Oral Answers to Questions Debate

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Department: HM Treasury

Oral Answers to Questions

Lord Hammond of Runnymede Excerpts
Tuesday 22nd May 2018

(5 years, 10 months ago)

Commons Chamber
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Huw Merriman Portrait Huw Merriman (Bexhill and Battle) (Con)
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11. What steps he is taking to support businesses and entrepreneurs.

Lord Hammond of Runnymede Portrait The Chancellor of the Exchequer (Mr Philip Hammond)
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One year on from the appalling Manchester Arena attack, I am sure that I speak for everyone in the House in saying that on this day our thoughts are with those who lost their lives and their families, and those who suffered life-changing injuries. We will remember them with a minute’s silence later today.

The UK’s 5.7 million small businesses make a vital contribution to our economy, employing 60% of the private sector workforce, and the Government are determined to facilitate their success. We are keeping taxes low and ensuring that firms can access the support that they need to thrive. Following the patient capital review, we are expanding the tax reliefs available to entrepreneurs that will support them in growing their businesses, and we have launched a patient capital action plan to unlock £20 billion of funding to help high-growth firms to reach their potential.

David Amess Portrait Sir David Amess
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Will my right hon. Friend confirm that he will not raise taxes on small businesses, and will he share with the House what help the Government will give to entrepreneurs who are setting up for the first time, with particular regard to the business rate?

Lord Hammond of Runnymede Portrait Mr Hammond
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We have already introduced business rate concessions to reduce the burden of rates on small businesses, including by bringing forward by two years the switch in indexation from the retail prices index to the consumer prices index. We are ensuring that Britain is the world’s leading place to start and grow a business, including through reducing corporation tax rates. There are almost 7,000 small businesses in Southend-on-Sea alone, and this Government back them every step of the way. I can tell my hon. Friend who will raise taxes on small businesses, and has said so publicly: he is sitting opposite me.

Huw Merriman Portrait Huw Merriman
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In the rural and coastal parts of east Sussex that I represent, infrastructure delivery is key to bringing more businesses and entrepreneurs to the area. What plans does the Chancellor have to continue investment in road, high-speed rail and broadband connections so that we can attract more businesses to rural parts of this country?

Lord Hammond of Runnymede Portrait Mr Hammond
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The national productivity investment fund is investing in all those areas. We have the biggest rail investment programme since Victorian times and the biggest road building programme since the 1970s, and we are investing in superfast broadband, which is critical to this country’s future. As my hon. Friend will know, in his area we are investing in the A21, and we are working with Network Rail on exploring options for connecting HS1 services to Hastings via Ashford International.

Barry Sheerman Portrait Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
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Surely the Chancellor knows that the thing holding back most businesses—small, medium-sized and large—is the lack of good skilled people to work for them. When is he going to give the Secretary of State for Education a good shaking and make him do something about the apprenticeship levy, apprenticeship schemes and the higher education graduate apprenticeship scheme?

Lord Hammond of Runnymede Portrait Mr Hammond
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The hon. Gentleman is right that skills are a critical factor for business in an economy with such high levels of employment and low levels of unemployment as we have achieved. We are investing in apprenticeships with the new apprenticeship levy, providing funding for more and better apprenticeships; we are investing in T-levels, improving substantially the level of technical training for 16 to 19-year-olds; and we are reviewing the operation of tertiary education funding.

Sarah Jones Portrait Sarah Jones (Croydon Central) (Lab)
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Marks & Spencer is closing 14 stores, affecting hundreds of jobs, and Debenhams and House of Fraser would be doing the same were it not for their longer lease commitments. The nature of the high street is changing, and the risk is the loss of hundreds of thousands of jobs. What are the Government doing about this, and will the Chancellor consider meeting me and businesses in Croydon as we push ahead for a new Westfield shopping centre in what is undoubtedly a difficult environment?

Lord Hammond of Runnymede Portrait Mr Hammond
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The hon. Lady correctly identifies the underlying problem: the nature of retailing is changing. Britain is leading the world in the adoption of online retail, which has huge opportunities, but will also bring huge changes. This is a microcosm of the changes we will face in this economy over the next 10, 20 or 30 years, as the digital revolution changes fundamentally the way we do business. The answer is not to try to resist change, but to embrace it, and to make sure that we train our people so that they can take up the new challenges and have the new opportunities that this economy will bring.

Helen Whately Portrait Helen Whately (Faversham and Mid Kent) (Con)
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20. Microbusinesses are a great British success story, with thousands of new businesses set up around people’s kitchen tables, but many are struggling with regulations and tax changes that are intended to constrain the actions of big business. Will my right hon. Friend advise us what steps he is taking to make sure that he controls regulation and reduces tax burdens affecting microbusinesses?

Lord Hammond of Runnymede Portrait Mr Hammond
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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 Portrait Peter Dowd (Bootle) (Lab)
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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?

Lord Hammond of Runnymede Portrait Mr Hammond
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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 Portrait Peter Dowd
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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?

Lord Hammond of Runnymede Portrait Mr Hammond
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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.

Trudy Harrison Portrait Trudy Harrison (Copeland) (Con)
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2. What progress the Government have made on supporting families with the cost of living.

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Alan Mak Portrait Alan Mak (Havant) (Con)
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8. What fiscal steps he is taking to support firms harnessing new technologies.

Lord Hammond of Runnymede Portrait The Chancellor of the Exchequer (Mr Philip Hammond)
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The Government are committed to helping firms to harness the benefits of new technologies, and we are taking action to do so. For example, we have set the annual investment allowance at £200,000 a year, its highest-ever permanent level; we have announced a 10-year action plan to unlock more than £20 billion to finance growth in innovative firms; and we have delivered the biggest increase in research and development investment in 40 years.

Alan Mak Portrait Alan Mak
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Britain is becoming a world leader in technology businesses at the cutting edge of the fourth industrial revolution. Will my right hon. Friend ensure that our tax system remains competitive, to maximise the support that we give to our business entrepreneurs?

Lord Hammond of Runnymede Portrait Mr Hammond
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Yes. I congratulate my hon. Friend on his commitment in this regard, especially in his role as chairman of the all-party parliamentary group on the fourth industrial revolution. Science, research and innovation are areas in which the UK has huge strengths. Our challenge is to provide the right environment—including the right tax environment—to ensure that that potential stays in the UK, and is developed here. We have introduced a range of incentives through the tax system, such as R&D tax credits and entrepreneurs’ relief, as well as the lowest corporation tax rate in the G7.

Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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Given that Northern Ireland is the cyber-security centre of the UK, what steps is the Chancellor taking to provide tax relief to encourage global businesses to consider using Belfast and other equipped cities as their bases?

Lord Hammond of Runnymede Portrait Mr Hammond
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We have a globally competitive offer for businesses seeking to locate in the United Kingdom, and, of course, Northern Ireland will have corporation tax flexibilities of its own in due course. However, we seek to make all parts of the UK attractive to foreign direct investment, and Northern Ireland has done extremely well from that.

Robert Courts Portrait Robert Courts (Witney) (Con)
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Will the Government please explain what is being done to help firms in places such as west Oxfordshire to harness 5G and broadband, making them more competitive, making them raise more money, and creating the capital that will enable us to fund the public services that the Labour party wants to overthrow?

Lord Hammond of Runnymede Portrait Mr Hammond
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This is partly about public investment and partly about private investment to encourage the roll-out of full-fibre broadband technologies and give companies access to the funds that they need to make investments and take advantage of the public infrastructure. We will make further announcements about our forward broadband strategy during the summer.

Neil Gray Portrait Neil Gray (Airdrie and Shotts) (SNP)
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The Scottish Government’s Budget included a 70% increase in investment in business R&D. To prevent that investment from being undermined by the Government’s approach to Brexit, will the Chancellor commit himself to maintaining the EU levels of R and D funding beyond the current cycle?

Lord Hammond of Runnymede Portrait Mr Hammond
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Once we have left the European Union the money that was reaching the UK from EU sources will be allocated to the UK shared prosperity fund, and over the course of this year we will consult on both the distribution and the application of those funds and the size that that fund should be.

Stephen Metcalfe Portrait Stephen Metcalfe (South Basildon and East Thurrock) (Con)
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9. What steps he is taking to support first-time home-buyers throughout the UK.

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Andrew Percy Portrait Andrew Percy (Brigg and Goole) (Con)
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12. What steps he is taking to support economic growth.

Lord Hammond of Runnymede Portrait The Chancellor of the Exchequer (Mr Philip Hammond)
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The best way to drive economic growth is to raise our productivity growth rate. That is why since 2010 the Government have overseen over half a trillion pounds in capital investment including in the national productivity investment fund, have increased investment in skills and have reduced taxes for business, and I tell my hon. Friend that the way not to support economic growth is through more borrowing, more debt and higher debt service costs.

Andrew Percy Portrait Andrew Percy
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After we voted to leave the EU, a vote endorsed by huge numbers across the north of England, we were told by some that mismanagement of the economy would occur under this Government. The reality in the north, despite those who talk the economy down, is that we have record employment and some of our areas have the fastest growing economies in the country, so may I urge the Chancellor to continue investing in the north and to ignore those, on the Opposition Benches especially, who repeatedly talk down the north of England?

Lord Hammond of Runnymede Portrait Mr Hammond
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Since 2010 the shadow Chancellor has predicted that the UK would go into recession on no fewer than eight separate occasions—that is eight out of zero. But the UK economy is growing steadily and is now 10.7% bigger than its pre-crisis level, and the Office for Budget Responsibility expects it to continue to grow in each year of its forecast to 2022. While we know that the shadow Chancellor does not think that a growing economy matters, let me tell him why I do: a growing economy means more jobs, more prosperity and more security for working people.

Ben Lake Portrait Ben Lake (Ceredigion) (PC)
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What consideration has been given to the contribution that varying certain business taxes, such as VAT, according to the nation or region of the UK could make to encouraging economic growth?

Lord Hammond of Runnymede Portrait Mr Hammond
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The Government’s view is that a unified rate of VAT across the United Kingdom is an important part of our single market of the United Kingdom, which is an essential economic good for the whole of this country.

Douglas Ross Portrait Douglas Ross (Moray) (Con)
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18. Economic growth in Moray will get a huge boost when the Moray growth deal is agreed. It has the support of businesses and communities throughout my area, and I back it 100%. Will the Chancellor meet me to discuss the Moray growth deal and the huge benefits that it will bring to my constituency?

Lord Hammond of Runnymede Portrait Mr Hammond
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We absolutely look forward to being able to make progress on the Moray growth deal, and I am very happy to meet my hon. Friend. I know that the Exchequer Secretary, who is dealing with this matter, would also be pleased to meet him.

Albert Owen Portrait Albert Owen (Ynys Môn) (Lab)
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The Government acknowledge that they want to spread wealth and economic growth across the United Kingdom through their industrial strategy. Does the Chancellor of the Exchequer therefore agree with the Welsh Affairs Committee, chaired by the hon. Member for Monmouth (David T. C. Davies), that the money from the cancelled rail electrification between Cardiff and Swansea should be spent in Wales, so that we can have that shared prosperity?

Lord Hammond of Runnymede Portrait Mr Hammond
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As the hon. Gentleman knows, I firmly believe that the service that will be provided on the route from London to Swansea will deliver exactly what passengers have bargained to get, without the need for the disruption and cost of overhead electrification. We will look at the funding needs of all parts of the United Kingdom appropriately, to support economic growth and to reduce regional disparities.

None Portrait Several hon. Members rose—
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John Bercow Portrait Mr Speaker
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Especially for the purposes of generating economic growth.

Lord Hammond of Runnymede Portrait Mr Hammond
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Precisely, Mr Speaker. It is the economic growth generation potential of housing development that we will take into account when evaluating transport proposals. In relation to the specific project to which my hon. Friend refers, the Exchequer Secretary advises me that the Department for Transport is eagerly awaiting a business plan for the project from the relevant local authority.

John Grogan Portrait John Grogan (Keighley) (Lab)
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Does the Chancellor agree that a devolution settlement for all Yorkshire with an elected Mayor, as supported by all Conservative councils in the county, could improve economic growth in the region?

Lord Hammond of Runnymede Portrait Mr Hammond
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The Government will look carefully at proposals from Yorkshire leaders for a devolution settlement, provided that it does not undermine the existing South Yorkshire-Sheffield city region devolution settlement that has already been established, with a Mayor already elected.

Martin Vickers Portrait Martin Vickers (Cleethorpes) (Con)
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The port operator Associated British Ports, the Hull and Humber Chamber of Commerce and many local businesses are giving serious consideration to free port status for the Humber ports in the post-Brexit world. Will the Chancellor or his Ministers agree to meet representatives of the business community in the area and to give serious consideration to this proposal when the idea has been further developed?

Lord Hammond of Runnymede Portrait Mr Hammond
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As my hon. Friend will know, the Chief Secretary to the Treasury has a great interest in that proposal. Without even needing to consult her, I can say without hesitation that she will be delighted to meet him and his colleagues.

Nic Dakin Portrait Nic Dakin (Scunthorpe) (Lab)
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13. What assessment he has made of trends in the level of wage growth for young people over the last 15 years.

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Tom Brake Portrait Tom Brake (Carshalton and Wallington) (LD)
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T1. If he will make a statement on his departmental responsibilities.

Lord Hammond of Runnymede Portrait The Chancellor of the Exchequer (Mr Philip Hammond)
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My principal responsibility is to ensure economic stability and the continued prosperity of the British people, and I will do so by building on the plans set out in the autumn Budget and the spring statement. The Government’s balanced approach to the public finances enables us to give households, businesses and our public services targeted support in the near term, and to invest in the future of this country, while also being fair to the next generation by at last beginning to reduce a national debt that is far too large.

Tom Brake Portrait Tom Brake
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On prosperity, Mark Carney has just said that household incomes are now about £900 lower than was forecast in May 2016, before the referendum. How much lower still does the Chancellor estimate household incomes will be when the UK leaves the customs union and the single market? When will he publish his analysis?

Lord Hammond of Runnymede Portrait Mr Hammond
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On the publication of Government analysis, I have made it clear on several occasions that once Parliament is being asked to vote on a proposal—on a package—it will be appropriate for the Government to publish the analysis that they have, to make sure that that debate is as informed as possible. The future trajectory of household incomes will depend, in part, on the quality of the deal we negotiate as we exit the EU, and we are focused on getting the very best deal for British jobs, British prosperity and British businesses.

Tim Loughton Portrait Tim Loughton (East Worthing and Shoreham) (Con)
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T2. Much champagne, or, in the more discerning households, English or Welsh sparkling wine, was drunk at the weekend, so what is the Chancellor doing financially to help promote and expand this excellent domestic wine industry? Post Brexit, will he address the anomaly whereby fizz is taxed more than still wine, which has a higher alcohol volume?

Laura Pidcock Portrait Laura Pidcock (North West Durham) (Lab)
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T9. Contrary to the out-of-touch outlook presented by the hon. Member for Brigg and Goole (Andrew Percy), Eurostat figures show regional inequality in the UK, measured in output per hour, to be the worst in Europe. There is a massive disparity across England, with households in the south-east, the richest area of the UK, having more than double the wealth of those in the north-east, where my constituency is. When will the Treasury finally act to meaningfully tackle this ongoing injustice?

Lord Hammond of Runnymede Portrait Mr Philip Hammond
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The hon. Lady focuses rightly on output per hour. The problem is a productivity gap between the regions of the UK and the most prosperous areas of London. We have to close that productivity gap. That is in the interest of not only those individual regions, but our overall national economy. We will do so by investing in public infrastructure and in skills, and by ensuring that the conditions are right for business investment, both domestic and foreign.

Andrew Bridgen Portrait Andrew Bridgen (North West Leicestershire) (Con)
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T3. I have a constituent who, despite having ample equity in her home and never having been in arrears with her payments, is unable to extend her mortgage beyond the age of 75 because of Government rules. That means that she will have to sell the house that she loves. Will my hon. Friend look urgently at whether those rules are absolutely necessary?

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Luke Graham Portrait Luke Graham (Ochil and South Perthshire) (Con)
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The UK productivity and prosperity funds are meant to benefit all local authorities across the United Kingdom. Will my right hon. Friend meet me to talk about how Scottish local authorities can apply directly to those funds?

Rachel Reeves Portrait Rachel Reeves (Leeds West) (Lab)
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The cap on charges on payday loans legislated for by Parliament has made a huge difference in bringing down the costs, but it is now more expensive for a person to go into an unarranged overdraft at their own bank. Will the Government look to extend that legislation to cap also the rip-off fees and charges put on customers by our banks?

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Lord McLoughlin Portrait Sir Patrick McLoughlin (Derbyshire Dales) (Con)
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In the autumn statement, the Chancellor announced the extension of the railcard from age 26 to 30. When will my constituents be able to take advantage of that?

Lord Hammond of Runnymede Portrait Mr Philip Hammond
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A pilot railcard for that age group was launched as a trial, and was fully subscribed very quickly. The Department for Transport will be announcing in due course when the continuation of the scheme will take place.

Jonathan Edwards Portrait Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
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As the Minister knows, the communities that I represent in Carmarthenshire received the highest form of EU structural aid. Will he give a guarantee that they will not lose a single penny following the introduction of the UK Shared Prosperity Fund?

Lord Hammond of Runnymede Portrait Mr Hammond
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As I think I have already said earlier in this session, we will be consulting, during the course of this year, on the design of the UK Shared Prosperity Fund, the scope and scale of the fund and how the money in the fund should be allocated. I look forward to the hon. Gentleman’s input to that consultation.

Kirstene Hair Portrait Kirstene Hair (Angus) (Con)
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Research has shown that those who live in rural areas are getting hit harder at the fuel pump than those in urban areas. Can my right hon. Friend update me on what his Department is doing to ensure that motorists in Angus, and indeed across the United Kingdom, have their taxes cut?

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Lord Hammond of Runnymede Portrait Mr Philip Hammond
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The Government are committed to exploring all technologies that will keep data safe and create opportunities for innovation. Blockchain is one such technology, but the Government will also be examining other even more innovative distributive ledger technologies.

John Bercow Portrait Mr Speaker
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I look forward to learning more about blockchain. I am uninitiated on the matter, as the hon. Member for Walsall North (Eddie Hughes) can tell, but I feel sure that he will put me in the picture erelong.

Rushanara Ali Portrait Rushanara Ali (Bethnal Green and Bow) (Lab)
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The Governor of the Bank of England has stated that economic uncertainty caused by the Brexit vote will knock 5% off wage growth and is costing the UK economy £10 billion a year. Does the Chancellor agree with the Governor?

Lord Hammond of Runnymede Portrait Mr Hammond
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We have not yet concluded our negotiations with the European Union, so it is impossible to make any assessment of the impact of our departure until we know what the future relationship with the EU will be. This Government’s agenda is to get the best possible deal for Britain that protects jobs, prosperity and businesses, so that we can protect our existing trade with the EU as well as build new trade opportunities beyond Europe.

None Portrait Several hon. Members rose—
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Michael Fabricant Portrait Michael Fabricant (Lichfield) (Con)
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Manufacturing accounts for 24% of the west midlands economy but, as others pointed out earlier, there are skills shortages. Will the Chancellor therefore support any bid from the Mayor of the West Midlands for a devolution deal to take over responsibility for skills from the Department for Education?

Lord Hammond of Runnymede Portrait Mr Philip Hammond
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I am tempted to wonder whether my hon. Friend might have discussed that question with the Mayor of the West Midlands before asking it. It would be remiss of me to stand at the Dispatch Box and say that I would accept any bid, but I am certainly willing to consider any proposals from the Mayor of the West Midlands, or from any other elected mayor, to address the skills challenge that we face across the country.

Alison Thewliss Portrait Alison Thewliss (Glasgow Central) (SNP)
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Several of my constituents who are highly skilled migrants made entirely legitimate and timely changes to their tax returns and are now facing removal by the Home Office under immigration rule 322(5). Will a Treasury Minister confirm that people should make entirely legitimate changes to their tax returns? Will they also have a conversation with their Home Office colleagues to prevent these highly skilled contributors from being removed from the UK?