If he will make a statement on his departmental responsibilities.

As we look ahead to the GDP figures out tomorrow and to the Budget in a month’s time, my focus is on the three key challenges we need to meet as we seek to build an economy that works for everyone: first, protecting the economy by managing short-term uncertainty; secondly, achieving a good Brexit outcome; and, thirdly, addressing the longer term productivity challenge to ensure that real wages, and thus living standards, can continue to rise. Everything my Department does will be focused towards those three objectives.

What revenue has the privatisation programme raised and what would be the cost of nationalising the utilities?

I refer my right hon. Friend to the analysis of the Opposition party’s proposals, if we can call them that, done by the Conservative party at the time of the general election. The Government’s policy is to sell assets when there is no longer a policy reason to retain them and to reinvest the proceeds of such sales in policy priorities. Nationalising assets would increase public sector net debt, which would increase our debt interest bill and divert public spending away from more valuable areas. It would also mean that the future investment needs of any nationalised industries would have to compete for capital with our public services.

I listened very carefully to the Chancellor’s response to Kirsty Blackman and my hon. Friend Wes Streeting on the issue of no deal. May I tell him that his response was crushingly disappointing? Expressions of hope of a deal are just not good enough. The Chancellor knows the economic perils our country faces if there is no deal: he described it, rightly, as a worst-case scenario. May I urge him, in the interests of our country, to have the courage of his convictions, and stand up and face down his opponents in Cabinet and confirm today that, like us, he will not support or vote for a no-deal Brexit?

As the right hon. Gentleman very well knows, our clear objective and priority is to achieve a deal with the European Union. Our preference would be for a deal that gives a comprehensive trade, investment and security partnership between the UK and the European Union in the future. As part of such a deal, we will seek an implementation phase that gives British businesses, and indeed Government agencies, proper time to prepare for the new circumstances they will face.

If the right hon. Gentleman cannot stand up to his opponents on a no-deal Brexit, can he at least stand up to them on the transition period? Business leaders yesterday made it clear that they need certainty now on a sensible transition period, yet the Prime Minister yesterday sowed more confusion in her statement, giving the impression that the transition is to be negotiated only after we have settled on what, as she describes it, the “future partnership” with Europe will be. Businesses cannot wait: they need to plan now; jobs are in jeopardy now. If the Prime Minister is not willing to stand up to the reckless Brexiteers in her party, will the Chancellor? Will the Chancellor make it clear, in a way that the Prime Minister failed to do yesterday and as business leaders have been calling for, that we need the principles of any transition confirmed by the end of this year?

The right hon. Gentleman is correct to say that this matter is urgent and pressing, which is why we were so pleased that last week at the European Council the 27 agreed to start internal preparatory discussions for an implementation period. I am confident that we will be able to give businesses the confidence and certainty they need.

What estimate has been made of the effect on unemployment of the reduction in the corporation tax rate?

As I said earlier, we have cut corporation tax dramatically and as a consequence we raise 50% more in corporation tax today than we did in 2010.

The Chancellor will be aware that the Office for National Statistics has revised downwards the UK positive net international investment position from £470 billion to minus £20 billion. What further shocks of this magnitude does he expect as a result of his Government’s handling of the EU negotiations?

The hon. Gentleman will see, if he looks at that revision, that the cause is lower-than-anticipated returns on UK investment stocks held overseas, principally returns on mining and petroleum-related activities.

The location of Rugeley B power station is a large strategic site in the west midlands. Will my hon. Friend join me in urging all the parties involved in the redevelopment to be ambitious, bold and visionary, and will he outline what Government assistance is available to attract innovative high-tech businesses?

I will most certainly join my hon. Friend in both celebrating the project and urging everybody working on it to be as ambitious as possible. In terms of support, since 2010, my hon. Friend’s area has benefited from more than £300 million in grants to support cutting-edge innovation in the west midlands through Innovate UK. The Government welcome private investment in innovative and high-tech businesses right across the economy, which is why we announced an additional £4.7 billion for research and development at the 2016 autumn statement.

The Scottish National party has repeatedly asked the Government to take action to enable Scotland’s police and fire rescue service to reclaim VAT in the same way as they have done for national bodies such as Highways England. If that action can be taken for Highways England, why not for Police Scotland and the fire and rescue service in Scotland? Will Ministers commit to doing that in the next Budget?

As the hon. and learned Lady will know, when the Scottish Government decided to restructure their police and fire services, they went into that decision with their eyes wide open—they knew what the VAT consequences would be—so it is down to the SNP to ask those questions of itself.

When is the Treasury likely to give the sign-off to phase 2b of HS2, which you will know, Mr Speaker, runs through Cheshire?

I will take the matter up with my right hon. Friend the Secretary of State for Transport and get back to my hon. Friend.

Inflation now stands at a staggering five-year high and businesses in Scotland, Falkirk and across the UK face the prospect of increased trade tariffs post-Brexit. On the high street, it is increasingly a case of bricks versus clicks, and businesses are closing down, as people buy online, leaving town centres struggling. Has the Chancellor spoken to retailers about the possibility of reducing the amount of VAT paid by businesses in our town centres to help them cope with online trade and the impending extra burdens?

We are acutely aware that inflation has spiked, but the overwhelming majority of forecasters expect it to start to fall again in the new year. The spike in inflation has been driven primarily by the depreciation in the value of sterling last year, but I will take the hon. Gentleman’s comments on VAT as a representation for the Budget and will consider them carefully.

May I urge the Chancellor to reject the representations that we have just heard from the shadow Chancellor? Is it not the case that one cannot agree a price until one knows what one is paying for, and that only a fool would write a blank cheque with taxpayers’ money?

My hon. Friend is absolutely right. We should not be giving away our negotiating position when we are entering one of the most important negotiations that the country has ever been involved in, and that is why we need to be prepared for all eventualities. I am delighted to be meeting my hon. Friend tomorrow to discuss the issue in more detail.

We are having difficulties with mobile banking in my constituency. I know of instances in which two different mobile banks have arrived in the same community while other communities have seen no mobile banks at all. We have problems with people queueing in rough weather and getting wet, and problems with paper banking. Will the Chancellor, or some other Minister, propose ways of reorganising mobile banking and making it more user-friendly, and of getting the banks to co-operate with each other to deliver a service that is vital in the highlands?

Mobile branches are vital to many communities, and I am sure that many banks will have heard the hon. Gentleman express his concerns, but these are commercial decisions. It should be recognised that since 2011 the number of branch visits has fallen by roughly a third, that more than 600,000 people aged over 80 are now registered for internet banking, and that a fifth less cash is used for payments. Those changes in the market reflect the way in which branches, including mobile branches, are being used.

Does my hon. Friend accept that the contribution made by UK financial services vastly outweighs any cost of our contribution to the European Union, and that securing a sensible deal from day one is not only an imperative, but much more likely to be achieved through the patient work of my right hon. Friend the Chancellor than through the anti-business rhetoric of Opposition Members?

My hon. Friend is right. The UK financial services industry pays more than £71 billion to the Exchequer in tax and employs more than 1 million people directly and 2.2 million through the sector as a whole, two thirds of whom are outside London. Because of his work as chair of the all-party parliamentary group for Gibraltar, my hon. Friend will be aware of the importance not just of financial services in the UK, but of our links with industries in territories including Gibraltar.

Teachers have travelled from all over the country today to lobby Parliament about severe real-terms cuts in their pay. The Chief Secretary has said that she has lifted the pay cap owing to the pressure that Labour has placed on her, but will she confirm that her Department will fund the recommendations of the pay review body rather than cash-strapped local authorities?

The fact is that teachers received, on average, a 4.6% pay rise last year, including promotions and responsibility allowances. Pay in schools involves a great deal of flexibility, and headteachers can decide how they pay teachers. However, it will be up to the Department for Education to look at the specific circumstances in schools and make those determinations.

Does the Chancellor share my frustration at the fact that since the EU referendum, a number of senior politicians have been talking down the economy? Should they not be talking it up, because we have a great future outside the European Union?

Yes. As I said earlier, the UK economy is fundamentally strong. We have the world’s second largest services export sector at a time when emerging economies across the globe are sucking in new demand for services, and we have a global lead in various areas of emerging technology that will drive the fourth industrial revolution. This country has a bright long-term future. Of course we must deal with short-term uncertainty, and of course we must tackle our productivity challenge, but we are fundamentally in good shape.

Given that support for a single Scottish police force was in the 2011 Scottish Tory manifesto, can we assume that the Government think that the £280 million VAT fee is a price worth paying, or will they finally see sense and scrap the VAT on Scotland’s fire and police services?

The hon. Gentleman’s colleague, Joanna Cherry, asked exactly the same question, and I shall give exactly the same answer. When the Scottish Parliament and Government made that decision, they knew that structuring the police and fire services in the way that they chose would lead to the VAT outcome that they should have expected all along.

What does the Chancellor believe we need to do to improve productivity, which is rightly one of his three priorities?

We need to invest in our infrastructure and the skills of our people, we need to ensure that our high growth businesses have access to long-term capital, and address the regional disparity in productivity performance. If we can tackle those four things, we can start to close Britain’s productivity gap and see real wages rising sustainably over many years ahead.

Speaking to the Treasury Committee earlier this month about the transition agreement for exiting the European Union, the Chancellor said that

“it will still have a very high value at Christmas and early in the New Year. But as we move through 2018, its value to everybody will diminish significantly.”

Yesterday, however, the Prime Minister told us that we will not get a transition agreement until October next year at the earliest. Does the Chancellor stand by the very different view he expressed just a fortnight ago?

As I have said several times today, we are reassured by the fact that at the European Council the 27 agreed to start the internal preparatory discussions on an implementation period. We are absolutely aware of the needs of business in this area, and they have been reinforced again by business leaders this week. We are confident that we will be able to deliver reassurance to business in accordance with its needs.

May I urge my right hon. Friend when looking at the business case for HS2 phase 2b to consider carefully the additional £750 million cost to the Exchequer of building over the Cheshire salt fields?

We discussed this issue when I was a Transport Minister. All the topography and construction implications as the route is finalised will be taken into consideration as part of the business case.

We all remember when the hon. Gentleman was a Transport Minister and he enjoyed telling us how he travelled to work by bus; I remember thinking that the fellow passengers on the bus must have been absolutely exhilarated to know that they were accompanied at the time by the Under-Secretary of State for buses.

The Chancellor acknowledged earlier that the fall in the exchange rate following the Brexit vote has pushed up inflation. What is the Treasury’s estimate of the impact of that on people’s standard of living?

The hon. Lady will be aware of the increase in inflation—CPI inflation stands at 3%. Most forecasts suggest that it might go 0.1% higher before falling steadily from late this year. Obviously any increase in inflation will have a negative impact on real wages, and we very much look forward to CPI inflation falling and real wage growth resuming in this country next year.

Several hon. Members:

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We are out of time, but the temptation to hear remaining colleagues is, frankly, just too powerful.

The Chancellor, in his efforts to secure a good Brexit deal and a transition period, has the confidence and support not only of Members on the Government Benches, but from across the whole of British business, including in Broxtowe—unlike the Labour party, which inspires complete fear with the Marxist mayhem it would put into policy if elected into government. Will my right hon. Friend confirm that it is in the best interests of British business to secure a transition period as a matter of some urgency, and will he do all he can to get that transition period?

Yes, British business has made it clear that it wants the earliest possible certainty about the implementation of interim arrangements. It has also made it very clear that it does not want any Marxist mayhem.

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Can either remaining Member ask a question consisting of 10 words or fewer?

May I make a plea to the Chancellor? A teacher has visited me in the House today, whose school has run out of money for photocopying and for books in the Library. If the Chancellor wants to do something about productivity, he should invest in schools and colleges now.

The hon. Gentleman seems to have missed the announcement just before the summer that we are putting £1.3 billion more into the frontline, not by taking in more taxes, but by using the money we have across government better.

The previous Chancellor of the Exchequer implemented a second homes stamp duty levy, which has delivered £5.11 million into the Cornish economy and is set to deliver 1,000 homes. May I seek an assurance from the Treasury that this money will continue into the future?

We consider all areas of taxation in the run-up to all fiscal events, but I have certainly heard my hon. Friend’s comments and I will take them as a representation.