Topical Questions

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 28th November 2017.

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Photo of Danielle Rowley Danielle Rowley Labour, Midlothian 12:00 am, 28th November 2017

If he will make a statement on his departmental responsibilities.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The Budget laid out the Government’s vision for a global Britain after we leave the European Union, and our ambitious plans to tackle the long-term challenges that we face so that we can build an economy that is fit for the future. Our balanced approach enables us to give households and businesses the support that they will need in the near term, as well as investing in the future of this country. Through investment in research and development, infrastructure, skills and housing, we will seize the opportunities of a rapidly changing economy, while being fair to the next generation by reducing a national debt that remains too large.

Photo of Danielle Rowley Danielle Rowley Labour, Midlothian

Members will have heard last week about the Government’s failure on productivity and growth, and about the OBR’s downward revision of its forecast for the economy over the current Parliament. Can the Chancellor tell us how much worse off someone on the national living wage will be in 2020, compared with the forecast in March, as a result of the Government’s failure on wages?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

As I have already told the House today, as a result of the increase that we announced in the Budget, somebody on the national living wage will be £2,000 a year better off than when it was introduced in 2016. That is before tax. If we take into account the effect of the significant increase in the personal allowance threshold, which has reduced tax for 30 million people and taken 4 million people out of tax altogether, the same full-time worker on the national living wage will be £3,600 a year better off compared with 2010.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

Small businesses in my constituency suffer from late payments from their larger clients. Some firms have been forced to accept discounts of up to 10% just to get paid within 90 days. The Government have introduced welcome measures to make large firms behave more transparently on payments, but does the Chancellor stand ready to take further action to stop big firms using small businesses as a source of cheap loans?

Photo of Andrew Jones Andrew Jones The Exchequer Secretary

We know that late payments are a serious issue for many small businesses, and that is why we are acting to tackle unfair practices. As my hon. Friend mentioned, we have legislated to improve transparency, requiring large businesses to report on their payment practices. All 32 of the Government’s strategic suppliers have signed the prompt payment code, and we have appointed Paul Uppal as the UK’s first small business commissioner to support small businesses in resolving disputes with larger firms.

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

Why have the Government not brought forward an amendment of the law resolution in today’s Budget resolutions? This is almost unprecedented and a tactic used only when the issue to be dealt with is urgent. It will restrict the ability of hon. Members on both sides of the House to move amendments and to address the range of economic and social needs of our community.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The right hon. Gentleman is wrong: it is not without precedent. We did not move an amendment of the law resolution in relation to the Finance Bill that has just gone through Parliament. It is a small but worthwhile modernisation measure that focuses the debate on the measures that we are putting before Parliament in the Finance Bill.

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

I will tell the Chancellor why he did not bring forward an amendment of the law resolution: it is because he wishes to avoid debate on some of the key issues facing our communities. Let me raise one of those questions, which was totally neglected last week in the Budget. The Chancellor received representations from Action for Children, the Local Government Association and Barnardo’s on the crisis in children’s services. Sir Tony Hawkhead, chief executive of Action for Children, has said that

“children’s services are on an unstable and dangerous footing. We’re calling on the Government to prioritise the services children need before this crisis turns into a catastrophe”.

What was in the Chancellor’s mind when he prioritised giving nearly £5 billion to the banks rather than plugging the gap in children’s services for those most in need in our society?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

There will be more than adequate time to discuss the measures in the Finance Bill, but the debate on the Finance Bill is a debate about the measures being put forward by the Government under the Finance Bill. That is what Parliament is here to debate and that is what we will have time to debate under this arrangement.

Photo of Robert Jenrick Robert Jenrick Conservative, Newark

Businesses in Newark welcome rising public investment in research and development, but even more they welcome the chance to do it themselves with lower business taxes under this Government. What will the Chancellor do to encourage more businesses to take up the increased research and development tax credits and the patent box delivered in the Budget?

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

The Government recognise the vital importance of R and D, driving up investment in business and improving our productivity, which is why R and D investment as a proportion of GDP is on the rise, and we will push further towards our target of 2.4%. In the Budget we announced an increase in R and D expenditure tax credits from 11% to 12%.

Photo of Kirsty Blackman Kirsty Blackman Shadow SNP Spokesperson (Economy), SNP Deputy Leader

In the Budget, more than £1 billion of the so-called extra money for Scotland was in the form of financial transaction money—that is money that the Scottish Government have to pay back. The block grant for spending on frontline services is down £230 million in real terms. How can the Chancellor suggest that a £230 million reduction for Scotland is a good deal for our country?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

Scotland’s spending power has been increased by £2 billion in this Budget, including financial transactions, which support fantastic schemes such as Help to Buy, but what we need to see is the Scottish National party Government using their powers to deliver for Scotland, including by improving their appalling results in English and maths education.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

I congratulate the Chancellor on freezing the duty on wine and spirits and ensuring that future changes come into effect only after Christmas, but will he now look at the anomaly whereby excellent English sparkling wine, at 11% strength, is taxed at £2.77 a bottle, compared with just £2.16 for higher strength still wine and just 2p a bottle in France? Post-Brexit, will he give a boost to this growing, quality British product?

Photo of Andrew Jones Andrew Jones The Exchequer Secretary

We support the English wine industry, and that is why the autumn Budget announced a freeze on wine duty. Under EU law, duty on higher strength sparkling wine must be the same as that on higher strength sparkling cider, and if we reduced the duty on higher strength sparkling wine, it would mean reducing the duty on a category of alcohol that is effectively associated with problem drinking. I recognise how much of a champion my hon. Friend is of English wine, and he is right to highlight the fact that there are opportunities ahead.

Photo of Hannah Bardell Hannah Bardell Shadow SNP Spokesperson (Trade and Investment)

We welcome the scrapping of VAT for Scotland’s police and fire services—and this Government finally seeing sense on this issue—but in an interview this year the Conservative MSP Murdo Fraser said that

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

I think that is the closest we are going to get to gratitude from the Scottish National party. The fact is that it was a mistake by the SNP to sign up to that in the devolution agreement. Despite that, we did not want to punish the people of Scotland, which is why we have taken action on that VAT as well as freezing whisky duty, thanks to the representations of our fantastic Scottish Conservative colleagues.

Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South

Does my right hon. Friend agree that it is thanks to Conservative action that today the richest 1% are paying 27% of all income tax revenue? That is more than at any time under Labour, and it makes that gap between rich and poor the lowest on record.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The Government are committed to a fair tax system in which those with the broadest shoulders bear the greatest burden, and I am pleased to confirm that my hon. Friend is correct—or almost correct. The latest statistics show that in 2017-18, the top 1% of taxpayers are forecast to pay 28% of all income tax liabilities, and that in 2015-16, income inequality fell to its lowest level since the mid-1980s—under a Conservative Government.

Photo of Lucy Powell Lucy Powell Labour/Co-operative, Manchester Central

Will the Chancellor take this opportunity to confirm to the House the statement that the Prime Minister gave to the on Sunday evening that the Government will reimburse all the moneys that have fallen on Manchester services as a result of the Arena attack, as well as future costs such as the coroner’s inquest, which is just starting?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

I thank the hon. Lady for her question, and I can confirm that that is the case.

Photo of Kevin Foster Kevin Foster Conservative, Torbay

The Chancellor will be aware of the need for investment in Devon’s infrastructure, particularly to ensure the resilience of the coastal railway at Dawlish. What reassurance can he give me that funding will be available to carry out the scheme being proposed by Network Rail and to deliver the aspirations of the Peninsula Rail Task Force?

Photo of Andrew Jones Andrew Jones The Exchequer Secretary

The railway is vital for continued growth and prosperity in south-west England, which is why this Government have invested £400 million in the south-west network. That includes £10 million for the coastal section around Dawlish. The Government have also committed to doubling the spend on renewals in the next control period, and the south-west will benefit from that significant investment.

Photo of Ronnie Cowan Ronnie Cowan Scottish National Party, Inverclyde

The Scottish Government have committed £250,000 to funding four basic income projects across Scotland. This will enable the Scottish Government to make evidence-based policy. Will the UK Government commit themselves to funding a basic income project?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

If the hon. Gentleman is looking for advice on evidence-based policies for Scotland, he needs to look at the education system, for example, where the SNP Government have failed Scottish children and are holding back opportunities.

Photo of Alan Mak Alan Mak Conservative, Havant

Manufacturers such as Kenwood in Havant are boosting productivity by adopting new techniques and technologies as the fourth industrial revolution accelerates. Will my right hon. Friend continue to support SME growth through R and D and innovation?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

My hon. Friend knows that I will. It is only by embracing technology, looking to the future, committing to accepting inevitable changes and working with our workforces and companies to ensure that we are ready for it and ready to take full advantage of it that we can raise living standards sustainably, and that is what we intend to do.

Photo of Chris Williamson Chris Williamson Shadow Minister (Home Office) (Fire and Emergency Services)

I was delighted when the Financial Conduct Authority extended its compensation scheme to cover debt management companies, but will the Chancellor tell the House whether he has had any discussions with the FCA about backdating the compensation scheme to cover the victims of Compass Debt Counsellors? They lost £5.5 million when it was purloined by Compass Debt Counsellors before it went into liquidation in 2016, so will he agree to meet me and the victims?

Photo of Stephen Barclay Stephen Barclay The Economic Secretary to the Treasury

I am always happy to meet the hon. Gentleman. As he is aware, this is a policy area for the FCA, and I am sure that it will set out further details in due course on how historical debt will be covered.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Cities), Shadow SNP Spokesperson (Treasury)

How can the Chancellor justify widening the age pay gap for those under 25, which sees a 17-year-old and a 25-year-old starting on the same date in the same job having a wage difference of £3.63 an hour?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

As I have said, we are raising the minimum wage for younger workers at a higher rate— 4.9% this year—than for the over-25s, but the most important thing is that we help young people to get the experience and training they need to get into workforce, instead of leaving them on the scrapheap, which is what happened under the previous Labour Government.

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

As we are about to have a row in the House about documents being published, may I ask about another document that has gone missing in action, namely the Government’s White Paper on services, financial services in particular, in the light of Brexit? On 16 November, I tabled a question to the Department for Exiting the European Union about when it would be published, but no answer has come as yet. The City of London corporation says that the sector contributes £72 billion to this country’s economy, so it is an important document and I am sure my right hon. Friend agrees.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

I do agree with my right hon. Friend. Financial services is of course a vital sector. The details of the publication of documents is a matter for DExEU, but as she has raised the matter I will look into it and let her know.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

Will the Chancellor tell the House whether the £350 million a week Brexit bonus promised to us by the Foreign Secretary over the weekend has been factored into OBR projections or, indeed, his Budget?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

The OBR is responsible for the forecasts that it delivers to the House, and Robert Chote outlined publicly the basis of the assumptions that the OBR had made in setting those functions.

Photo of Anna Soubry Anna Soubry Conservative, Broxtowe

Yesterday, I attended a summit organised by East Midlands Councils to consider how we can improve investment and the infrastructure in the region. However, I learned that public expenditure in the east midlands on economic affairs, public transport and, notably, transport is the lowest of any region in the entire country. [Interruption.] I know, Mr Speaker; I was equally as shocked given that it is the finest region in the country. In all seriousness, will the Chancellor commit to ensuring that the mighty east midlands will have its fair share in future?

Photo of Andrew Jones Andrew Jones The Exchequer Secretary

It is important to have a strong level of investment in all the regions of our country. My right hon. Friend is clearly a huge champion for the east midlands, and I have met her in the east midlands to discuss the opportunities there. I can confirm that we will be working together to ensure that the east midlands benefits, particularly from HS2.

Photo of John Bercow John Bercow Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Commons Reference Group on Representation and Inclusion Committee

That will be very heartening to the House, because the Minister is a wise fellow and knows that he would otherwise face the irresistible force of Broxtowe and Bolsover combined. I would fear for the hon. Gentleman’s physical wellbeing.

Photo of Kevin Hollinrake Kevin Hollinrake Conservative, Thirsk and Malton

Despite the clear wrongdoings in the banking sector highlighted by the RBS global restructuring group scandal, small and medium-sized enterprises cannot access justice because the banks are too wealthy to sue. The all-party parliamentary group on fair business banking and finance is calling for an independent financial services tribunal to provide accountability. Will my hon. Friend agree to meet me and the group to discuss our proposals?

Photo of Stephen Barclay Stephen Barclay The Economic Secretary to the Treasury

I am of course happy to meet my hon. Friend to discuss the proposals. One of the issues the industry has been discussing is the role of the Financial Ombudsman Service and how it can step in to give greater comfort to those who need to bring claims.

Photo of Tom Pursglove Tom Pursglove Conservative, Corby

One of the key issues raised on the doorsteps of Corby and east Northamptonshire is the NHS. What difference will the additional spending on the health service announced in the Budget last week make to my constituents?

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

My hon. Friend is absolutely right. We have seen increasing demand on the NHS, which is why we have put in an extra £6.3 billion to help us achieve our accident and emergency targets, to help to reduce waiting lists and, importantly, to help us ensure that nurses and other public sector workers are able to get the pay rise they deserve.