Spring Statement

Catherine McKinnell Excerpts

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

The hon. Lady is nothing if not cynical. Funding for any bodies will be considered in the spending review, and I would be very happy to have a representation from her.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Chancellor made a welcome but passing comment in respect of Northern Powerhouse Rail, but when will he bring forward investment in the east coast main line to make it fit for purpose and HS2-ready? Without that investment north of York, the communities on the HS2 east coast main line risk being further away from, rather than closer to, the required connections.

[Mr Hammond]

We are allocating capital funding to our railway at the fastest rate than at any time since the Victorians. The way it works, as I think the hon. Lady knows, is that we allocate the funding for the so-called control periods of investment in the railway and the Transport Secretary then works with Network Rail to prioritise that investment. I will pass on to him the hon. Lady’s concerns.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 5th March 2019 Commons Chamber

[John Glen]

I cannot give my hon. Friend the exact figure, but we are anxious to crack down on suspicious activity when reports give us reason to believe that further measures are necessary. We have taken action in improving cross-governmental co-ordination, and we are working closely with the Home Office on the suspicious activity reports.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Financial Secretary was unable to answer this question yesterday, so I shall ask it again. Can the Economic Secretary explain why, although the call for evidence on extending corporate liability for economic crime closed two years ago, we have yet to receive a response or see any action?

[John Glen]

The Ministry of Justice is looking at that, and will present its response to the call for evidence later this year.

Tax Avoidance, Evasion and Compliance

Catherine McKinnell Excerpts

Monday 4th March 2019 Commons Chamber

[Mel Stride]

I thank my hon. Friend, and I take it on the chin. I am bang to rights. I and this Government are guilty of lowering taxes, particularly for the lowest paid in our country. He refers to the increase in the personal allowance, and he is absolutely right that, since 2010, some 4 million people have been taken out of tax altogether—I am extremely proud of that fact.

It is often suggested by the Opposition that the wealthiest get away with it. Well, they certainly do not. Under this Government, the top 1% pay 28% of all income tax; under Labour, it was about 24.5%.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Is not the Government’s decision to pull the Financial Services (Implementation of Legislation) Bill in the face of the amendment on public registers of beneficial ownership, tabled by my formidable right hon. Friend the Member for Barking (Dame Margaret Hodge), reflective of their entire approach to the wider issue? Can the Minister confirm when the Government will finally take decisive action on extending corporate liability for economic crime? Their call for evidence closed two years ago and we are still waiting for a response.

[Mel Stride]

The hon. Lady will know that this Government have an exemplary record when it comes to clamping down on tax avoidance, evasion and non-compliance, including overseas. We have been at the vanguard of the base erosion and profit shifting project, and in 2015 we brought in the diverted profits tax, which has already saved some £700 million. We are very active in this space and I refer her to my earlier answer on why we have delayed the legislation today.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mr Hammond]

The sting was in the tale. I am delighted to welcome the new jobs that have been created in Harborough through the action of the council, no doubt with strong encouragement from my hon. Friend. The Government are keeping taxes low and are helping start-ups to access the support that they need. That is why 3.4 million new jobs and 1.2 million more businesses have been created since 2010. With regard to his generous invitation, as I visited his constituency and had the pleasure of seeing what was going on there only very recently, if he does not mind, I will offer it to one of my team.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Given that the Government’s own analysis shows that every region and every nation of the country will be poorer under any form of Brexit, does the Chancellor really believe that the lowest paid will be better off as a result of us leaving the EU?

[Mr Hammond]

The hon. Lady’s statistics are wrong. It is not right to say that every region will be worse off. Every region under every scenario will be better off. The UK economy will continue growing. [Interruption.] The UK economy will continue growing. There is no doubt, as the published cross-Government analysis shows, that leaving with a deal will best protect the UK economy and will be in the interests of all our constituents. I urge the hon. Lady to get behind the deal.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 11th December 2018 Commons Chamber

[Mr Hammond]

First, I acknowledge my right hon. Friend’s tireless work in campaigning to improve infrastructure and boost productivity in the Essex region, including her chairing of the Great Eastern Mainline Taskforce. We expect about £47.9 billion to be spent on the railway nationally between 2019 and 2024. I very much look forward to hearing the outcome of the Great Eastern Mainline Taskforce study. Regarding the A120, the Government are carefully considering Essex County Council’s proposals for a new dual carriageway to ensure that a robust plan is ready should that project secure funding in RIS 2—the second road investment strategy.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

“State of the North 2018”, a report published by the Institute for Public Policy Research North earlier this month, highlighted the fact that public spending in the north of England fell by £6.3 billion since 2009-10 while spending in the south-east and the south-west was up by £3.2 million in the same period. Does this not demonstrate that the northern powerhouse is nothing but a vacuous slogan? What does the Chancellor assess will be the infrastructure funding available once we leave the EU?

[Mr Hammond]

We have had this one before. The Institute for Public Policy Research consistently publishes these figures and they are consistently wrong. I would urge the hon. Lady to look at the Infrastructure and Projects Authority’s figure. The problem with the IPPR is that it needs also to look at central Government funding to the regions. When we look at central Government funding to the regions, we will see a very different picture.

Leaving the EU: Economic Analysis

Catherine McKinnell Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

I would make two points to my hon. Friend. First, this is not a Treasury report, as such, but as I have just outlined, it has involved discussions right across the whole of the Government. Secondly, on future trade deals, he will find buried within the detail that in fact assumptions have been made about future trade deals with countries such as the United States, China and India.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The analysis published by the Government today, while not entirely clear in its picture, does highlight the specific impact that a bad Brexit would have on the north-east region. Today’s figures provide the modelling for the north-east against a Chequers deal and an average free trade arrangement, but uses no deal as a base for that analysis. Can the Minister confirm today the impact on the economy of the north-east of a no deal and the Government’s intended deal as compared with the status quo—remaining in the EU?

[Mel Stride]

As I identified earlier, a no deal, as compared to the Chequers deal and the sensitivity analysis around that, would see every region, country and sector of the UK economy disadvantaged as a consequence. As the hon. Lady will see from the analysis presented, the impact of a no deal would be particularly felt in the north-east. That is the case also with the west midlands and the east midlands, where manufacturing is particularly prevalent. The model also showed potential impacts on agriculture, with a strong impact in areas such as Wales, Northern Ireland and Scotland.

EU Customs Union and Draft Withdrawal Agreement: Cost

Catherine McKinnell Excerpts

Monday 22nd October 2018 Commons Chamber

[John Glen]

It is important that we honour the decision of the British people and that we come out with an arrangement that gives us the optimal long-term relationship with the EU and also a chance to exploit the opportunities in the world economy beyond the EU, which is growing faster.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Last October, I asked the Chancellor in the Treasury Committee whether the benefits of feasible future trade deals outweighed the costs of leaving the single market and the customs union. He could not give me a clear response. Is the Minister any closer to giving a clear response today?

[John Glen]

Such an answer is dependent on so many conditions and the determination of what is in those trade deals, so I am sorry, but I cannot give a precise answer.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 11th September 2018 Commons Chamber

[Mr Philip Hammond]

I certainly agree with my hon. Friend that the Royal Navy is vital to the defence of Britain’s interests around the world, and in peacetime it is the principal way in which we can project our power and military influence around the world. We are waiting for the conclusion of the modernising defence review that is being undertaken by the Defence Secretary with the Cabinet Office. Once we have received that, we will be able to work with the Ministry of Defence to find a way forward out of the very considerable budgetary challenges that that Ministry faces.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

In March, the Government postponed the closure of the childcare voucher scheme to new entrants to 4 October, during the forthcoming parliamentary recess, reflecting concerns about its impact on low-income families in particular. With the closure now imminent, what work have the Government done to assess the impact on low-income families?

[Elizabeth Truss]

The issue with the current childcare vouchers scheme is that only people whose employers sign up to the scheme are eligible. Under tax-free childcare, everybody will be eligible, regardless of whether they are self-employed or working for an employer. We wanted a bit more time to transition from one scheme to the other. Tax-free childcare is now up and running, and we are ready to transition to that system.

Oral Answers to Questions

Catherine McKinnell Excerpts

Tuesday 3rd July 2018 Commons Chamber

[Mr Hammond]

Business investment in the UK over the last eight years has recovered significantly since the financial crisis, but right now, as my right hon. Friend knows, there is a degree of uncertainty. We need to get through this period of uncertainty in order to see a continuing commitment by business to invest in the UK economy, and that is what the Government are committed to doing.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The Chancellor says that we need to deal with bogus self-employment, and I absolutely agree. One in 10 workers in the north-east are on zero-hours contracts, in temporary roles, or in low-paid and often bogus self-employment. What will the Chancellor do to ensure that these new jobs are genuinely sustainable roles, and that people are not leading their lives in insecure work without real employment rights?

[Mr Hammond]

The overwhelming majority of the over 1,000 new jobs a day that have been created since the 2010 general election have been conventional jobs; only a tiny fraction of people in the workforce are on zero-hours contracts—less than 2.8%. Zero-hour contracts do have a role to play, but the Government have taken action to make sure they are not abused, and we will continue to take action to make sure that the flexibilities that are essential to the operation of our labour market and the attraction of the UK for international investment are not abused.

Customs and Borders

Catherine McKinnell Excerpts

Thursday 26th April 2018 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I am delighted to follow the hon. Member for Eddisbury (Antoinette Sandbach).

I agree with much of what has been said today, but I want to talk specifically about my own region, because nowhere in Britain will be harder hit by Brexit than the north-east. It is projected that as a result of the Government’s preferred outcome of a comprehensive free trade agreement, growth in the north-east could take a 11% hit, whereas if we ended up with the alarmingly possible no-deal scenario, there could be a staggering 16% hit.

We are significantly more exposed to the risks of a bad deal—or, indeed, no deal—than other parts of the country. The north-east is the only region in England with a consistent surplus in goods and services trade with the EU. We export 60% of our goods and services to European markets, which is a larger proportion than any other region. Many thousands of valuable local jobs rely on a good Brexit deal that would secure frictionless, two-way access between Britain and the EU. Without that access, those jobs will be at risk, and given that we have one of the highest unemployment rates in the country, that is something that our local economy simply cannot afford.

[Helen Goodman]

I agree wholeheartedly with my hon. Friend. Is she as alarmed as I am that those projections would result in unemployment in our region rising to 20%, meaning 200,000 people without work?

[Catherine McKinnell]

It does not bear thinking about. I and my hon. Friend are not alone in our concerns. Last July, when the North East chamber of commerce, which represents more than 3,000 businesses of all sizes across the region, conducted a survey of its members, 88% of respondents said that they wished to remain in some kind of single market and customs union. Unsurprisingly, the proportion is even higher among those who export solely to the EU.

The confusion and uncertainty is particularly felt by small and medium-sized enterprises in the north-east, especially those that currently export only to the EU and have no idea what the future holds. The situation has certainly not been improved by rumours that the Department for International Trade will in future provide support only to firms with a turnover of more than £4 million. I hope that the Minister will disabuse people of that concern.

The chief executive of the North East chamber of commerce, James Ramsbotham, wrote to the Secretary of State for Business, Energy and Industrial Strategy in February to express his concerns about the forecasted harmful effects of Brexit on the north-east and the Government’s strategy to mitigate them. More than two months after he wrote that letter, he is still waiting for a reply. It is worth quoting from his letter at length:

“I was not surprised that the biggest potential impact is on North East England. As you know, we are the region with the best record at trading with the rest of the EU: an achievement delivered by many Chamber members. It is to be expected that anything which makes doing business with Europe harder will have a greater impact here. I am, however, very disturbed that Government has so far failed to adequately allay the obvious concerns this has created among our members, even before these assessments became public.

You will recall the Government was elected last June on a manifesto that said closing the gap between London and other parts of the UK is ‘the biggest prize in Britain today’, a ‘great endeavour’, and that the Conservative Party was ‘determined to lead the way in the next Parliament’. These forecasts suggest the gap will not reduce but grow significantly wider. If there are figures being shared around Whitehall that suggest your Government’s stated top priority could be seriously undermined, I would expect to see some concerted action to tackle it.

I assume that Government must expect a better outcome from Brexit than that indicated by these forecasts, otherwise you would not be going through with this plan. Given the manifesto commitments mentioned above, I also assume that you expect it to be at least as good for North East England, if not better, than for London. I therefore assume you must have some evidence to support this. It is beyond time for some more frank communication from Government so we can understand the basis of this confidence.

In light of these forecasts, Government should re-think its position on leaving the Customs Union. It seems clear that to do so will exacerbate the risks to the economy, particularly in our region. The freedom to pursue independent trade deals with other countries will present opportunities—but it will also present significant risks, involve great complexity and require huge capacity building. We have not yet seen any evidence to suggest that the opportunities can genuinely be greater than the negative impact of disrupting trade with our nearest markets.

If there is sufficient evidence to show there will be benefits from leaving the Customs Union, then there should be consideration of extending the implementation period. The time to put in place the capacity to deliver such trade deals, and the time for businesses to adjust to new terms of trade and respond to a signal that they should prioritise different markets, is perilously short.

In the meantime, we should be seeing significant investments going in to the support structures to help businesses make these adjustments, and in to the agencies that must manage major new processes—not least HMRC. At present we do not see this and businesses have very limited sources of expert advice available.”

It is difficult to imagine a more damning assessment of the Government’s approach. It is shocking that these calls for clarity, from a body that speaks on behalf of the north-east’s business community, have so far been ignored. I fear that that confirms that the Government do not have our region’s best interests at heart, or that they simply have their head in the sand.

I want to end by asking the Minister a fundamental question: how do the Government intend to close the gap between London and the north-east when all the evidence suggests that their Brexit policy—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order.