Topical Questions

Oral Answers to Questions — Treasury – in the House of Commons on 5th March 2019.

Alert me about debates like this

Photo of Stephen Kinnock Stephen Kinnock Labour, Aberavon

I cannot think of another question to ask, as my question has been responded to.

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

I know that the hon. Gentleman does not believe in the hereditary principle, but I do not think that those words would ever have come out of the mouth of his dad. I think he should have a go. Just say “Topical 1”, young man.

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

I have a sense that by the time I have responded, inspiration will have struck the hon. Gentleman.

My principal responsibility is to ensure economic stability and the continued prosperity of this country. At this juncture, the best way to achieve that objective is to support a negotiated Brexit ensuring a smooth and orderly departure from the EU through a transition period to a new relationship that allows our mutual trade to continue to flourish.

Photo of Stephen Kinnock Stephen Kinnock Labour, Aberavon

Since the introduction of the minimum wage, only 14 employers have been prosecuted by HMRC for failing to pay the minimum wage. Does the Chancellor agree that that is a completely unacceptable state of affairs? What action is he taking to boost the capacity of HMRC to go after those who are not paying the minimum wage?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

HMRC does take action against errant employers. It is always pleased to receive information on suspected non-compliance and will investigate any such cases. I am sorry that the hon. Gentleman had difficulty thinking of a question. Anticipating this situation, I have at least four or five potential questions that he could have asked me, and I am happy to show them to him afterwards.

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

Colleagues, on a discretionary basis I am changing the order, but, believe me, I know why I am changing the order and there is a compelling reason in this instance for doing so.

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

In yesterday’s education debate in Westminster Hall, we heard about a national emergency in school funding based on the National Audit Office’s predictions of £3 billion of savings being required in the next year—and I have often gone on about the £2 billion shortfall in children’s social care. Will schools and children’s social care be at the top of the Chancellor’s priority list in the forthcoming comprehensive spending review?

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

We were able to increase the education budget by £1.3 billion last year, which means there have been real-terms funding increases per pupil. We are already the top spenders in the G7 as a proportion of GDP, according to the OECD. But I do recognise that we need to make sure that, going into the future, our education system is properly supported. I would be delighted to meet my hon. Friend and colleagues to discuss this further.

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

When the Conservatives lost their majority at the last election, the Chancellor conjured up a £1 billion bung to the Democratic Unionist party to buy the Tories back into office. Yesterday, with the announcement of the towns fund, we reached a new low in politics in this country, with the attempt by the Government to purchase the votes of Labour MPs to vote for the Brexit deal. Pork barrel politics has become the new norm under this Government. Can I ask the Chancellor: if the price of a DUP vote has been £100 million each, how much has he calculated a Labour MP’s vote will cost?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

The Government have been investing in our cities across the country with interventions such as the transforming cities fund—a £2.5 billion investment. We believe it is important to mirror those investments to drive productivity and economic growth in our towns. This week we have announced a £1.6 billion intervention to support those towns, building on other interventions that we have made throughout the course of the past 12 months, including the future high streets fund.

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

I can understand why the Chancellor has broken convention today in not responding, because I think he would be ashamed to respond. Let me tell him what the answer is: if a DUP vote is worth £100 million, what Labour MPs were offered yesterday was £6 million.

Let me ask the Chancellor to undertake another calculation. Seven days ago, he was forced to publish the Government’s assessment, again, of how much a no-deal Brexit would cost this country—in today’s prices, nearly £200 billion. How much of a threatened cost to this country will it take for this Chancellor to find a backbone to stand up to the Prime Minister and the European Research Group to prevent no deal or a bad deal? Or is the Secretary of State for Work and Pensions the only Cabinet Minister willing to put country before career?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

Oh dear, oh dear. As the right hon. Gentleman knows very well, I have been working tirelessly to ensure that we avoid a no-deal exit—that we leave the European Union in a smooth and orderly fashion to a new negotiated partnership that allows our complex and important trade relationships to continue to flourish in the future. That is what is spend every working day doing.

Photo of Scott Mann Scott Mann Conservative, North Cornwall

The Chancellor briefly mentioned the spring statement. Can he update the House on his plans for the spring statement on 13 March?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

As my hon. Friend is aware, because I have said it already this afternoon, the spring statement is not a fiscal event, but I will update the House on the Office for Budget Responsibility’s forecasts for the UK economy and for the public finances. I will follow the approach that I took at spring statement 2018 and also provide the House with an update on progress since the 2018 Budget and set out our intended direction for announcements later in the year. Although it is not a fiscal event, I already anticipate my hon. Friend beating a path to my door before the Budget in the autumn.

Photo of Bambos Charalambous Bambos Charalambous Labour, Enfield, Southgate

Schools in my constituency face severe budget pressures running into millions. By 2021, some schools will not be able to afford any teaching assistants, learning support assistants, office staff or site staff. Does the Chancellor realise the perilous state of schools’ finances, and will he announce adequate funding for schools in his spring statement next week?

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

As the Chancellor said, the spring statement is not a fiscal event. We are increasing school funding in real terms per pupil, but of course we need to ensure that we are investing properly in our education system. We are looking at human capital and what will be the most important investments, and we will report on that at the spending review.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

Given the vital work done by East Coast College and Lowestoft Sixth Form College in promoting social mobility and improving the UK’s productivity, will my right hon. Friend take full account of the letter sent on behalf of 164 Members from across the House and increase further education funding, ideally at next week’s spring statement, but if not, at the forthcoming spending review?

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

FE spending is a priority, and we have protected the base rate of funding between 2015 and 2020. I was grateful to receive that letter from colleagues and have organised a meeting on 19 March. I am not sure whether we will be able to fit 164 people in a room, but I hope my hon. Friend will be able to attend.

Photo of Tom Brake Tom Brake Liberal Democrat Spokesperson (International Trade), Liberal Democrat Spokesperson (Exiting the European Union)

Does the Chancellor agree that the £1.6 billion set aside for towns is a pale imitation of the regional growth fund set up under the coalition? Will he look at establishing a Brexit redundancy fund of up to £7.5 billion, to help the 750,000 people who are estimated to lose their jobs in a no-deal scenario?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

As I have told the House many times—I will elaborate more at the spring statement next week—in what I now think is the unlikely event of a no-deal exit, the Government have both fiscal and monetary tools available to them to support the economy. Of course, the likely shock would be on the supply side of the economy, and we would have to be careful that fiscal interventions did not merely stimulate inflation. If we are to find ourselves in that situation, we have the firepower and the clear intent to intervene to support the economy.

Photo of Nigel Huddleston Nigel Huddleston Conservative, Mid Worcestershire

I am sure that all those on the Treasury Bench agree that it is a really important responsibility of Government to ensure that our children and young people can achieve their full potential. With that in mind, can my right hon. Friend assure me that skills and education funding will receive the priority attention it deserves in the upcoming spending round?

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

My hon. Friend is right. We also need to ensure that we are spending money on the right things. For example, the changes this Government have made to phonics have seen our children go from some of the poorest readers in Europe to some of the best. It is about money, but it is also about what we do with that money.

Photo of Dan Jarvis Dan Jarvis Labour, Barnsley Central

Given the urgent need for clarity on post-Brexit regional funding, when do the Government intend to launch the consultation on the UK shared prosperity fund? [R]

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

We regard the UK shared prosperity fund as very important, and we will launch a consultation this year on plans for the fund.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

Will the Chancellor tell the House how many people in my Dover and Deal constituency, since 2010, are either paying no income tax whatsoever, thanks to Government policies, or have seen an income tax cut? While he is about it, could he put that in a spreadsheet for every single constituency so that the whole House can see what has been done?

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

It is not possible to provide an estimate down at constituency level about the impacts of the changes in the personal allowance, but I can inform my hon. Friend that no fewer than 234,000 individuals have been taken out of income tax altogether who are living in the south-east, which obviously includes Dover.

Photo of Patrick Grady Patrick Grady SNP Chief Whip

Does the Chancellor agree with his right hon. Friend the Environment Secretary, who has told me on a number of occasions that he believes other European countries are looking enviously at the United Kingdom’s withdrawal deal, especially in the context of all the economic analysis the Treasury has carried out on Brexit scenarios?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

I am not in a position to comment on private conversations that the hon. Gentleman may have had with my right hon. Friend the Environment Secretary, but I can tell him that I agree with everything my right hon. Friend has said at this Dispatch Box.

Photo of Henry Smith Henry Smith Conservative, Crawley

What assessment has the Treasury made of the impact of air passenger duty on regional and short-haul airlines?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

Air passenger duty is a per passenger levy paid by all airlines, so there is no reason to believe that it discriminates against smaller airlines. We have now chosen to freeze APD on short-haul flights for eight years and to take children out of it altogether. The Labour party of course want to hike it with its holiday tax.

Photo of Laura Smith Laura Smith Shadow Minister (Cabinet Office)

What is the Chancellor doing to make sure local authorities have sufficient funding to allow care providers to pay sleep-in shifts at a national living wage rate?

Photo of Nicky Morgan Nicky Morgan Chair, Treasury Committee

The Treasury Committee will today publish the Economic Secretary’s letter to me of 30 January on the current solution to problems faced by mortgage prisoners. This solution requires the private sector to be receptive to providing new mortgages to mortgage prisoners currently trapped with inactive lenders. What update can Ministers provide on the promised Treasury officials’ work with those lenders?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

I can tell my right hon. Friend that I am in conversation with the Financial Conduct Authority about its move to a relative rather than an absolute test. I note that there are a range of views out there about how this problem can be dealt with. The FCA has said that it will come back later this spring with its response, and I am happy to meet my right hon. Friend to discuss her concerns further.

Photo of Helen Goodman Helen Goodman Shadow Minister (Foreign and Commonwealth Affairs)

This morning, the Financial Times entitled its editorial, “UK territories need to embrace transparency”, prompted by the Government’s decision to pull a vote they knew they were going to lose last night. Does the Chancellor of the Exchequer not feel that he is completely out of kilter with the spirit of the modern age?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Some amendments were tabled on Thursday, and given the constitutional implications of those amendments, I think it is right that the Government work across Departments—with the Ministry of Justice and the Foreign Office—and have dialogue with the Crown dependencies and overseas territories to resolve the matter as the amendments suggested.

Photo of Esther McVey Esther McVey Conservative, Tatton

Adding to the calls of colleagues, may I ask the Chancellor to ensure that more money is provided for schools? Schools across the country desperately need it, particularly in Cheshire, which is the lowest funded.

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

In response to my right hon. Friend, I can say that one of the things we have done is to introduce a national funding formula to make sure schools funding is more fair across the country, and it is getting fairer every year. I would be delighted to meet her and other colleagues.

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

The Chancellor has claimed that the best way to protect the public finances from a decline in the motor industry post-Brexit is to back the PM’s deal. The Society of Motor Manufacturers and Traders says the best way is for the Prime Minister to abandon her red lines and be part of a customs union. Who is right?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

As the Prime Minister has explained to the House many times, the deal that we have negotiated with the European Union provides for most of the benefits of a customs union, while still enabling the United Kingdom in certain circumstances to be able to strike trade deals with third countries. That is a win-win outcome, and the House should get behind it.

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

Is it the intention that we will be publishing our draft tariff schedule in the event of no deal before the meaningful vote?

Photo of Philip Hammond Philip Hammond The Chancellor of the Exchequer

I cannot give my hon. Friend a clear answer on a specific date, but soon as we are in a position to publish the tariff schedule we will do so.

Photo of John Cryer John Cryer Labour, Leyton and Wanstead

Personal debt is now higher than it has ever been in British history. Household debt is now also higher than it has ever been and has increased by nearly £1,000 in the past year alone. How sustainable is that?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

That is why the Government are concerned that the establishment of a single financial guidance body should happen quickly this year. Some £56 million is spent on debt advice to 530,000 people. This is an area I take very seriously, and I will be going to the credit union conference on Saturday to outline some more policy initiatives.

Several hon. Members:

rose—