Oral Answers to Questions

Sajid Javid Excerpts

Tuesday 11th February 2020 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

1. What assessment the Government have made of the potential effect on the (a) manufacturing sector and (b) economy of the UK not having access to the EU single market.

[The Chancellor of the Exchequer (Sajid Javid)]

We want a relationship with the EU that is based on friendly co-operation between sovereign equals and is centred on free trade. The economy has grown every year since 2010. Employment is at a record high and wage growth has outpaced inflation for 17 consecutive months. The upcoming Budget will set out ambitious plans to level up across the UK and usher in a decade of renewal.

[Matt Western]

The Chancellor will be aware that the CBI has spoken out and claimed that business is not ready for Brexit, which has already cost businesses billions of pounds in planning. But the advice is unclear. I spoke to the Federation of Small Businesses and to several small businesses last night, and they are extremely concerned that neither the infrastructure nor the advice is in place.

[Sajid Javid]

I can assure the hon. Gentleman that we are working very closely with individual businesses and their representative groups. The one thing they have certainly welcomed in the past few weeks is that we have ended the uncertainty around Brexit by actually leaving the European Union, as we said we would. We will be working very closely with business as we forge that new free trade agreement, which I know we will do.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Three years ago, at my first shadow Treasury questions from this Dispatch Box, I asked the Government about their plan to continue market access for financial services to EU countries after Brexit. Since that time, the Government’s ambitions have faded from the wide-ranging access-all-areas free trade deal that we were promised, to a basic agreement barely covering goods. The Chancellor has announced this morning that he is asking for enhanced equivalence for financial services, which the EU has already ruled out and which does not even exist in sectors such as insurance. This is our largest export sector, so how is it that we are still waiting for a credible plan after three years?

[Sajid Javid]

The hon. Gentleman needs to get his facts right. The EU has not ruled out equivalence. Indeed, it agreed in the political declaration to work at speed on an equivalence decision by the end of July this year, and that is welcome.[Official Report, 13 February 2020, Vol. 671, c. 12MC.] We are working very carefully and closely with the EU on having a broad agreement that will mean that our financial services continue to thrive—not only for our benefit, but for its benefit.

[Alison Thewliss (Glasgow Central) (SNP)]

Figures released this morning by the Office for National Statistics show that GDP was flat in quarter four, growth is at one of its slowest rates since the financial crisis, the service sector is stagnating, and manufacturing has been particularly hard hit. When will the Chancellor accept the reality that these Tory Brexit plans are playing havoc with the economy, and damaging the wellbeing and prospects of all our constituents?

[Sajid Javid]

The hon. Lady will know that growth would have been hit by the uncertainty created in this Parliament before the general election. Since the general election, confidence is back because this country has said no to Marxism and has got on with Brexit.

[Alison Thewliss]

The Chancellor puts forward a ridiculous prospect of the choices facing this country, because Brexit is the real and present danger for the economy. Just-in-time manufacturing is a critical part of the economy. Elizabeth de Jong of the Freight Transport Association has said of the revelation that the Chancellor of the Duchy of Lancaster’s smart border will not be ready until 2025:

“Frictionless trade has been kicked to the touchline… It’s going to be really costly for business.”

Can the Chancellor tell me what impact four years of Brexit chaos at the border will have on the UK economy and jobs in manufacturing in all our constituencies?

[Sajid Javid]

The hon. Lady talks about the importance of manufacturing. Since the change in Government in 2010, we have seen 58% growth in auto manufacturing and 22% growth in aerospace manufacturing. Again, because of the recent general election result, a survey of manufacturers carried out by the CBI a few weeks ago saw the biggest increase in confidence in the history of that survey—in more than 60 years.

[Greg Hands (Chelsea and Fulham) (Con)]

The financial services sector generates 7% of UK GDP, provides 1.1 million jobs and is responsible for £29 billion-worth of tax revenue. Does the Chancellor agree that we need to ensure that the financial services sector is looked after in any trade agreement with the European Union if we are to pay for the infrastructure projects that we expect an announcement on today?

[Sajid Javid]

My right hon. Friend, as always, is absolutely right. The financial services sector employs millions of people—not just in London, but in Edinburgh, Birmingham and so many other parts of our great country—and generates more revenue for public services than any other industry. He is right that financial services will be a key part of forging that new relationship with our European friends.

[Jacob Young (Redcar) (Con)]

Does my right hon. Friend agree that the best way to boost our manufacturing sector, and the economy, is by creating 10 new freeports—and the best place for a freeport is, of course, in Redcar?

[Sajid Javid]

I absolutely agree with my hon. Friend on the importance of freeports. It is a reminder that, as we forge a new chapter for our country outside the EU, there is so much we can do to boost opportunity in our country, and freeports are a key part of that.

[Vicky Ford (Chelmsford) (Con)]

About 3,000 people work in the insurance sector in Chelmsford—it is a massive contributor to our economy and to the tax take. Given that the EU grants equivalence in the insurance sector to countries such as Bermuda, is it not perfectly reasonable that the EU should offer the UK the same?

[Sajid Javid]

My hon. Friend is absolutely right. On day one, we will have exactly the same rules. We will not be rule takers. We will have the right to diverge in future, but on day one we can absolutely see why the EU will be looking very carefully at the equivalence decision.

[Tim Farron (Westmorland and Lonsdale) (LD)]

In the South Lakes we have 3,000 local families waiting for a council home, yet the Government’s own Migration Advisory Committee says that the Government’s plan for visas and migrant pay will see an 8% reduction in the construction workforce. So will the Chancellor explain who is going to build the homes that families in the South Lakes so desperately need?

[Sajid Javid]

The hon. Gentleman will know that, under this Government, since 2010, we have seen a dramatic increase in the number of homes being built. I think that last year there was the highest number of homes built in all but one of the past 30 years. When it comes to building more of those homes, of course we do need enough workers in the industry. That is exactly what our points-based system is about—making sure that it focuses on those areas where we need most support.

[Katherine Fletcher (South Ribble) (Con)]

2. What steps he is taking to allocate funding for improved transport infrastructure throughout the UK.

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[Paul Holmes (Eastleigh) (Con)]

6. What steps he is taking to improve the UK's national infrastructure.

[The Chancellor of the Exchequer (Sajid Javid)]

Infra- structure is a top priority for the Government, which is why we are publishing the national infrastructure strategy alongside the Budget. It will set out further details of the Government’s plan to increase investment to transform the UK’s infrastructure.

[Paul Holmes]

I welcome my right hon. Friend’s commitment to vital national infrastructure, but does he agree that bespoke local infrastructure projects benefit the national infrastructure network by increasing connectivity? An example is the much-needed Chickenhall Lane road link in Eastleigh, for which my constituents have been waiting for over 20 years.

[Sajid Javid]

My hon. Friend is right. Local transport is the backbone of our community, which is why hopefully a welcome announcement will be made today on buses and cycling—a new £5 billion package on local transport. There is also the £150 million fund for smaller projects to deal with congestion hotspots. I would be pleased to consider the Chickenhall Lane link road in the next available competition.

[Nick Smith (Blaenau Gwent) (Lab)]

Blaenau Gwent needs investment in the Ebbw Vale to Cardiff train line for extra services. The shared prosperity fund could be a crucial route to providing that. When will the fund be ready to support infrastructure projects in our eastern valleys?

[Sajid Javid]

The hon. Gentleman will know that, as we transition from EU structural funds to the shared prosperity fund, it will be important that we set out exactly how that will work. With reference to his question, it means that the Welsh Government will have to work closely with us to see how we can use that for infrastructure projects in Wales.

[Claire Coutinho (East Surrey) (Con)]

Thanks to heavy usage by HGVs, Surrey is sometimes called the pothole capital of England. What steps is the Department taking to invest in tackling potholes nationally, which I am very keen to see in East Surrey?

[Sajid Javid]

My hon. Friend raises an important issue that affects many communities. All our constituents would say that the number of potholes is unbearable nowadays, which is why we made it clear in our manifesto that we will have the largest fund ever put in place by any Government to tackle potholes, with more details at the Budget.

[Jessica Morden (Newport East) (Lab)]

7. What progress his Department is making on its review of the implementation of changes to the off-payroll working rules; and if he will make a statement.

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[Tom Randall (Gedling) (Con)]

11. What plans he has to help ensure equity of economic opportunity throughout the UK.

[The Chancellor of the Exchequer (Sajid Javid)]

We will level up opportunity across the UK to ensure that every region and nation benefits from growth, including through better infrastructure, public services and investment in skills. I will set out more details in the Budget through the national infrastructure strategy.

[Tom Randall]

Many of my constituents are delighted about the Government’s plans to level up funding across the country. Will my right hon. Friend tell me what that will mean for the people of east midlands and my constituents in Gedling?

[Sajid Javid]

As we level up opportunity in every region, we will make sure that the whole country benefits, including the east midlands. That includes, for example, the £3.6 billion towns fund that we have announced, with 16 town deals in the east midlands. The Government are also committed to the £250 million growth deal, which provides funding for the Derby, Derbyshire, Nottingham and Nottinghamshire areas and will include projects such as the Gedling access road.

[Ms Lyn Brown (West Ham) (Lab)]

This is beyond parody. The reality is that after 10 years of Tory rule, the five richest families in this country own more wealth than 13 million of us put together. Fourteen million of us live in poverty. Two out of three of those are in working households. Childcare, transport and the cost of rent hold millions back, so will the Chancellor accept some tests for his Budget? Will he cut child poverty? Will he cut homelessness? Will he end the need for food banks? Will his Budget match his words? The hell it will.

[Sajid Javid]

Let me tell the hon. Lady what we have seen under 10 years of Tory rule, after Labour’s great recession. We have had nine consecutive years of growth. We have an economy that is nearly 17% bigger than it was in 2010, and 3.9 million jobs have been created—I would think that a party that calls itself the Labour party would welcome that. Unemployment is at its lowest level for 45 years, and according to the International Monetary Fund, our economy will grow faster this year than those of Italy, Japan, France and Germany.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Small and medium-sized enterprises are critical to economic opportunity and would undoubtedly benefit from greater access to business finance, yet challenger banks suffer from the same capital requirements as larger banks, despite the fact that they do not present the same systemic risk. Will my right hon. Friend say what he might be able to do to change that situation?

[Sajid Javid]

This is something that I have discussed with regulators. My hon. Friend is right in his general point about challenger banks and the risks that they may or may not represent. It is right that we take a fresh look at this because having more competition in the banking sector is a good thing, especially for SMEs.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

12. What recent assessment his Department has made of the contribution to the public purse of tax paid by co-operative and mutual businesses.

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[Alan Mak (Havant) (Con)]

16. What steps he is taking to improve UK productivity.

[The Chancellor of the Exchequer (Sajid Javid)]

You ain’t no Deputy, Mr Speaker!

Increasing productivity is the best way to boost wages and improve living standards. We have worked hard to build a stronger, fairer economy, dealing with the deficit, helping people into work, and cutting taxes for families and businesses.

[Alan Mak]

The link between investment in research and development and increased productivity is well recognised. What steps is my right hon. Friend taking to encourage more private sector investment in R&D to help Britain become a leader in the fourth industrial revolution?

[Sajid Javid]

I thank my hon. Friend for all the work that he has done to put the UK at the forefront of the fourth industrial revolution. He is right to raise the importance of research and development. We are committed to investing an additional £7 billion in R&D by 2021-22 —the largest increase in 40 years—and, as my hon. Friend will know, in our manifesto we committed ourselves to going even further.

[Alison McGovern (Wirral South) (Lab)]

The people with the least productive, lowest-paid jobs, although often highly skilled, are women working in care, retail or hospitality. Where is the Chancellor’s productivity plan for the women in our country?

[Sajid Javid]

The hon. Lady will be pleased to know that we have more women in employment than ever before in our history, and that the gender pay gap is the narrowest ever recorded. However, she is right: we need to do more, and more investment will help, whether it is in infrastructure or skills. What will also help is our new points-based immigration system. Too often businesses have sought to take unskilled labour from abroad and cut the wages of people locally, and we must put an end to that as well.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

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

[The Chancellor of the Exchequer (Sajid Javid)]

We have ended the uncertainty over our departure from the European Union, and we stand at the beginning of a new chapter. I know that the future is bright as we level up our country and unleash Britain’s potential. We have confirmed that 31 million people will receive a tax cut in April, and in the Budget on 11 March I will continue to lay the foundations for a decade of renewal. We will also set out our plans for an infrastructure revolution and for better investment in our most important asset of all, our human capital.

[Stephen Crabb]

Will my right hon. Friend reaffirm that when we talk about levelling up, we are indeed talking about levelling up the whole United Kingdom—all regions and all nations? May I encourage him to show real determination to ensure that the devolved nations also see and feel the benefit of his ambitious infrastructure proposals?

[Sajid Javid]

I can absolutely confirm that to my right hon. Friend. We are blessed with talent throughout our country. Wherever we look, we have talent. Our country is oozing with talent, and that, of course, includes Wales: we have just seen a demonstration of that talent. We need to ensure that there is much more opportunity, which means investment in infrastructure and skills and retaining a dynamic, competitive economy.

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

In the last month we have seen the Financial Times predicting that the Chancellor will miss his balanced budget target, and today we have seen zero growth in the economy. At the same time, Mr Dominic Cummings has demanded cuts in taxes and massive spending commitments, so the Chancellor has resorted to floating a possible raid on middle-income pensions, a mansion tax—once described as Marxist—and a 5% cuts round to find some money to pay for Mr Cummings’s demands. Yet in the real world out there, the victims of Wonga, the payday loan company, were told a fortnight ago that they would receive less than 5% of the compensation that they are owed. Will the Chancellor take a break from his arm-wrestling with Mr Cummings, and introduce measures to compensate the Wonga victims fully?

[Sajid Javid]

I think that I have to correct myself. I said that there was talent throughout the country, but, judging by what we have just heard, I do not think that that includes the Labour party.

There is all sorts of speculation about the Budget, and I am not going to respond to that. However, the right hon. Gentleman will know that when the Budget is published, it will be published alongside a report by the independent Office for Budget Responsibility. Those are the figures that are going to matter, not the ones that are speculated about in the press. As for growth, the right hon. Gentleman will also know that although there has been a fall in global growth, the International Monetary Fund forecasts that Britain will grow faster this year than France, Germany, Italy and Japan.

[John McDonnell]

I asked about Wonga. [Hon. Members: “You did.”] On the basis of that answer, I can see why No. 10 nicknamed the right hon. Gentleman CHINO: Chancellor in name only.

Wonga is just one example of the recent scandals in the financial sector. We have seen the scandals of closet tracking last year, London Capital & Finance, Woodford Investment Management, the tax avoidance by Lycamobile —a Tory party donor—NMC Health’s misreporting today, large-scale money-laundering, and audit failure after audit failure. Regulation of the finance sector—I say it again—is clearly failing, and now there is the risk to jobs resulting from the tardiness of a post-Brexit settlement. Let me put this to the Chancellor: can he assure me that the White Paper that he has promised today will address the failure of regulation and the culture of recklessness and abuse that has developed in some sections of the City, in addition to the risks from Brexit, so that we can plan a long-term stable future for our finance sector?

[Sajid Javid]

I remember that not long ago the shadow Chancellor stood here and said that he wanted to be known as the “people’s Chancellor”. I think the people had a very different idea, however. On his question about high-cost credit, when I was last in the Treasury as Economic Secretary, that was the first time that any Government had introduced proper regulation around high-cost credit. This is something that we keep under review, which is why, as we present our White Paper, we will be looking to see what more we can do.

[Stephen Hammond (Wimbledon) (Con)]

T2. Many in financial services will warmly welcome the Chancellor’s remarks in the papers yesterday about equivalence arrangements, but does he agree that the real value to those arrangements is in the length of the revocation period? Will he therefore press for revocation notices of a minimum of a year and preferably three years?

[Sajid Javid]

Yes, I agree with my hon. Friend. Equivalence arrangements, done properly, would require a period of stability to be agreed, and that is exactly what we are working on with our European friends.

[Bill Esterson (Sefton Central) (Lab)]

T3. Funding for coal mining ended in 2012, but it carries on for oil and gas, as we saw at the recent Africa summit and in the lobbying for the Petrofac oil refinery in Bahrain. When is the Chancellor going to end funding for fossil fuel projects and take the action that is needed to tackle the climate crisis?

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[Mrs Flick Drummond (Meon Valley) (Con)]

T4. Over the past few weeks, I have met a number of businesses in the Meon Valley whose growth is being held back by poor internet connectivity. What funding exists to help businesses in rural areas to boost their productivity and growth by improving their broadband?

[Sajid Javid]

My hon. Friend is right to raise this matter. The Government have already put in place the gigabit broadband voucher scheme and the rural gigabit connectivity scheme, which is available to small and medium-sized enterprises and gives support of up to £3,500 per company. She will also be pleased to know that the Government have committed £5 billion to invest in new infrastructure to ensure that every part of our country has the best possible broadband.

[Matt Western (Warwick and Leamington) (Lab)]

T8. Will the Chancellor ensure, in the Budget in March, that the automotive manufacturing sector gets the support it requires? He will know that there was a decline of 14% in our manufacturing production last year, which represents a big hit to the Treasury. Will he put in place the support to ensure a transition from fossil fuels, so that we can still produce vehicles such as diesel-powered units in good numbers while supporting the switch to electric vehicles?

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[Afzal Khan (Manchester, Gorton) (Lab)]

T9. In September last year, standing at the Dispatch Box the Chancellor declared that austerity was at an end, but just last month he demanded that each Department cut 5% of its budget—hardly a glowing endorsement of the end of austerity. Will the Chancellor now admit that the Government never had any intention of ending austerity or easing the pain felt by millions around the country?

[Sajid Javid]

With respect, I think the hon. Gentleman is confusing cutting spending and tackling waste, and we know that the previous Labour Government was good at neither of those, with overspending and loads of waste. It is right that as a Government we look carefully at every single pound that is spent and make sure it is done so appropriately.

[Damian Hinds (East Hampshire) (Con)]

T6. Creditor enforcement action can greatly exacerbate the problems that people going through mental health crises can experience. May I commend the Chancellor and the Economic Secretary for the breathing space initiative, which will help to ease the pressure on those people and so many more?

[Mr Ben Bradshaw (Exeter) (Lab)]

Depending on which briefing to today’s newspapers was accurate, the infrastructure announcement will fund a grand total of either 250 or 1,000 miles of new designated cycleway. That is to be compared with the 1,800 being provided by the Labour Mayor in Manchester alone. How can a small city such as Exeter hope to get any of the help, resources or the powers it needs to deliver on the cycling infrastructure as it desperately wants to do?

[Sajid Javid]

I can tell the right hon. Gentleman that the announcement today was of £5 billion of fresh funding for local transport—buses and cycling. When it comes to cycling—something we all want made easier to access for all our constituents—there will be 250 miles of new dedicated cycle track.

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

T7. I know that the Government are committed to renewing and improving our national infrastructure. However, those improvements have to represent value for money. I therefore urge the Chancellor to question both the cost and effectiveness of the current proposals for a new lower Thames crossing and suggest that he re-examines both the business case and the alternative options.

[Sajid Javid]

I understand my hon. Friend’s concerns and he is right to raise this. He will be pleased that Highways England is conducting a supplementary consultation on the lower Thames crossing to make sure that any benefits are maximised. The consultation will close on 25 March, and I will then look at it carefully. I would encourage him to have his say.

[Wera Hobhouse (Bath) (LD)]

As a former teacher, I know that a good education is a key driver to economic opportunities for young people, but sixth forms have been heavily damaged by years of under-investment. Will the Chancellor commit to implementing the recent recommendation from the Education Committee and Ofsted to raise the rate of funding per pupil to at least £4,760 in next month’s Budget?

[Mel Stride (Central Devon) (Con)]

My right hon. Friend the Chancellor will know that I have written to him about the legal duty that the OBR has to produce two economic forecasts in each financial year, which of course has been complicated by the cancellation of the last Budget. Can I ask him to set out for the House the approach that he intends to take and how he will avoid the necessity of having two forecasts very close together saying essentially the same thing?

[Sajid Javid]

I congratulate my right hon. Friend on being elected as the Chair of the Treasury Committee. I look forward to working with him and to the scrutiny that he will provide, as he is doing right now. The issue about the forecasts the OBR needs to provide is a live one, and we will make sure that the OBR meets its statutory requirements. I am pleased that the head of the OBR, Robert Chote, has discussed it with my right hon. Friend, and I would be happy to discuss it with him too.

[Gavin Robinson (Belfast East) (DUP)]

The Chancellor will know of the association between productivity, economic opportunity and regional productivity. Noting that Flybe is in the news again today, and knowing how important it is to Belfast City airport in my constituency and regional hubs throughout this United Kingdom, will he remember those three principles as he charts a course to find a permanent solution for that aviation company?

[Sajid Javid]

Of course I will keep that in mind. I assure the hon. Gentleman that the Government are absolutely committed to spreading opportunity throughout the country—throughout each of the nations that make up the United Kingdom—and we want to look at all the ways we can improve connectivity.

[Jo Gideon (Stoke-on-Trent Central) (Con)]

The Goodwin International training school in my constituency is an exemplar of skills training by a successful modern manufacturer with a world-class reputation. For less established firms such as challenger small and medium-sized enterprises, what support is on offer to level them up to Goodwin International standards?

[Peter Grant (Glenrothes) (SNP)]

Every year Scotland exports a quarter of a billion pounds worth of salmon to the European Union. This week, the Scottish Salmon Producers’ Organisation expressed serious concern about the continuing uncertainty of Brexit. What assessment has the Chancellor of the Exchequer made of the impact on this vital industry of the Chancellor of the Duchy Lancaster’s announcement that “as friction-free as possible” trade with the EU means “not friction-free at all”?

[Sajid Javid]

I assure the hon. Gentleman that we are working closely with the fishing industry, including salmon producers, to make sure that as we put in place our new free trade agreement, it will continue to thrive.