Autumn Statement

John Bercow Excerpts

Wednesday 23rd November 2016 Commons Chamber

[Mr Hammond]

Yes—it says here because I wrote it here.

My ambition is for the UK to be a world leader in 5G. That means a full-fibre network; a step change in speed, security and reliability. So we will invest over £1 billion in our digital infrastructure to catalyse private investment in fibre networks and to support 5G trials. From April, we will introduce 100% business rates relief for a five-year period on new fibre infrastructure, supporting further roll-out of fibre to homes and businesses.

We have chosen to borrow to kick-start a transformation in infrastructure and innovation investment, but we must sustain this effort over the long term if we are to make a lasting difference to the UK’s productivity performance, so today I have written to the National Infrastructure Commission to ask it to make its recommendations on the future infrastructure needs of the country, using the assumption that the Government will invest between 1% and 1.2% of GDP every year from 2020 in economic infrastructure covered by the commission. To put that in context, we will spend around 0.8% of GDP on the same definition this year.

I am also backing the commission’s interim recommendations on the Oxford-Cambridge growth corridor, published last week, with £110 million of funding for east-west rail and a commitment to deliver the new Oxford-Cambridge expressway. That project can be more than just a transport link. It can become a transformational tech corridor, drawing on the world-class research strengths of our two best-known universities. I welcome the commission’s continuing work on delivery model options. We will carefully consider its final recommendations in due course.

The major increase in infrastructure spending I have announced today will represent a significant increase in funding through the Barnett formula, of more than £250 million to the Northern Ireland Executive, £400 million to the Welsh Government and £800 million to the Scottish Government.

Public investment is only part of the picture, however. About half of our economic infrastructure is financed by the private sector, and we will continue to support that investment through the UK guarantee scheme, which I am today extending until at least 2026. The new capital investment I have announced will provide the financial backbone for the Government’s industrial strategy that the Prime Minister spoke about on Monday, a firm foundation upon which my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy will work with industry to build our ambition of an economy that works for all.

I can announce four further measures to back business. I am doubling the UK export finance capacity to make it easier for British businesses to export. I am funding Charlie Mayfield’s business-led initiative to boost management skills across British businesses. I am taking a first step to tackle the long-standing problem of our fastest growing start-up tech firms being snapped up by bigger companies, rather than growing to scale, by injecting an additional £400 million into venture capital funds through the British Business Bank, unlocking £1 billion of new finance for growing firms. I am also launching today a Treasury-led review of the barriers to accessing patient capital in the UK, so that we can take further action to address them.

This Government recognise that, for too long, economic growth in our country has been too concentrated in London and the south-east. That is not just a social problem but an economic problem. London is one of the highest-productivity cities in the world and we should celebrate that fact. But no other major developed economy has such a gap between the productivity of its capital city and its second and third cities, so we must drive up the performance of our regional cities. Today we publish our strategy for addressing productivity barriers in the northern powerhouse, and give the go ahead to a programme of major roads schemes in the north. Our midlands engine strategy will follow shortly, but I am today providing funding so that the evaluation study for the midlands rail hub can go ahead.

In addition, we are investing in local infrastructure in every region of England. I can announce the allocation of £1.8 billion from the local growth fund to the English regions: £556 million to local enterprise partnerships in the north of England, £542 million to the midlands and east of England, and £683 million to LEPs in the south-west, south-east and London. We will announce the detailed breakdown of allocations to individual LEPs shortly.

Devolution remains at the heart of this Government’s approach to supporting local growth, and we recommit today to our city deals with Swansea, Edinburgh, north Wales and Tay cities. I can also announce today we are beginning negotiations on a city deal for Stirling so that every single city in Scotland will be on course to have a city deal. To support new mayoral combined authorities in England, I can announce that we will grant them new borrowing powers to reflect their new responsibilities.

While we continue discussions with London and the west midlands on possible devolution of further powers I can announce today that London will receive £3.15 billion as its share of national affordable housing funding, to deliver a commitment of more than 90,000 affordable homes. I can also announce that we are devolving to London the adult education budget, and giving London greater control over the delivery of employment support services for the hardest to help.

I have deliberately avoided making this statement into a long list of individual projects being supported, but I am going to make one exception. I will act today, with just seven days to spare, to save one of the UK’s most important historic houses, Wentworth Woodhouse near Rotherham. It is said to be the inspiration for Pemberley in Jane Austen’s “Pride and Prejudice”. But in 1946, in an extraordinary act of cultural vandalism, the then Labour Government authorised extensive opencast coal mining virtually up to the front door of this precious property. Perhaps that is Labour’s idea of a northern powerhouse. Wentworth Woodhouse is now—[Interruption.]

[Mr Speaker]

Order. I want to hear about this house. It sounds very interesting indeed.

[Mr Hammond]

Wentworth Woodhouse is now at critical risk of being lost to future generations. A local effort has been hugely successful in securing millions in funding from various foundations and charities, subject to the balance required being found by 30 November. We will today provide a £7.6 million grant towards urgent repairs to safeguard this key piece of northern heritage—all but destroyed by a Labour Government, and saved by a Conservative one.

I can also confirm distribution of a further £102 million of LIBOR bank fines to armed forces and emergency services charities, including, my hon. Friends will be pleased to hear, £20 million to support the Defence and National Rehabilitation Centre at Stanford Hall in Nottinghamshire, as well as £3 million from the tampon tax fund for Comic Relief to distribute to a range of women’s charities.

We choose to invest in our economic infrastructure because it can transform the growth potential of our economy, as well as improving the quality of people’s lives. That investment is possible only because the Government are prepared to take the tough decisions—every one of them opposed by the Labour party—to maintain control of current spending. When we took office in 2010, public spending was 45% of GDP; this year, it is set to be 40%. During those six years, we have seen crime fall by more than a quarter, the highest proportion ever of good or outstanding schools, the number of doctors in our NHS increasing by 10,000, pensioner poverty at its lowest level ever, the lowest ever number of children being raised in workless households and the highest ever number of young people going on to study full time at university.

We have demonstrated beyond doubt that controlling public spending is compatible with world-class public services and social improvement. But, as the OBR’s debt projections demonstrate, we have more work to do to eliminate the deficit. Departmental spending plans set out in the spending review last autumn will therefore remain in place, and departmental expenditure in 2021-22 will grow in line with inflation. The £3.5 billion of savings to be delivered through the efficiency review, announced at the Budget and led by my right hon. Friend the Chief Secretary to the Treasury, must be delivered in full. I have, however, exceptionally agreed to provide additional funding to the Ministry of Justice to tackle urgent prison safety issues by increasing the number of prison officers by 2,500.

Having run two large spending Departments in previous roles, I came to this job with some very clear views about the relationship between the Treasury and spending Departments. I want Departments to be incentivised to drive efficiencies, and I want the Treasury to be an enabler for good, effective spending across government. To kick-start this new approach, I will allow up to £1 billion of the savings found by the efficiency review to be reinvested in 2019-20 in priority areas and I have budgeted today accordingly.

We manage public spending so that we can invest in the public’s priorities. The Government have underlined those priorities with a series of commitments and protections for the duration of this Parliament. I can confirm today that, despite the fiscal pressures, we will meet our commitments to protect the budgets of key public services and defence; keep our promise to the world’s poorest through our overseas aid budget; and meet our pledge to our country’s pensioners through the triple lock. But as we look ahead to the next Parliament, we will need to ensure that we tackle the challenges of rising longevity and fiscal sustainability, so the Government will review public spending priorities and other commitments for the next Parliament in the light of the evolving fiscal position at the next spending review.

I now turn to taxation. Since 2010, the Government have put a business-led recovery at the heart of our plan. We have cut corporation tax from 28% to 20%, sending the message that Britain is open for business. The additional investment in productivity and infrastructure that I have announced today underscores that message, and the raft of investments in the UK announced since the referendum—by SoftBank, Glaxo, Nissan, Google and Apple among others—confirms it. My priority as Chancellor is to ensure that Britain remains the No. 1 destination for business, creating the investment, the jobs and the prosperity to protect our long-term future. I know how much business values certainty and stability, so I confirm today that we will stick to the business tax road map we set out in March. Corporation tax will fall to 17%, by far the lowest overall rate of corporate tax in the G20. We will deliver the commitments we have made to the oil and gas sector. The carbon price support will continue to be capped out to 2020, and we will implement the business rates reduction package worth £6.7 billion. I can also confirm today that, having consulted further, my right hon. Friend the Communities Secretary will lower the transitional relief cap from 45% next year to 43%, and from 50% to 32% the year after. That’s complicated, but it’s good news—just in case anybody wasn’t sure, Mr Speaker. I will also increase the rural rate relief to 100%, giving small businesses in rural areas a tax break worth up to £2,900 a year.

In return for these highly competitive tax rates, the tax base must be sustainable. From April 2017, we will align the employee and employer national insurance thresholds at £157 a week. There will be no cost to employees, and the maximum cost to business will be an annual £7.18 per employee. Insurance premium tax in this country is lower than in many other European countries, and half the rate of VAT. In order to raise revenue, which is required to fund the spending commitments I am making today, it will rise from 10% currently, to 12% from next June. At the same time, I can confirm the Government’s commitment to legislate next year to end the compensation culture surrounding whiplash claims, a major area of insurance fraud. That will save drivers an average of £40 on their annual premiums.

Technological progress is changing the way people live and work, and the tax system needs to keep pace. For example, the OBR has today highlighted the growing cost to the Exchequer of incorporation. So the Government will consider how we can ensure that the taxation of different ways of working is fair between different individuals doing essentially the same work, and sustains the tax base as the economy undergoes rapid change. We will consult in due course on any proposed changes. In the meantime, the Government will take action now to reduce the difference between the treatment of cash earnings and benefits. The majority of employees pay tax on a cash salary, but some are able to sacrifice salary by agreement with their employer and pay much lower tax on benefits in kind. That is unfair, so from April 2017 employers and employees who use these schemes will pay the same taxes as everyone else. Following consultation with stakeholders, ultra-low emission cars, pension savings, childcare and the cycle-to-work scheme will be excluded from this change, and certain long-term arrangements will be protected until April 2021. For pensions that have been drawn down, I will also reduce to £4,000 the money purchase annual allowance, to prevent inappropriate double tax relief being gained.

This Government have done more than any other to tackle tax evasion, avoidance and aggressive tax planning. The UK tax gap, it may surprise some Opposition Members to hear, is now one of the lowest in the world. But we must constantly be alert to new threats to our tax base and be willing to move swiftly to counter them. At the Budget, we committed to removing the tax benefits of disguised earnings for employees, and I am now going to do the same for the self-employed and employers, raising a further £630 million over the forecast period. We will shut down inappropriate use of the VAT flat rate scheme that was put in place to help small businesses. We will abolish the tax advantages linked to employee shareholder status, in response to growing evidence that it is primarily being used for tax-planning purposes by high-earning individuals. We will introduce a new penalty for those who enable the use of a tax avoidance scheme that HMRC later challenges and defeats. These measures, and others set out in the autumn statement document, raise about £2 billion over the forecast period.

There is understandable public concern that the pitch is tilted in favour of large multinational groups, which are able to use cross-border structures to manage their tax liabilities. Following detailed consultation, I can confirm that we will implement our new restriction on tax relief for corporate interest expenses and reform the way relief is provided for historic losses. These measures, scored at Budget 2016, will help to ensure that large businesses will always pay tax in years where they make substantial profits. They will also mean that businesses cannot avoid tax by borrowing excessively in the UK to fund their overseas activities. They take effect in April, and will raise over £5 billion from the largest businesses in the UK.

I said that the tax system must be fair, and that means rewarding those who work hard by helping them to keep more of what they earn. There is one tax reform the Government have pursued since 2010 that has done more than any other to improve the lot of working people: raising the tax-free personal allowance. When we entered Government in 2010, it was £6,475. After six years, it is now £11,000, and will rise to £11,500 in April. As a result, we have more than halved the tax bill of someone with a salary of £15,000 to just £800. That is a massive boost to the incomes of low and middle earners. Since 2010, we have cut income tax for 28 million people and taken 4 million people out of income tax altogether. I can confirm today that, despite the challenging fiscal forecasts, we will deliver on our commitment to raise the allowance to £12,500, and the higher rate threshold to £50,000, by the end of this Parliament. Once that £12,500 has been reached, the personal allowance will rise automatically during the 2020s in line with inflation, rather than the national minimum wage, as currently planned. It will be for the Chancellor to decide from year to year whether more is affordable.

As well as taking millions of ordinary people out of tax, we are the Government who introduced the national living wage and gave a pay rise to over 1 million workers. [Interruption.] Labour Members don’t like it—a Tory Government gave a pay rise to over 1 million of the lowest-paid workers. We are the Government who introduced 15 hours a week of free childcare for all three and four-year-olds, and we will double that for working families from September. We are the Government whose education reforms have raised standards and expanded opportunity, with 1.4 million more children now in “good” or “outstanding” schools, while the new capital funding I have provided today for grammar schools will help to continue that trend. We are the Government who pledged to invest in our NHS, and we are delivering on that promise by backing the NHS’s “Five Year Forward View” plan for the future with £10 billion of additional funding by the end of 2020-21. But we recognise that more needs to be done to help families make ends meet and to ensure that every household has opportunities to prosper. So today I can announce that the national living wage will increase from £7.20 to £7.50 next April. That is a pay rise worth over £500 a year to a full-time worker.

Creating jobs, lowering taxes and raising wages address directly the concerns of ordinary families, and the revenue-raising measures that I have announced today enable me to go further to help families on low wages. Universal credit is an important reform to our benefits system and is designed to make sure that work always pays. We want to reinforce that position. I have considered very carefully the arguments made by my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) and others, and weighed them carefully against the fiscal constraints, and I have concluded that from April we can reduce the universal credit taper rate from 65% to 63%. This is effectively a targeted tax cut that will be worth £700 million a year by 2021-22 for those in work on low incomes. It will increase the incentive to work and encourage progression in work, and it will help 3 million households across our country.

We believe that a market economy is the best way of delivering sustained prosperity for the British people. We will always support a market-led approach, but we will not be afraid to intervene where there is evidence of market failure. We will look carefully over the coming months at the functioning of key markets, including the retail energy market, to make sure they are functioning fairly for all consumers. In the private rental market, letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, despite attempts to regulate them, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees. So I can announce today that we will ban fees to tenants as soon as possible. We will also consult on how best to ban pension cold calling and a wider range of pension scams.

We can also help today those who rely on the income from modest savings to get by. Low interest rates have helped our economy to recover, but they have significantly reduced the interest people can earn on their cash savings, so we will launch a new, market-leading savings bond through NS&I. The detail will be announced at the Budget, but we expect our new investment bond will have an interest rate of around 2.2% gross and a term of three years. Savers will be able to deposit up to £3,000, and we expect around 2 million people to benefit.

The announcements I have made today lower taxes on working people, boost wages, back savers and bear down on bills. In early 2017, we will begin the roll-out of tax-free childcare across Britain, providing a saving of up to £2,000 per child. Once it is rolled out, we pledge to keep it under review to ensure that it is indeed delivering the support that working families need.

There is one further area of household expenditure where the Government can help. The oil price has risen by over 60% since January, and sterling has declined by 15% against the dollar. That means, of course, significant pressure on prices at the pump here in Britain, so today we stand on the side of millions of hard-working people in our country by cancelling the fuel duty rise for the seventh successive year. In total, this saves the average car driver £130 a year and the average van driver £350 a year. This is a tax cut worth £850 million next year and means that the current fuel duty freeze is the longest for 40 years.

I have one further announcement to make. This is my first autumn statement as Chancellor. After careful consideration and detailed discussion with the Prime Minister, I have decided that it will also be my last. I am abolishing the autumn statement. [Hon. Members: “Hear, hear.”] No other major economy makes hundreds of tax changes twice a year, and neither should we, so the spring Budget in a few months will be the final spring Budget. Starting in autumn 2017, Britain will have an autumn Budget announcing tax changes well in advance of the start of the tax year. From 2018, there will be a spring statement responding to the forecast—[Laughter.]

[Mr Speaker]

Order. The House is in a great state of emotion. Some people are very easily humoured. I am glad they are so humoured, but we must hear the Chancellor.

[Mr Hammond]

Perhaps they should have read their briefing, Mr Speaker, because they might then have remembered that Parliament has mandated the OBR to produce a report to Parliament twice a year and has mandated the Government to reply. From 2018, therefore, there will be a spring statement responding to the forecast from the OBR but no major fiscal event. If unexpected changes in the economy require it, I will of course reserve the right to announce actions at the spring statement, but I will not make significant changes twice a year just for the sake of it. This change will allow for greater parliamentary scrutiny of Budget measures ahead of their implementation. It is a long-overdue reform to our tax policy-making process and brings the UK into line with best practice recommended by the IMF, the Institute for Fiscal Studies, the Institute for Government and many others.

The OBR report today confirms the underlying strength and resilience of the British economy. This autumn statement responds to the challenge of building on that strength, while also heeding the warnings in the OBR’s figures, as we begin writing this new chapter in our country’s history. It re-states our commitment to living within our means and sets out our choice to invest in our future. It sends a clear message to the world that Britain is open for business and it provides help to those who need it now. We have made our choices and set our course. We are a great nation, bold in our vision, confident in our strengths and determined in our ambition to build a country that works for everyone. I commend this statement to the House.

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

This morning, we heard the verdict from the trial, following the tragic murder of Jo Cox. That murder robbed this House of a fierce advocate for social justice and a passionate campaigner. Her killing was an attack on democracy itself. Our thoughts are with her family.

Today’s statement places on record the abject failure of the last six wasted years, and offers no hope for the future. The figures speak for themselves. Growth is down; wage growth, down; business investment, down. [Hon. Members: “Sit down.”] The Government’s own deficit targets are failed; the debt target, failed; the welfare cap, failed.

[Mr Speaker]

Order. Let me say now that if Members from either side want to shout out, they should not bother to stand, because they will not be called. I say that to Members on both sides—stop it. It is juvenile, low grade and hugely deprecated by the public, whose support we should be seeking and whom we should try to impress, not to repel.

[John McDonnell]

Thank you, Mr Speaker.

We have heard today that there will be more taxes, more debt and more borrowing. The verdict could not be clearer. The so-called long-term economic plan has failed. As the Treasury’s own leaked paper reveals, the Government knew it had failed before the referendum result was announced. We now face Brexit—the greatest economic challenge of a generation—unprepared and ill equipped. The new Chancellor acknowledged the failure of the economic strategy in October when he promised a reset of economic policy.

Today, we expected a change of direction after those six wasted years. Instead, we have seen further cuts to earnings for those in work through cuts to universal credit, and a living wage increase that is lower than expected under the previous Chancellor. This is a new Conservative leadership with no answers to the challenges facing our country following Brexit, and no vision to secure our future prosperity.

Labour respects the decision of the British people to leave the European Union, but the chaotic Tory handling of Brexit threatens the future prosperity of this country. The Chancellor must now do the right thing for British workers and businesses. He must insist on full, tariff-free access to the single market. He and the Treasury know that that is what will get the best deal for jobs and prosperity here. It may not be in the Chancellor’s nature, but in the national interest I urge him to stand up to the Prime Minister and the extreme Brexit fanatics in her Cabinet. If he stands up for British businesses and jobs by fighting for single market access, he will have our full support.

After six wasted years, wages are still lower than they were in 2008. Self-employed people are, on average, paid less than they were a generation ago. Six million people are earning less than the living wage. Too many people are having to worry about buying school uniforms, affording a family holiday or even just paying the rent or mortgage.

We have had a month of briefing from the Conservative party on those people who are called “just about managing”—the JAMs. To the Conservative party, these people are just an electoral demographic. To us, they are our friends, our neighbours and the people we represent. Let me tell the House why those people are just managing. It is the result of Tories imposing austerity on an economy that could not bear the strain. We have seen productivity stagnate, but there is nothing in the autumn statement on the scale needed to overturn those six wasted years.

If the Chancellor really wants to make a fairer tax system as well, he can start by bringing back the 50p tax rate for the richest in our country. We have heard familiar hollow rhetoric from the Tories on tax avoidance, when they have cut the resources of Her Majesty’s Revenue and Customs—the very people who collect these taxes. The resources available to HMRC today are 40% less than they were in 2000.

The Chancellor has frozen in-work benefits at a time when food prices are rising and we do not expect wages to keep up. We need an economy that is fundamentally more prosperous and where prosperity is, yes, shared by all. The increases in the national living wage announced today are lower than expected and leave the poorest-paid workers still earning less than they need to live on. So I ask the Chancellor to adopt a real living wage level, as Labour has pledged, and abandon his predecessor’s empty rhetoric.

Regrettably, the Chancellor is still going ahead with some of the cuts to universal credit. Thanks to pressure—I pay tribute to Members of all parties who have campaigned on this issue—he is offering to soften the blow. We do not want the blow softened; we want it lifted altogether. Today’s changes will leave a single parent on average at least £2,300 worse off. These are the very people who are working hard to deliver for their families, and the Government are betraying them.

People with disabilities, who have been put through the ordeal of the discredited work capability assessment and are trying to get themselves ready to return to work—they are “just about managing”—still remain in the Chancellor’s firing line. He is cutting £30 a week from the support that these disabled people receive. In our society, that is scandalous.

Those who are “just about managing” also rely on our public services. They send their children to local schools; they depend on their local hospital; they rely on local council services to clean their streets, tend to their parks and playgrounds and open their libraries. The reality, however, after six wasted years is that our public services are just not managing. Today, the childcare that parents rely on remains underfunded, as the Public Accounts Committee has reported—and it will remain underfunded, even after today’s announcements.

I want to pay tribute to my hon. Friends the Members for Swansea East (Carolyn Harris) and for Erith and Thamesmead (Teresa Pearce) for the important work they did in bringing the issue of child burial fees to public attention. I ask the Government to do the right thing on child burial fees and reconsider making funding available for families in these desperate circumstances.

Councillors from all political parties are reporting that they are at a tipping point in the provision of social care. The previous Chancellor cut nearly £5 billion from social care, meaning that over 1 million people who need care are not getting it. They are not even “just about managing”, and they got little help today. We call for additional support for social care, because the funding being provided today is only a stop-gap measure. Our social care system will not be secure without long-term funding. Tonight, many elderly people will remain trapped in their homes, isolated and lonely, lacking the care they need because of continuing cuts to social care—and social care cannot be cut without also hitting the NHS.

The supposed £10 billion funding allocated to the NHS is a restatement of an earlier commitment, but the Health Committee described this £10 billion claim as “misleading and incorrect”. The real amount is less than half that claimed. As a result, we now have 3.9 million people on NHS waiting lists—more than ever—and many of those 3.9 million people are waiting in pain, and they got no relief today. Across the country, hospitals face losing their A&E units, their maternity units and their specialist units. This Tory Government are failing patients, as well as failing the dedicated NHS staff who serve us so well. This is the first time that healthcare spending per head has declined since the NHS was created, and I fear there will be a crisis in funding and care over this Christmas. The NHS cares for us, and we should care for the NHS.

Members of this Government have also overseen the biggest real-terms cuts in education for four decades. One pound in every seven has been cut from further education college budgets, and Conservative policy has saddled a generation of students with a lifetime of debt. How can a Government seriously talk about supporting a 21st-century economy when they are planning to pour tens of millions into the failed 20th-century policy of grammar schools, segregating our children at an early age?

As for housing, the Chancellor announced today that he was scrapping “pay to stay” proposals and letting agents’ fees—a U-turn that is a victory for Labour’s campaigns against both the “tenant tax” and letting fees. The Chancellor has spoken before about the dream of home ownership for the young. Nothing that he has announced today is of the scale that is needed to suggest that that will remain anything other than a dream. The hard facts are these. The Government of which the Chancellor was a member built fewer homes than had been built at any point since the 1920s, and there are now a third of a million fewer home owners under the age of 35. Today the Chancellor could have delivered the scale of investment that is required to build the homes that we need and to create a new generation of home ownership. He significantly failed to do so.

Thanks to campaigning by my right hon. Friend the Member for Wentworth and Dearne (John Healey), the Wentworth Woodhouse building will be saved. I am grateful for that. The accusation was that a Labour Government had sited an opencast mine near the building and threatened it. That, I believe, was in 1947. I only wish that some of the policies pursued by Tory Governments since the 1950s could be reversed so easily.

The Government’s biggest investment failure is this: the Chancellor has failed to address properly the Government’s most consistent shortcoming. His predecessor cut public investment to the lowest that it had been since the 1990s. Instead of delivering the ambitious investment that our economy needs throughout the country, the Chancellor has failed to recognise the scale of the challenge. He also risks repeating the mistakes from last year, with the national flood resilience plan failing to provide the protection that our communities need.

Just one in five of the projects in the investment pipeline is under construction, and shovel-ready projects worth £82 billion are still being delayed. The infrastructure gap between London and the rest of the country remains unbridged. London was scheduled to receive 12 times as much public investment per head as the north-east of England. The announcement of a £1.1 billion investment in transport is a reannouncement. The Oxford-Cambridge rail link is significantly delayed against Network Rail’s original planned completion date of March 2019. There are no new ideas here, just a promise to deliver what the Government have previously failed to deliver. This is press-release policy-making, not provision. All that we need now is the return of the high-vis jacket.

The “fourth industrial revolution” will not be delivered on delays, old news and reannouncements. The Government have, at last, realised their mistake, and now talk about an industrial strategy—words that Ministers refused even to refer to in the past—but it is not enough to change a few ministerial titles. The Government and the Chancellor need to deliver. We have yet to see the proposed Green Paper on industrial strategy that was promised over the summer.

The same Government who now talk up high-tech investment oversaw a real-terms cut of £1 billion in science funding during the last Parliament. The OECD recommends that developed countries should be spending 3% of GDP on science. On the basis of what we have heard today, the new spending will lift our expenditure from 1.7% of GDP to a mere 1.8%.

It is the same familiar story for business. The Chancellor is continuing the race to the bottom on corporation tax, and, while continuing the cuts in public services, he is cutting taxes for big business. We know that it is not headline tax rates that encourage long-term investment by businesses. Business investment has been revised down every year under this Government. What encourages businesses to invest is the knowledge that they have access to skilled workers, world-class infrastructure and major markets.

Today’s grim economic forecasts reveal the challenge that lies ahead. The Chancellor admitted over the summer that it was time for a change of course. He has now had to abandon the Government’s fiscal charter, with its failed hard surplus target. Labour warned that a hard surplus target lacked the flexibility to adapt to economic circumstances and the capacity to allow investment. The Chancellor’s U-turn today demonstrates just how right we have been over the past year.

Only weeks ago, the Prime Minister offered the hope of change and the Chancellor offered to “reset” economic policy. Today, we have seen the very people whom the Prime Minister promised to champion betrayed. The Chancellor has failed to break with the economic strategy of austerity. The country remains unprepared and ill-equipped to meet the challenges of Brexit and secure Britain’s future as a world-leading economy. I fear that, after all the sacrifices that people have made over the last six years, today’s statement has laid the foundations for more wasted years. Only a Labour Government will deliver on the ambition and vision to rebuild and transform our economy so that no one and no community is left behind.

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[Mr Hammond]

If my hon. Friend names the bar, I will meet him.

[Mr Speaker]

That was a splendidly pithy answer, but questions are becoming rather long. There are still nearly 50 Members seeking to contribute, and I am keen to accommodate them, but I can do so only if people can—to put it bluntly—abandon the preamble and get on with the pithy, preferably single-sentence, inquiry. I am sure that we can led in this by Caroline Lucas.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Thank you, Mr Speaker.

Disappointingly, this Chancellor has joined his predecessor in failing to mention the words “climate change” even just once anywhere in the statement. That is in the year that is set to be the hottest on record, when parts of the country are under floodwater. Can he justify continued handouts to the oil and gas sector when there is no assurance of support for clean energy post-2020, no reversal of the critical solar tax hike, and nothing on keeping homes warm this winter?

[Mr Speaker]

One sentence if it involved the abandonment of punctuation.

[Mr Hammond]

If the hon. Lady looks carefully at the statement, she will see that I did announce significant additional funding to pursue ultra-low emission vehicles. That is an area in which the UK is already a technology leader. I have also announced today that, from next April, there will be 100% first-year allowances on all electric charging infrastructure. We know that the biggest deterrent to moving to electric vehicles is the fear of being unable to charge them. Getting a widespread charging network rolled out will allow us to meet our ambition to electrify the fleet.

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[Several hon. Members rose—]

[Mr Speaker]

I must advise the House that I have noticed a growing split within the Chamber between the glowerers and the smilers—Members deploying different techniques in a bid to be called. Some have very beatific smiles and others—

[George Kerevan (East Lothian) (SNP)]

Which works?

[Mr Speaker]

A smile is more effective.

--- Later in debate ---

[Several hon. Members rose—]

[Mr Speaker]

From the abundance of smiling Scottish nationalist countenances, I choose Mr George Kerevan.

[George Kerevan (East Lothian) (SNP)]

I congratulate the Chancellor on abolishing the autumn statement and the spring Budget, and introducing a spring statement and an autumn Budget. I trust that that is not his definition of productivity. The OBR central forecast suggests that after 2019 there will be a precipitate fall in the contribution by business investment to GDP growth. In addition, there will be a negative contribution from trade. Does that not suggest that when Britain leaves the single market—if we are taken out of the single market—the only thing between a recession and growth will be public expenditure and an overheated housing market?

Concentrix

John Bercow Excerpts

Wednesday 26th October 2016 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

I understand, with the challenges coming from the Opposition Benches, why she wishes to outsource blame purely to Concentrix, but this Government wrote the contract to incentivise Concentrix’s behaviour and, as confirmed by the Economic Secretary last week in Westminster Hall, sent the personal data to Concentrix to investigate—

[Mr Speaker]

Order. We are tremendously grateful to the hon. Gentleman, but I feel that he has surely concluded his intervention.

[Jane Ellison]

Far from saying that this is all Concentrix, I think there are lessons to be learned all round. I should signal now that, because I think there are lessons to be learned all round—for HMRC, for Ministers and certainly for Concentrix—the Government do not intend to divide the House on the Opposition’s motion. I want this to be an exercise in understanding the problems and learning the lessons. I will take one more intervention, for balance from my hon. Friend the Member for Kingston and Surbiton (James Berry), and then move on to the end of my speech.

Oral Answers to Questions

John Bercow Excerpts

Tuesday 25th October 2016 Commons Chamber

[Mr Hammond]

I know that my right hon. Friend the Secretary of State for Communities and Local Government will want to look at the allocation of funding to local authorities, including Derbyshire County Council. As the hon. Member for Bolsover (Mr Skinner) will know, there are many powerful advocates for Derbyshire on both sides of the House.

[Mr Speaker]

I wish the hon. Member for Solihull (Julian Knight) a speedy recovery. He may ask his question from his seat.

[Julian Knight (Solihull) (Con)]

Thank you, Mr Speaker. The Chancellor will be well aware that the west midlands has a trade surplus with China, thanks to Jaguar Land Rover in Solihull and wider manufacturing. On their visits to BRIC nations, previous Chancellors have been keen to trumpet business in the northern powerhouse. Will this Chancellor help the cogs of the midlands engine to turn by taking west midlands businesses with him on future visits?

--- Later in debate ---

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

I welcome the Government’s ongoing commitment to the northern powerhouse given the impact that that can have on manufacturing, in particular in my constituency, and the allocated funds for the A64 at Hopgrove. Does the Minister agree that such investments must seek maximum economic benefit? The current proposal from Highways England will simply kick an existing pinch point down the road if we do not see the dualling of that carriageway on the A64.

[Mr Speaker]

That had an extremely tangential relationship with the matter of manufacturing industry, therefore meriting an extremely pithy response.

--- Later in debate ---

[Edward Argar]

Earlier this year, a Grant Thornton report suggested that the east midlands could contribute £53 billion to the UK economy by 2025, reflecting the central role that Leicestershire and the east midlands continue to play in driving the country’s growth. Does my hon. Friend agree, however, that if we are to sustain that record of success, it is vital for us to continue to deliver on investment in Leicestershire’s road, rail and broader infrastructure?

[Mr Speaker]

Order. May I remind colleagues of the merits of the blue pencil?

[Simon Kirby]

Good advice, Mr Speaker, as ever.

I thank my hon. Friend for his interest in the east midlands. I agree that improving transport between and within our major cities is vital to help them fulfil their productive potential. As the Chancellor has said, we are investing over £5 billion in transport infrastructure to put the midlands at the heart of a modern transport network.

[Mr Speaker]

Pithiness personified.

--- Later in debate ---

[Shabana Mahmood]

The Chancellor’s predecessor had many a failed target and plan, one of which was a target of £1 trillion in exports by 2020, a target that is nowhere near being reached even with full access to, and membership of, the single market. Meanwhile other countries such as Germany currently export more than we do to China and other growth markets. Does the Chancellor agree that the failure of the Government to improve the UK’s export performance has left us unable to take full advantage of opportunities outside the EU and more vulnerable to—

[Mr Speaker]

Order. I think the hon. Lady should leave a full version of her question in the Library of the House.

[Mr Hammond]

The Government can of course support and enable exporters, but we cannot do their job for them. It is for British exporters to make their businesses competitive and to go and sell their wares around the world, but we will do everything we can to support them in that endeavour.

--- Later in debate ---

[The Economic Secretary to the Treasury (Simon Kirby)]

The Financial Conduct Authority is looking at this important issue, and we will wait on its view.

[Mr Speaker]

Michael Fabricant—not here. That is unprecedented in the history of my being in the Chair. I have never known the hon. Gentleman not to be here, but, fortunately, Mr Philip Davies is here.

[Philip Davies (Shipley) (Con)]

T9. How much UK taxpayers’ money used to bail out and to loan to other EU countries by the EU has been repaid to the UK, and how much is still outstanding? What is the Chancellor doing to ensure that we get all that money back when we leave the European Union?

--- Later in debate ---

[Several hon. Members rose—]

[Mr Speaker]

I am afraid that this will be the last topical question.

[Alex Chalk (Cheltenham) (Con)]

Does the Chancellor support Cheltenham’s Cyber Innovation Centre, and does he agree that spending on our world-class defence and security assets, such as GCHQ, can play a vital role in nurturing the high-tech civilian jobs of tomorrow?

House of Lords Reform and Size of the House of Commons

John Bercow Excerpts

Wednesday 19th October 2016 Commons Chamber

[Mr MacNeil]

My hon. Friend has mentioned that there are 61 peers from Scotland but the number of MPs is going down. Is that not simply more grist to the mill and another reason why people will, this time, vote for independence in the second referendum that will come within two years of the triggering of article 50?

[Mr Speaker]

Order. The hon. Member for Perth and North Perthshire (Pete Wishart) has been generous to a fault in giving way, and I think that that is appreciated by the House. May I very gently make the point that 11 Back-Bench Members wish to contribute, and the Chair will be looking to call the Front-Bench wind-ups at approximately 6.40 pm? There will have to be a very tight time limit on Back-Bench contributions, a fact of which I know the hon. Gentleman will wish to take account in the continuation and conclusion of his eloquent contribution.

[Pete Wishart]

As you say, Mr Speaker, I was coming to my peroration. I have been as generous as possible when it comes to interventions.

Enough is enough. Surely, now is the time to address this matter. We have to look at what we are doing with the House of Lords. I am immensely proud of my party for failing to take places in the House of Lords, and I appeal to the Labour party to take no more places in the House of Lords. Several things have to happen almost immediately. There must be no more new Lords. We need a moratorium on appointments to the House of Lords. The Leader of the House must bring forward plans to reduce significantly the membership of the Lords, with a view to abolishing that place.

The House of Lords is a national embarrassment that should shame the country. It needs to be looked at and it needs to be reformed. Let us make this nation proud by creating a second Chamber that represents this country. Let us start to look at ways to address this. No more cronies in ermine; let us have a democratic Chamber.

--- Later in debate ---

[Kirsty Blackman]

Will the Minister—

[Mr Speaker]

Order. I am not entirely clear whether the Deputy Leader of the House concluded his oration or whether he was giving way.

[Michael Ellis]

I had concluded, but out of generosity, perhaps you will accept it if I give way on this occasion.

[Mr Speaker]

Very well, but it is very unusual. I do not think the word exists to “unconclude” one’s speech, but if it possible to do so, the hon. Gentleman has done it. Let us hear the hon. Lady’s intervention.

[Kirsty Blackman]

Thank you very much, Mr Speaker.

The Conservative party manifesto said that the Conservatives would

“address issues such as the size of the House of Lords”.

Why does the Minister think that the electorate thought that was less important than some of the other things in the manifesto? How can he get into the heads of the electorate? This was front and centre of the manifesto.

[Michael Ellis]

The Government have decided that it is not a priority for this Parliament to address that issue. The fact of the matter is that attempts were made during the last Parliament, as I have said, and there is no consensus. There are high priorities, including exiting the EU and further devolution for Scotland and Wales. Those are the priorities. That is why we do not support the motion, as I said. That, Mr Speaker, is the conclusion.

[Mr Speaker]

Before I call the next speaker, let me explain that the time limit on Back-Bench speeches will begin at six minutes. Dependent on progress, it may have to be reviewed.

Sale of Annuities

John Bercow Excerpts

Wednesday 19th October 2016 Commons Chamber

[Several hon. Members rose—]

[Mr Speaker]

Order. I did not interrupt the Minister in his flow, but may I ask that from now on we avoid the use of the word “disingenuous” or “disingenuously”? There is an imputation of dishonour and we should avoid that. The Minister is a dextrous fellow with, I am sure, an extensive vocabulary and he can deploy some other term to get his point across. On the subject of those with dexterity and great vocabulary, I call Sir Desmond Swayne.

[Sir Desmond Swayne (New Forest West) (Con)]

It is the right decision for the circumstances, but does my hon. Friend think that there is any connection between poor value in the annuities market and the Bank of England’s monetary policy?

Small Charitable Donations and Childcare Payments Bill

John Bercow Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 11th October 2016 Commons Chamber

Second Reading

[Mr Speaker]

If colleagues who are leaving, unaccountably, could do so quickly and quietly, that would be greatly appreciated.

Tax Credits: Concentrix

John Bercow Excerpts

Wednesday 14th September 2016 Commons Chamber

[Frank Field (Birkenhead) (Lab)]

I thank the Minister for her statement and draw the House’s attention to how different that response was from those of the previous Government; I do not believe that we would have had today’s statement had there not been a leadership change, so I thank her for that. Will she pass on my thanks to her colleague, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stourbridge (Margot James), for the immediate action she took on the report I submitted on Hermes, whose unlawful use of self-employment HMRC has been asked to investigate?

I have two questions. The worry about this contractor is that to some people it appears to be cutting benefits first and asking questions afterwards, and there is no mechanism for a hotline for MPs to try to sort such issues out. Although I very much welcome her bringing the contract back in-house, it is the only contract that has ever been put in place that has allowed a private company to make decisions about people’s benefit levels, so might she review that?

[Mr Speaker]

It is quite cheeky of the right hon. Gentleman to ask two questions and to declare so openly his intention to do so, although it is perhaps not quite as cheeky as the hon. Member for Sheffield, Heeley (Louise Haigh), who asked five questions without making any such explicit declaration at all.

[Jane Ellison]

I thank the right hon. Gentleman for his comments on the priority given to resolving problems of this nature. It is worth reiterating that, through the contract, we have secured more than £280 million of identified savings in terms of error and fraud. There continues to be considerable fraud, particularly with regard to whether people live singularly in a household. It is important to recognise that the contract has brought important benefits to the taxpayer.

I recognise the right hon. Gentleman’s challenge on the nature of the contract. Such contracts have their place, but they must work appropriately. The contract must work to do the thing it set out to do, but it must at all times work for taxpayers and, above all, for the vulnerable. I will reflect on his wider point if I may, but I give him reassurance on that general point.

--- Later in debate ---

[Christina Rees (Neath) (Lab/Co-op)]

I have been contacted by many distressed women in my Neath constituency about how awful Concentrix really is. Some Concentrix advisers have suggested to mums, who are desperately trying to renew their tax credits, to get payday loans to feed their children while their claims are being processed. A group has been formed, called “Concentrix Mums”, whose more than 5,000 members can share their horror stories. Let me provide just a couple.

[Mr Speaker]

No. I think one will suffice.

[Christina Rees]

One it is, Mr Speaker.

[Mr Speaker]

I fear the hon. Lady has caught what might be called “the Burnley condition”.

[Christina Rees]

I hope not. Does it involve shoehorning? One mum had not eaten for three days so that she could feed her children. This is sickening: it should be stopped and it should have been stopped a long time ago.

Finance Bill

John Bercow Excerpts

Tuesday 6th September 2016 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 174, page 167, line 40, leave out clause 82.

Government amendments 149 to 151.

Amendment 175, in schedule 14, page 481, line 36, at end insert—

‘(12) Section 169Z makes provision about the expiration of this Chapter.”

Amendment 176, page 499, line 15, at end insert—

“169VZ Expiration of Chapter 5 provisions

(1) The provisions of this Chapter shall remain in force until six years after their commencement and shall then expire, unless continued in force by an order under subsection (2).

(2) The Secretary of State may by order made by statutory instrument provide—

(a) that all or any of those provisions which are in force shall continue in force for a period not exceeding 12 months from the coming into operation of the order; or

(b) that all or any of those provisions which are for the time being in force shall cease to be in force.

(3) No order shall be made under subsection (2) unless—

(a) a draft of the order has been laid before and approved by a resolution of both Houses of Parliament,

(b) the Secretary of State has commissioned a review of the operation of Investor’s Relief and laid the report of the review before both Houses of Parliament.”

[Rebecca Long Bailey]

I shall speak to new clause 14 and amendments 174 to 176. Amendment 174 would remove clause 82 from the Finance Bill, thereby preventing the proposed cut to the rate of capital gains tax. The cut will reduce the basic rate of capital gains tax from 18% to 10%, and the rate on most gains made by individuals, trustees and personal representatives from 28% to 20%. Gains on residential property and carried interest will still be charged at the higher rate.

I do not want to go over old ground, but I must emphasise the Labour party’s opposition to this reduction in the rate of CGT. I thank my colleagues from other parties for joining us in our opposition. At a time when our public services are stretched to breaking point, the NHS is on its knees, our education sector is over-stretched, housing is in a state of complete crisis, people across the UK are being forced to use food banks, some mothers are going hungry because they cannot afford to feed their children and themselves, and the wider economy is in desperate need of direct investment in skills, infrastructure and industry, it seems frankly absurd to give a tax break of £2.7 billion to the richest people in our society.

Let us not forget that this CGT giveaway hails from a Budget that also planned to take away billions in welfare payments from the most vulnerable people in need of state support. The Government seemed quite happy at the time of the Budget for 300,000 disabled people to lose more than £3,000 a year in their personal independence payments. In stark contrast, our own research has found that the CGT-cutting measures of the Finance Bill amount to a tax giveaway to 200,000 people of about £3,000 a year on average. I am pleased to say that due to Labour’s opposition and the support of some Members from other parties, the worst has not yet happened in relation to PIP, but that still does not justify this policy decision in the Bill. Labour party research shows that just 0.3% of the population will benefit, with those taxpayers likely to benefit to the largest degree being in London and the south-east. If the Government do not accept our evidence, perhaps they will listen to the Resolution Foundation, which said that the CGT cut was

“focused on those on higher incomes—unsurprisingly because in general better off households are the ones making capital gains in the first place.”

--- Later in debate ---

Amendment made: 139, page 547, line 31, leave out “1 October” and insert “14 November”.—(Jane Ellison.)

[Mr Speaker]

Our consideration having been completed, I shall now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will table the appropriate consent motion, copies of which will be made available in the Vote Office and will be distributed by Doorkeepers.

--- Later in debate ---

On resuming—

[Mr Speaker]

I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. I have confirmed the view expressed in my provisional certificate issued on 5 September. Copies of my final certificate will be made available in the Vote Office and on the parliamentary website.

Under Standing Order No. 83M, as modified by Standing Order No. 83S, a consent motion is therefore required for the Bill to proceed. Copies of the motion are available in the Vote Office and on the parliamentary website, and have been made available to Members in the Chamber. Does a Minister intend to move the consent motion?

[The Lord Commissioner of Her Majesty’s Treasury (Stephen Barclay)]

indicated assent.

The House forthwith resolved itself into the Legislative Grand Committee (England, Wales and Northern Ireland) (Standing Order No. 83M).

[Natascha Engel in the Chair]

Finance Bill

John Bercow Excerpts

Monday 5th September 2016 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 10—Review of the operation of the Patent Box—

“(1) The Chancellor of the Exchequer shall, within six months of the passing of this Act, lay an independent report of the value for money provided by, and the efficacy of, the Patent Box legislation before both Houses of Parliament.

(2) The report shall—

(a) assess the size and nature of the companies taking advantage of the Patent Box legislation;

(b) assess the impact of the Patent Box legislation on research and innovation in the UK, including supporting evidence; and

(c) assess the cost effectiveness of the Patent Box legislation in incentivising research and development compared to other policy options.”

New clause 11—Assessment of taxation regime for securitisation companies—

“The Chancellor of the Exchequer shall, within six months of the passing of this Act, commission an independent assessment of the efficacy of the taxation regime to which securitisation companies are subject and lay the assessment before both Houses of Parliament.”

Amendment 177, page 87, line 6, leave out clause 44.

Amendment 162, page 87, line 8, ‘leave out clause 45.

Government amendments 152, 153, 1 to 29, 154, 31, 155, 33 to 59, 156, 61 to 113, 157, 115 to 117, 158, 159, 119 to 128, 160, 129 to 131.

[Kirsty Blackman]

I rise to speak to new clause 5, which is in my name and the names of my hon. Friends, but I wish briefly to mention amendment 162, which has been proposed by the Labour party. I look forward to hearing from its Front-Bench Members. If they intend to push the amendment to a vote, we will join them in the Lobby.

New clause 5 is about the corporation tax treatment of the oil and gas industry. The House will not be surprised to hear me speaking on this subject as I have done so a number of times. What we want is a comprehensive review of the corporation tax rates and investment tax allowances applicable to companies producing oil and gas in the UK, or on the UK continental shelf. This is a timeous ask from us for a number of reasons. For a start, this Bill implements measures that were put in place and discussed first in February and March, before the EU vote, and there have not been any substantive changes by the Government to the Bill as a result of the Brexit vote.

Substantive changes to the Bill are needed because we find ourselves in a completely different situation as a result of the fall-out from Brexit. It is unfortunate that changes have not been made and that there have not been more announcements from the Government about how they intend to manage the financial situation going forward. We want to know about the impact on Aberdeen, which I represent, and on the UK’s tax take and the Treasury. It is important that we seriously consider making changes to the Bill.

We have repeatedly asked for changes to the tax rates and for a comprehensive strategic review. We appreciate that the Government made changes earlier this year, but we do not think they go far enough. Alex Kemp, a renowned petroleum economist, and his long-term research partner, Linda Stephen, are both at Aberdeen University, where they have been working on sophisticated modelling tools. If the Minister has not read the article that appears in Energy Voice today, it is worth reading, together with the report that accompanies it. The work that they have done suggests that corporation tax of 30% is too high, and it is far above the non-North sea rate. They said:

“From the analysis of the economics of new field investments and exploration in current circumstances in the UKCS it is clear that, at $50 and $60 prices, there are many ‘marginal project investment situations’.”

That is key. It is what we have been arguing, and now it is backed up by renowned experts.

The position in which the industry finds itself bears repeating. Estimates vary, but we have lost around 125,000 jobs—from 425,000 we are down to about 300,000. That implies a huge reduction in the tax take for the Treasury and it is a massive hit for the local area, particularly Aberdeen and across Scotland and other oil and gas-producing areas. Because of the reduction in the oil price, we have seen changes in the behaviour of companies. As well as making people redundant, they have changed shift patterns and terms and conditions. They have also managed to reduce production costs, which is a good thing.

--- Later in debate ---

[Jane Ellison]

As I have just laid out, consultation is under way, which provides an opportunity to look at those precise issues. As I said, I invite the SNP to engage with that consultation.

Turning to deal with the lengthy speech and case made for Labour’s new clause 13, which provides for a report on the UK tax gap, the tax gap is an official statistic published each October and it is produced in accordance with a code of practice for official statistics, which assures objectivity and integrity. The methodology is judged by independent third parties to be robust, and it has been intensively reviewed and given a clean bill of health by both the International Monetary Fund and the National Audit Office. There is therefore no need for a report on the tax gap. Furthermore, HMRC publishes a methodological annexe alongside the tax gap publication, which provides details of the data and methodology used to produce estimates of the gap.

I think it fair to say that, in speaking about new clause 13, the hon. Member for Salford and Eccles painted a picture which, on the Government of the House and, I suspect in other parts as well, could be regarded as at the very least ungenerous and in many ways inaccurate, unfair and, indeed, unrecognisable, given the way in which the she downplayed the efforts made by the Government. To call that tinkering at the edges is simply nonsense.

Since 2010, the Government have given HMRC £1.8 billion to tackle evasion, avoidance and non-compliance, and, as I said earlier, over that period HMRC has secured £130 billion in additional tax revenues. We have shown considerable ambition, and, as other Opposition Members have been generous enough to acknowledge, international leadership. I therefore do not accept the criticisms that were voiced from the Opposition Front Bench. It is also worth noting that in the summer Budget of 2015, the Government invested a further £800 million to fund additional work to tackle tax evasion and non-compliance.

No Government, particularly the last Labour Government, have come close to being as ambitious as we have been since 2010 in respect of this important agenda. The fact that there was considerable agreement across the House in the earlier part of the debate, and the fact that the Government have accepted the amendment tabled by the right hon. Member for Don Valley, gives some weight to our claim that we are beginning to strike a UK consensus about the need to tackle this problem, and we have a chance to continue to make progress. I know that there is an appetite to return to these issues. There is a real desire to see the Government continue to lead internationally on avoidance and evasion, and the House can be reassured that that is exactly what we intend to do.

[Mr Speaker]

Does the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) wish to respond, which he is permitted, but not required, to do?

[Roger Mullin]

A few words, Mr Speaker. I merely wish to say that I am incredibly disappointed that the Government have chosen to drag their feet on the issue of Scottish limited partnerships, and that, on the basis of their own arguments, we will press new clause 7 to a vote.

[Mr Speaker]

That was a commendably pithy speech from the hon. Gentleman, for which I think the House is almost audibly grateful, if I may put it that way.

Question put, That the clause be read a Second time.

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[Paula Sherriff (Dewsbury) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 140, in clause 125, page 205, line 32, leave out from “after” to end of subsection and insert “1 January 2017”.

Amendment 142, page 205, line 32, leave out “such” and insert

“1 April 2017, or on any prior”.

Amendment 144, page 205, line 32, leave out “such” and insert

“1 April 2018, or on any prior”.

Government amendment 161.

[Paula Sherriff]

It is a pleasure to open this debate by speaking to new clause 4 and amendments 140 and 144. I thank both Front-Bench teams for ensuring that we have time to debate the issue today. It is, perhaps, appropriate that a female Financial Secretary now sits on the Government Front Bench and has the chance to settle the matter.

It has taken us quite some time to get here. It was in January 2001 that the lower rate of VAT on women’s sanitary products was applied. For that we owe thanks to many women MPs of that era, as well as to the then Minister, Dawn Primarolo, who now sits in the other place. During the passage of the Finance Bill last year, I was proud to lead a cross-party group of today’s women MPs, including many on the Labour Benches, and others such as the hon. Members for Glasgow Central (Alison Thewliss) and for Berwick-upon-Tweed (Mrs Trevelyan), in demanding that we finish the job, which led the Government finally to address the issue at European level. We should pay particular tribute to the many people outside this place who campaigned so hard on this very important issue, not least Laura Coryton, whose petition attracted hundreds of thousands of signatures.

Following that pressure, the Government accepted another cross-party amendment, this time in the Budget resolutions, for what I understand was the first time in history, and the then Prime Minister persuaded the European Council to issue a communiqué on the matter. The European Commission VAT action plan has now been issued and the Commission intends to table a proposal by the end of this year, though of course the UK has since voted to leave the European Union—off the back of a promise by Vote Leave that such a result would allow us to abolish the tampon tax outside the EU. I gently suggest to Government Members, especially those who campaigned for Brexit, that voting for the amendment would honour that promise, and their constituents might reasonably question why they would oppose it.

Whether we are in or out of the EU, there should be no barrier to ending the tax. There are promises both from this Government and from the winning referendum campaign to do so. The explanatory notes for clause 125, written before the referendum vote, state:

“This clause reduces the VAT rate on the supply of women’s sanitary products from 5% to zero”.

but I hope the Minister will acknowledge that that is not really the case as the Bill stands. The clause does not zero-rate women’s sanitary products; it just provides enabling powers for the Treasury to do so, if it chooses, and at a time of its choosing. That is why I originally tabled what is now amendment 142 in Committee, when my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) spoke to it. The then Financial Secretary—now the Chief Secretary—responded that he was

“confident that by 1 April there should be no reason why the measure is not in place.”––[Official Report, Finance Public Bill Committee, 7 July 2016; c. 146.]

He said that the Government would therefore consider accepting the amendment. Since then, the hon. Member for Christchurch (Mr Chope) has tabled his own amendment, which would implement a zero rate from 1 January next year. It is fair to say that there is a cross-party desire to see the promise honoured as quickly as possible.

I acknowledge, however, that the complications of negotiating our exit may make the next tax year, let alone calendar year, a tight deadline for the Government, despite the previous Minister’s confidence. For that reason, I have also tabled amendment 144, which provides for a later deadline of 1 April 2018—in other words, in time for the tax year 2018-19. I believe that this is a very reasonable deadline. By that point, our exit negotiations will be well under way, and the European Commission aims to have reformed its own laws to allow a zero rate by 2018. I reiterate the point made by the Minister in Committee when he said he was confident that by 1 April there should be no reason why this measure is not in place. Amendment 144 gives the Government a full additional year beyond a date that they were confident they could meet. However, should there be any delay, the timescale also allows the Government nearly two years to amend their legislation accordingly with the new dates. The Vote Leave alternative Queen’s Speech included an entire Bill specifically to abolish the tampon tax, but a whole Bill is not necessary given the amendments that we have today, which would allow the Chancellor simply to propose a later deadline in next year’s Finance Bill. The important point, however, is that Ministers should have to explain to this House why any delay was necessary, and we would need to vote to allow that.

The Government have tabled an alternative amendment of their own—amendment 161. While that seems to set 1 April 2017 as a default deadline, it makes it subject to

“the earliest date that may be appointed consistently with the United Kingdom’s EU obligations.”

In short, 1 April next year is not really the deadline at all, and instead we are subject to the Government’s own interpretations of our EU obligations. I must also question the exact wording of the amendment. It does not refer to our obligations as a member of the EU, but just to our “EU obligations”. That seems to leave open the possibility that we might agree to keep a minimum rate of VAT as part of our exit negotiations. When I challenged the Secretary of State for Exiting the European Union on that earlier today, he certainly did not rule it out. Instead, he reflected that ability to set a zero rate was just one reason why people may have voted to leave, but did not actually pledge to deliver it. I am therefore not convinced that this amendment takes us much beyond the existing clause. Unless the Minister has some very strong arguments to address these points, I will press amendment 144, at least, to a vote.

That brings me to new clause 4, which touches on another issue that it would be helpful if the Minister addressed—the women’s charities that have received funding from the tampon tax fund. This was quite understandably criticised by a lot of feminists, as it used a tax on women to pay for support that they often needed as a result of male violence. None the less, it was still better than nothing. Now it is set to be abolished. Can the Minister give us guarantees of stable future funding for these vital services? As she will have gathered from the wording of the new clause, I am making the point that the Treasury will have raised a considerable amount from women historically from the point in 2001 when the Government first made the decision in principle to apply the lowest rate available.

I would like to press Ministers again on one last issue—that the benefit of zero rates is not always passed on in full by the companies that set the prices. When the Labour Government cut the rate to 5%, they committed to monitoring prices to ensure that the cut benefited women rather than just boosting the bottom lines of the businesses involved. I want to know whether this Government will take similar action. As the Minister may be aware, I have negotiated a deal with the leading retailers whereby they will pass on the cut in full. I hope that she will join me in urging these businesses to do that and to sign up to the agreement. Similarly, she will have heard the appalling reports of women turning up at food banks seeking sanitary protection products because they cannot afford them due to welfare cuts or poverty pay. I have reached an agreement with a major retailer that it will provide some free sanitary protection to food banks within my constituency. Can the Government offer any further such support to other constituencies?

I hope that today we can meet the promises made by European leaders, this Government, and indeed the winning referendum campaign. Anything less is simply not good enough for women. I hope that the Minister will accept at least one of my amendments and make it clear that the days of the tampon tax are nearly over for good.

Summer Adjournment

John Bercow Excerpts

Thursday 21st July 2016 Commons Chamber

[Michael Ellis]

If it were not for the Chairman of the Home Affairs Committee we would no doubt still be in our original positions. Where we will be in due course is another matter altogether. I thank him for his support.

My hon. Friend the Member for Harrow East (Bob Blackman) spoke about flooding in his constituency, which is clearly of considerable concern. He raised the difficulties involved with flash flooding and sewage coming through, and I know his constituents will be very grateful to him for doing so in this place. He is very impressive in his representation of all communities in his constituency, and he is well known and recognised for that in the House.

On a lighter note, my hon. Friend also spoke about the advantages of yoga. I know you, Mr Speaker, have often recommended Members to take up yoga in certain circumstances. I do not know whether you and my hon. Friend would like to get together on that subject, but we await further developments with interest.

The hon. Member for Eltham (Clive Efford) spoke about the problems on Southeastern trains. He was not the only Member who spoke about train issues. There clearly are some issues, and the fact that he has raised them will have been to the satisfaction of his constituents and of others’.

My hon. Friend the Member for Gloucester (Richard Graham) spoke about the railway station and the fact that there are insufficient rail services. He also mentioned his cycling expertise. I had noticed that he has a rather painful black eye, which I was sorry to hear about, but I am reassured that the Whips had nothing to do with it. I hope he is well. I know that the summer of music, arts and culture is coming up in Gloucester. People will no doubt want to visit for that.

The hon. Member for Mitcham and Morden (Siobhain McDonagh) spoke of her success in dealing with B&Q, and I congratulate her on that. Reducing wider remuneration packages and blaming the national living wage would be short-sighted and would yield only a one-off gain. Doing so is not in the spirit of the national living wage, and I am sure that B&Q and others are acting accordingly.

I say to my hon. Friend the Member for Cleethorpes (Martin Vickers) that ultimately open access decisions are for the Office of Rail and Road to determine, and we respect its independence in doing so. However, I recognise the potential benefits that open access competition can deliver for railway passengers and others.

I understand that the Queen’s handbags are made in the constituency of the hon. Member for Walsall South (Valerie Vaz)—so another quality product from Walsall. The hon. Lady indicated that the local authority was not listening to her or her residents about road humps. No doubt that authority will want to be rejuvenated, shall we say, in its attention to her representations. She also spoke about litter, a topic that resonated around the House, with Members on both sides speaking about it. It is a major problem. She wants to restart the Keep Britain Tidy campaign, and I will ask the relevant Department to write to her about that.

One could hear the medical expertise of my hon. Friend the Member for Twickenham (Dr Mathias) coming through in her remarks. She spoke about the importance of having water provided on platforms when it is too hot on crowded trains. She also spoke about aircraft noise and other pollution issues. Her expertise brings a great deal of richness to the House.

I think I am right in saying that the hon. Member for Nottingham North (Mr Allen) helped to create the Backbench Business Committee, so it is apposite to credit him with that this afternoon and say how much we appreciate it, as so many Members have taken part in the debate. He spoke of disadvantaged areas in his constituency and the casework that he deals with. I was struck by the way in which he thanked his staff and by the wonderful success that he and they have achieved for Max and, no doubt, many, many others. I congratulate him on that.

My hon. Friend the Member for Norwich North (Chloe Smith) spoke about Brexit. I know that she is particularly alive to the issue of young voters, and is on the all-party parliamentary group on voter registration. The value of her work in respect of young voters is recognised in this House, and that issue will not be forgotten about. It is very important indeed.

The hon. Member for Stirling (Steven Paterson) spoke about quarrying on Gillies hill. I wish him well with his lobbying on that. It is a devolved matter, but he will no doubt get the requisite attention from the local authority. The wooded area he described sounds very pleasant indeed.

I thank my hon. Friend the Member for Stafford (Jeremy Lefroy) for welcoming the military regiments he spoke of which have come to his area. He spoke also of the county hospital doing well. The House knows him to be a powerful advocate for his area.

We also heard from the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), whom I had the pleasure of debating with in Westminster Hall yesterday. I can tell her that the Type 26 warships are certainly not indefinitely delayed. My information is that that is not correct. It struck me that she took particular care to thank the Clerks and staff on the Scottish Affairs Committee and to wish them well over the summer recess.

My hon. Friend the Member for Chippenham (Michelle Donelan) spoke of the engineering skills gap. The Wiltshire festival of engineering that she is arranging in her constituency sounds very impressive, and I know that there are wonderful opportunities in Wiltshire. She said that she had visited 100 local businesses in the past year—what a superb ambassador for job creators in her constituency.

I welcome the hon. Member for Tooting (Dr Allin-Khan) to her place and congratulate her on her by-election success. She was a vocal advocate for junior doctors in her remarks, but I can assure her that my right hon. Friend the Secretary of State for Health cares deeply about the national health service, its patients and its staff. No doubt the hon. Lady will agree that legal action is expensive, unnecessary and unwarranted, and we hope that the matter can be resolved.

My hon. Friend the Member for Cannock Chase (Amanda Milling) spoke about Rugeley B power station, and some allusion was made to its beauty or otherwise. That is no doubt a matter for extensive debate, but she did indicate that she had held a jobs fair in her constituency. No doubt that was welcomed by those who worked at the Rugeley B power station and by many others. I was also interested to hear about Mill Green, Cannock’s own Bicester village in the making, and look forward to my invitation. She also mentioned Watchman V who is, I believe, the dog of the year. We wish Watchman V well as the mascot in her constituency.

The hon. Member for Blackpool South (Mr Marsden) spoke about tuition fees. I am pleased to be able to reassure him that the statistics show that more disadvantaged young people are now going into university education than ever did under the Labour Government. I would have thought it right to welcome the written statements that have been released today, because Members will have a considerable opportunity over the next six weeks to study them and to return to the matters fully refreshed in the autumn.

My hon. Friend the Member for Southend West (Sir David Amess) gave his usual extremely impressive performance. He mentioned dozens of separate items, and, if I may, I will write to him about his remarks. I was not able to write them down fast enough by hand. I will, if I may, send my best wishes to his mother, who is 104 years of age. He mentioned Jo’s Cervical Cancer Trust, and I am sure we are all fully supportive of its work raising awareness of cervical cancer and the importance of cervical screening—just one of the matters that he mentioned, among many other important subjects.

The hon. Member for Ellesmere Port and Neston (Justin Madders) was concerned about housing, employment security and the NHS. He will be reassured, one hopes, to hear that this Government have built more housing than Labour did in its 13 years in government. This Government also introduced the national living wage and are supporting the NHS to the tune of £10 billion.

My hon. Friend the Member for Telford (Lucy Allan) spoke passionately about her constituency. It is an expanding town, and she is rightly proud that youth unemployment is now at a record low. So much is being done to continue and ensure business investment in the town. She did say there were too many traffic lights, certainly at one junction. No doubt many Members will have some sympathy with that.

The hon. Member for Strangford (Jim Shannon) can be reassured that not only can Hansard understand him but so can everybody in the Chamber, too. He spoke passionately about the history of Northern Ireland and the Orange Order. It was a fascinating, if brief, history lesson. No doubt we will hear more in due course.

The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) spoke of the air quality in London, which Members from across the country no doubt take an interest in, as we in the House of Commons are subject to it. It is not quite as bad as the great stink in the Victorian period, when the curtains of the Palace of Westminster had to be draped in lime to try to disguise the aroma, but there are still pollution issues. No doubt he will continue to be alive to those issues and to represent his constituents accordingly. I will ask the Department for Environment, Food and Rural Affairs to write to him about the rescheduled meeting. He will appreciate that, with the changes that have occurred in recent days, his meeting had to be postponed. That is regrettable, but it can be rearranged. He mentioned the Company of Shipwrights, of which he is a proud member, and made a very important point about those who are detained in India. I will ask the Foreign and Commonwealth Office to write to him about that.

I take this opportunity to wish everyone well over the summer recess, in particular the staff of the House, you and your Deputies, Mr Speaker, and the Chairs of all the Committees—not only the Home Affairs Committee, although perhaps with particular good wishes to that one. Like many other Members, I would like to send my best wishes to the retiring member of staff, Noeleen Delaney. I understand she is approaching the thirtieth anniversary of her employment here. She has, no doubt, served generations of Members of Parliament with the same excellence, warmth and kindness of spirit throughout the past three decades. [Hon. Members: “Hear, hear.”]

It is an honour and privilege to serve in this House. It is a duty that is borne with great humility and service by everyone on all sides. To be a servant of this House and to appear at the Dispatch Box for the first time is a great honour for me. I thank everyone for their good wishes. I wish everyone well over the recess.

[Mr Speaker]

I am grateful, on behalf of the House, to the Deputy Leader, whose warmth and good grace have been hugely appreciated. The same goes for the shadow Leader. It seems a fitting conclusion to our proceedings and I wish everybody a very relaxing and revitalising summer break.

Question put and agreed to.

Resolved,

That this House has considered matters to be raised before the forthcoming adjournment.