Oral Answers to Questions

James Cartlidge Excerpts

Tuesday 15th November 2022 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

1. What recent steps he has taken with the Secretary of State for Levelling Up, Housing and Communities to deliver the economic growth potential of the Oxford-Cambridge arc.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

Oxford, Cambridge and, of course, Milton Keynes are part of a globally significant area with world-leading technology, life sciences and space sectors. However, their growth potential is constrained by poor connectivity, a lack of lab space and high housing costs. The Government are committed to working with local authorities and other stakeholders to unlock growth. The first section of East West Rail is in construction and will bring benefits to my hon. Friend’s constituency in 2025.

[Iain Stewart]

I congratulate my hon. Friend on his appointment. A few weeks ago, the hon. Member for Cambridge (Daniel Zeichner) and I hosted an event for the East West main line partnership to launch its report, “Building Better Connections”, which sets out the wider economic benefits of the arc as a whole and the rail line in particular. I urge my hon. Friend to read that report and assure me that any investment decisions will be based on the wider economic benefit, not just on a narrow cost-benefit analysis.

[James Cartlidge]

I am grateful to my hon. Friend for his fine words and welcome. We will consider that report with interest, and I was glad to hear about the event that he hosted with the hon. Member for Cambridge (Daniel Zeichner). I pay tribute to my hon. Friend as a long-standing champion not just of the East West Rail connection, but of the wider growth opportunity that links in with that. This is such an important area not only for international competitiveness, but for the UK economy. As he knows, the first section of East West Rail is already in construction and we will set out the next steps on the later stages shortly. I reassure him that we recognise the significant economic growth that the project could unlock by increasing connectivity and supporting the region’s high productivity sectors.

[Mr Speaker]

In that case, let us bring in Daniel Zeichner, as the other party.

[Daniel Zeichner (Cambridge) (Lab)]

I hear the answer, but this issue is so important not just for the arc, but for unlocking the transport and housing issues in a city such as Cambridge. On different days of the week, we get different views from different Secretaries of State. Can we hear what the Treasury’s view is on the importance of restoring the rail link?

[James Cartlidge]

As a fellow East Anglian MP, it is great to see the hon. Member working in partnership with colleagues on these important matters for his constituency. He will know that the region was singled out by The Economist in August 2022 as being vital to invest in if the UK is to achieve growth and proper investment, and that East West Rail was a key recommendation in the National Infrastructure Commission’s 2017 report to unlock the potential of the Oxford and Cambridge area, including Milton Keynes. That has not changed and we are committed to it.

[Yasmin Qureshi (Bolton South East) (Lab)]

2. What recent estimate he has made of levels of (a) public and (b) private investment in Bolton.

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[Dan Jarvis (Barnsley Central) (Lab)]

10. If he will make an assessment with Cabinet colleagues of the potential merits of reviewing HMRC mileage allowance rates to promote retention and recruitment in the public sector.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

The Government keep the approved mileage allowance payment rate under review. As the rate is set using an average, it is more appropriate for some drivers than for others. Employers, including public sector employers, can agree to reimburse a different amount that better reflects their employee’s circumstances.

[Dan Jarvis]

Petrol costs are up by a third since January, but mileage rates for keyworkers have now been frozen for a decade. That means, for example, that midwives attending home births, social workers safeguarding vulnerable children and palliative nurses providing end-of-life care cannot afford in many cases the petrol they need to do their jobs. Will the Minister look to increase the mileage allowance payment rates?

[James Cartlidge]

The hon. Gentleman makes a fair point. I think we are all conscious of the general increase in costs faced by keyworkers and all our workers, but let me make this point about the specific HMRC-approved mileage allowance payments rate. He will appreciate that, ultimately, it is there as an administrative convenience for both employers and employees. The employer can choose to pay more, though of course they would have to check the tax impact with the employee. We do sympathise about the cost of fuel, but that is why we took that crucial measure in the spring statement to cut the rate of duty on petrol and diesel by 5p a litre for 12 months. That is worth £2.4 billion for everyone who uses an internal combustion engine, whether in the public or the private sector.

[Andrew Selous (South West Bedfordshire) (Con)]

I am sure that I am not the only Member to be concerned that, as MPs, we get considerably more than care workers doing domiciliary care visits. Can we try to even that out, so that some of the lowest-paid people in the public sector get a decent allowance?

[James Cartlidge]

My hon. Friend makes an important point. In my capacity as a constituency MP, I recently met with a domiciliary care company, and it is clear that this cost of running its vehicles is significant. I repeat the point that these approved mileage allowance payments are really there as an administrative convenience, so that employers can support their staff. Employers can pay more, but, obviously, there may be tax implications. The crucial point is that we have cut the tax on both petrol and diesel, and that tax cut was significant. It was only the second time in 20 years that we cut both the main rates of petrol and diesel.

[Claire Hanna (Belfast South) (SDLP)]

13. Whether he plans to review the surcharge rate of the energy profits levy.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

The energy profits levy was introduced from 26 May in response to sharp increases in oil and gas prices and to help fund cost of living support for UK households. It is an additional 25% surcharge on UK oil and gas profits. The Government have calculated that they expect the levy to raise more than £7 billion this financial year. All taxes are kept under review at all times.

[Claire Hanna]

Households and businesses are being crippled by energy costs, with support non-existent in the case of the Northern Ireland energy scheme. At the same time, Shell has reported quarterly profits of £8.2 billion and BP of more than £7 billion, but, under current rules, Shell is not expected to pay any windfall taxes in this year. It is encouraging that there is word that the Government are intending to extend the scope of the windfall tax, and it is not before time. Undoubtedly, there are difficult financial decisions to be taken, but this is not one of them. When even Shell is saying that this tax should be embraced, we know that the policy is in the wrong place. Will the Chancellor commit to increasing the scope of the levy and to closing loopholes on timing, share buybacks and the investment allowances that allow tax to be avoided by diverting profit into polluting and unsustainable fuels?

[James Cartlidge]

To be clear, the levy is an additional 25% surcharge on UK oil and gas profits on top of the existing 40% headline rate of tax, taking the combined rate of tax on those profits to 65%. The hon. Lady is right that the levy contributes to the support that will be going out to Northern Ireland; it will come in a month later, but will be backdated to 1 October, and it will include businesses as well as households.

[Stephen Kinnock (Aberavon) (Lab)]

14. What fiscal steps he plans to take with Cabinet colleagues to support the development of floating offshore wind.

[Wera Hobhouse (Bath) (LD)]

21. What fiscal steps the Government is taking to support the development of floating offshore wind.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

We are committed to developing floating offshore wind to support our energy security and net zero ambitions. The contracts for difference scheme has already supported the first-of-its-kind TwinHub project off the coast of Cornwall, which will deliver enough energy to power 45,000 homes. The floating offshore wind demonstration programme provided £31 million in grant funding to support many other new innovative projects.

[Stephen Kinnock]

Floating offshore wind has the potential to transform the economy and jobs market in my Aberavon constituency and across south Wales, but it will only happen if floating offshore wind substructures and other components are manufactured and assembled locally. There are two concerns: first, the Crown Estate is putting in place leasing criteria that seem to be about the highest bidder rather than maximising local value and content, and secondly, there are rumours flying around that the Government may be cancelling the floating offshore wind manufacturing investment scheme, which will be fundamental to facilitating the whole programme. Will the Minister confirm that he will urge Crown Estates to maximise local content in the criteria and that the Government are 100% committed to the FLOWMIS programme?

[James Cartlidge]

The hon. Gentleman is a staunch campaigner for his constituency’s ability to take advantage of this exciting new technology, and I pay tribute to him for that. As he knows, the Crown Estate works independently to manage the seabed and has an important role in the deployment of floating offshore wind. Its approach for the 4 GW leasing opportunity in the Celtic sea is focused on ensuring the development of this new technology market in the UK as quickly as possible. But, to be clear—cutting to his point about content—the Crown Estate has announced that for the first time it is reforming the tender process to consider supply chain plans, sending a clear signal to the market that UK content is important.

[Wera Hobhouse]

Many renewable energy projects are limited by a lack of grid capacity. We have more wind farms ready for investment in the coming decade than the rest of the world, but the grid is not ready. For future offshore wind projects, who will be paying for the grid connections?

[James Cartlidge]

This issue has certainly captured the imagination in East Anglia, where the hon. Lady may be aware that there are certain proposals to bring forward improvements in the grid, although that is ultimately the responsibility of National Grid. We need to address the grid, but I hope she will agree that the country has already made enormous progress in increasing capacity from offshore wind. She may be aware that in 2011 renewables made up just 9% of our electricity; that figure is now over 40%.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Floating offshore wind is emerging as a major new industry, both globally and for us in the UK, in places such as the Celtic sea. The key question for us is how much of the real economic value of that new industry stays here in the UK. To that end, I encourage my hon. Friend to meet Business, Energy and Industrial Strategy Ministers and the Crown Estate, to ensure that the leasing rounds are properly structured and that the contracts for difference process and other policy tools, such as the FLOWMIS port funding and the freeport policy hopefully coming to south Wales, are all properly aligned to deliver British content.

[James Cartlidge]

I repeat the point I made to the hon. Member for Aberavon (Stephen Kinnock) about content. I hope that addresses some of my right hon. Friend’s concerns, but I am more than happy to meet him first and then feed back to other Ministers and see what more we can do. He is absolutely right that this is an extraordinarily positive opportunity and, if we seize it, it will deliver for parts of our country such as his constituency.

[Virginia Crosbie (Ynys Môn) (Con)]

The BP Mona wind farm, 20 miles off the coast of Anglesey, will generate 1.5 GW of electricity and provide more than 1,500 construction jobs and £3.5 billion of investment in an area desperately in need of good-quality jobs. Will the Minister urge his colleagues in the Senedd to invest in the Holyhead breakwater so that BP Mona can move the project forward, and will he confirm that investment in Holyhead port is the responsibility of the Welsh Government, not the UK Government?

[James Cartlidge]

I cannot think of a colleague who champions energy investment in their constituency quite as much as my hon. Friend. I can confirm that the port of Holyhead is a very important part of the wider transport and economic infrastructure of the UK. I know that the Minister for Aviation, Maritime and Security has written to her and specified quite clearly whose responsibility that is, and she is absolutely correct.

[Mr Speaker]

I call the shadow Minister, Abena Oppong-Asare.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

The Government allow offshore wind but are still banning onshore wind. Ending the ban would give us a vital tool to reach net zero, make Britain a clean energy superpower, and open up new investment and growth opportunities. Keeping the onshore wind ban will make energy bills £16 billion higher between now and 2030. Why on earth are Ministers undermining green growth and cheaper energy by maintaining the self-defeating ban on onshore wind?

[James Cartlidge]

The Government are committed to delivering cheaper, cleaner and more secure power. That is why we included onshore wind in the latest auction round for contracts for difference, which have delivered a 50% technology cost reduction since 2015. The Government recognise the range of community views on onshore wind, and it is important that we strike the right balance between community interests and securing a clean, green energy system for the future. That is why we have committed to consulting on developing local partnerships for supportive communities in England who wish to host new onshore wind infrastructure.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

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[Andrew Selous (South West Bedfordshire) (Con)]

T4. Given that we have an energy crisis, will the Government allow onshore wind where communities want it, require built-in photovoltaics, where they will work, on new homes, and allow solar farms on 3b land?

[The Exchequer Secretary to the Treasury (James Cartlidge)]

Further to my previous answer, the Government are serious about delivering cheaper, cleaner and more secure power. That is why we included onshore wind and solar in the latest contracts for difference auction round, and we will include them in future rounds. The Government recognise the range of community views on onshore wind and the need the prioritise our most productive farmland for food production. It is important that the Government strike the right balance between community interests, food security and securing a clean, green energy system for the future. That is why the planning system is designed to take account of those issues.

[Mr Speaker]

I call SNP spokesperson, Alison Thewliss.

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[Ben Lake (Ceredigion) (PC)]

T2. The Chancellor will be aware of concerns about the adequacy of the £100 payment that the Government have proposed to support off-grid households with the cost of their heating. It is equally concerning that we still await details of when and how it will be paid, as well as the support that will be made available to off-grid businesses. When will the Government publish that information?

[James Cartlidge]

Like the hon. Gentleman, I represent a rural constituency, where probably the majority of households use heating oil. As he knows, the alternative fuel payment will ensure that all households that do not benefit from the energy price guarantee receive support for the cost of the fuel they use. We are currently consulting the Department for Business, Energy and Industrial Strategy on the timing and delivery mechanism for the alternative fuel payment. We are committed to delivering it this winter.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

T10. FairFuelUK’s latest survey of 17,000 motorists and hauliers shows that they continue to be punished by crippling and needlessly high fuel taxation, from which the Treasury has benefited to the tune of £3 billion. That is why I am backing the campaign of The Sun and FairFuelUK to keep the fuel duty cut at the very least. Does the Chancellor agree?

[James Cartlidge]

My hon. Friend, like The Sun newspaper, is a champion of motorists, hauliers and all those in his constituency who rely on petrol and diesel vehicles for their—[Interruption.] Opposition Members laugh, but my hon. Friend is standing up for his constituents and doing the right thing. He is absolutely right to highlight the huge tax cut we put in place in the spring statement, worth £2.4 billion, through 5p a litre off the duty rate on petrol and diesel for 12 months. Of course, I cannot make fiscal decisions at the Dispatch Box, but we do keep these matters under review.

[Imran Hussain (Bradford East) (Lab)]

T5.   Earlier this year, Bradford submitted a levelling-up fund bid—the only bid developed from the grassroots up by local community groups—to build three new community-led health centres that would deliver transformational benefits for Bradford and act to reverse the crippling health inequalities that we face. Ahead of the announcement on Thursday, does the Chancellor see that if he does not back grassroots, community-led transformational projects like this, it is clear that the Government’s levelling-up agenda is truly dead?

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[Richard Fuller (North East Bedfordshire) (Con)]

The Bedford to Cambridge section of East West Rail is rated “unachievable” by the Infrastructure and Projects Authority and a “waste of taxpayers’ money” by the Business Secretary, and growth in the Ox-Cam arc does not depend on it. Can the Chancellor use the autumn statement to finally clear the uncertainty around this deeply flawed project?

[James Cartlidge]

I paid tribute to my hon. Friend’s huge business experience and his time at the Treasury on Second Reading of the UK Infrastructure Bank Bill. Perhaps we should both read the report that my hon. Friend the Member for Milton Keynes South (Iain Stewart) referred to earlier, because as my hon. Friend the Member for North East Bedfordshire (Richard Fuller) knows, we strongly support the growth potential of the Ox-Cam arc. After all, that part of the country is internationally competitive, so it is the sort of place that we need to grow if we are to compete internationally.

[Amy Callaghan (East Dunbartonshire) (SNP)]

Government advice to sit in the shade is not enough to protect our skin. Sunscreen products need to be more affordable. Will the Minister work with me and support my VAT Burn campaign to save the NHS money, keep more cash in our constituents’ pockets and help to protect our skin from melanoma and non-melanoma cancers?

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[Greg Smith (Buckingham) (Con)]

The noble Lord Berkeley in the other place has estimated that scrapping HS2 would save the British taxpayer £147 billion—more pessimistic estimates have the saving at £100 billion. With a day of difficult decisions coming up on Thursday, surely scrapping HS2 is an easy one?

[James Cartlidge]

My hon. Friend is consistent on this point. We are always keen to hear savings suggestions from colleagues, but to be clear, HS2 is a long-term investment that will bring our biggest cities closer together and boost productivity. It currently supports 29,000 jobs and will create 2,000 apprenticeships. Through better connecting the country, it will open up new employment and leisure opportunities for millions of people.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Chancellor just mentioned my good friend Lord Alistair Darling. He should also look at the recent speech made in Huddersfield by another former Chancellor, Sir John Major. His analysis of what has happened to our economy since the Conservatives took over in 2010 is an absolute masterclass in what has gone wrong and what needs to be put right. Will the Chancellor read it and think about it before Thursday?