcement at its border? What are the Government’s plans to manage our trade relationships, to protect our own producers and to uphold environmental protections without either a customs agreement or border enforcement?

We all thought that the Government’s “cake and eat it” Brexit strategy was wildly misguided, but they now seem to have put us into a worse position that even fails to meet the low bar set by the Brexit Secretary when he committed to avoiding a “Mad Max-style”, “dystopian” Brexit. The Minister must set out clearly which of the options the Government are going to choose. Is it a customs union, as proposed by Labour, or goods checks at the borders? Or is it neither, as his Cabinet colleague has promised? For the sake of business confidence and planning, and of economic stability and continuity, will the Minister please ask the Chancellor to do us a favour and get to grips with the Government’s hokey-cokey Brexit policy, and tell the Transport Secretary—in the Defence Secretary’s words—to “go away” and “shut up”?

[Mel Stride]

Well, we waited a long time to get to the end of that, and I am not sure whether we are any wiser as a consequence.

As the hon. Gentleman will know, we are leaving the customs union, and I set out in my opening remarks the two models that we are intent upon progressing with our European partners. I also stressed that we will arrive at a solution that is as frictionless as possible. I have been down to Dover to meet the organisation that runs the port, and also the Border Force personnel who are engaged with it, and I am fully familiar with the importance of a frictionless border. Of course, the other important news that we have had today is that we have concluded, subject to the European Council meeting this week, an implementation period for the arrangements, which will not only give us additional valuable time to provide certainty to businesses, but ensure that we have all the arrangements in place for a successful customs system going forward.