Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Tuesday 9th April 2019 Commons Chamber

[Maggie Throup (Erewash) (Con)]

1. What estimate he has made of the average annual savings to hauliers from freezing the level of fuel duty since 2010.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

Fuel duty has been frozen for nine consecutive years, saving money for all those who regularly use our roads. I can confirm that the average road haulier has saved £23,300 per vehicle on fuel since 2010 compared with the pre-2010 escalator plan. However, the benefits to hauliers and motorists of freezing fuel duty must be balanced against the cost to the Exchequer in the context of our need to fund our public services, so we continue to keep it under review.

[Maggie Throup]

Hauliers have definitely been a major beneficiary of the duty freeze, but will my right hon. Friend consider helping the industry further by investing in a new motorway junction between junctions 25 and 26 of the M1 to help improve connectivity throughout the east midlands?

[Mr Hammond]

From 2020, all English road tax will be spent on our roads via a dedicated national roads fund—that will be £28.8 billion between 2020 and 2025, including £25.3 billion for strategic roads. We have spent £120 million on the recently opened smart motorway between junctions 23a and 25 of the M1, which will reduce congestion, but we will, of course, continue to take into account the need for connectivity in planning future roads investment in the east midlands.

[Daniel Zeichner (Cambridge) (Lab)]

The Chancellor says this needs to be balanced against the needs of the Exchequer, but what about the needs of the environment? What effects have we seen during the period of the freeze, with the failure to tackle emissions and with the road transport sector in particular failing compared with others?

[Mr Hammond]

We have an extremely good track record on decarbonising our economy. We have set extremely ambitious targets, and we are ahead of all our significant competitors in delivering them.

[Priti Patel (Witham) (Con)]

The freeze in fuel duty has helped hauliers across Essex, but of course there is another measure that could help our hauliers and businesses even more, which would be to dual the A120. Will my right hon. Friend have a word with the Department for Transport to see how we can use the taxes raised to get this road dualled?

[Mr Hammond]

Never a Treasury questions goes by without my right hon. Friend raising the dualling of the A120. Of course we have a very large fund available, with £25.3 billion for strategic roads, and I am sure my right hon. Friend the Secretary of State for Transport is well aware of the compelling arguments in favour of dualling the A120.

[Jim Shannon (Strangford) (DUP)]

What tax breaks is the Chancellor putting in place so that hauliers are able to continue through the uncertainty on contracts during the transition period as we leave Europe?

[Mr Hammond]

As I have already mentioned, hauliers have benefited very significantly from the freeze in fuel duty, but the hon. Gentleman asks a wider question. If we were to find ourselves leaving the European Union without a deal—a situation that I sincerely hope will not arise—we have a full range of tools available to us, including all the usual tools of fiscal policy. I have headroom within the fiscal rules of just under £27 billion, as I set out at the spring statement, and the Government will work closely with the Bank of England in those circumstances to ensure that fiscal and monetary policy are used to support the UK economy.

[Several hon. Members rose—]

[Kirstene Hair (Angus) (Con)]

Thank you, Mr Speaker. Of course, hauliers and motorists warmly welcome the fuel duty freeze, but they are concerned about the disparity in fuel costs across the country and the impact of the cost of oil—they are not seeing that at the pumps. Will the Chancellor, or a member of his ministerial team, meet me to discuss an independent fuel price regulator and to see whether we can sort out these issues?

[Mr Hammond]

We have a marketplace in fuel in this country, but I understand my hon. Friend’s point. I am sure the Exchequer Secretary would be very happy to meet her to discuss it.

[Mr Speaker]

When she is not busy vice-chairing the all-party group.

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

I chair Labour’s Back-Bench environment, food and rural affairs committee.

The Chancellor always impresses me. He is thoughtful, and I like him a lot. He is thoughtful on Europe and on the environment, but can I take him back to what my hon. Friend the Member for Cambridge (Daniel Zeichner) said? Is it not about time we had a modern taxation system that encourages sustainable transport? We are killing kids and poisoning pregnant women. We know that air pollution is of the utmost importance. I appeal to the Chancellor’s radical instinct: let us have a new form of sustainable taxation.

[Mr Hammond]

I am bemused by the disappearance of Mr Angry, who I am quite used to dealing with at the Dispatch Box. As I said earlier, we have a good track record on decarbonisation and addressing air quality challenges. We provide substantial support for ultra low emission vehicles, we have a highly differentiated vehicle excise duty and company car tax regime, which encourages the purchase of the cleanest and most efficient vehicles, and we will go on seeking to change behaviour through a carefully constructed tax system.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

2. What recent assessment the Government have made of trends in the level of manufacturing output.

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[The Chancellor of the Exchequer (Mr Philip Hammond)]

The Government are committed to making work pay and ensuring that people keep more of the money they earn in their pockets. Last week, we saw another above-inflation increase in the national living wage, meaning that a full-time worker on the national living wage would be earning £690 more over the coming year. This week, the personal allowance has increased to £12,500. A single person on the national minimum wage, working 35 hours a week, would have taken home £9,200 in 2010; this year, they will take home £13,700.

[Alex Chalk]

One way of increasing take-home pay is to create more high-paying jobs in the first place. Does my right hon. Friend agree that Cheltenham’s Government-backed cyber innovation centre, which sees the country’s finest cyber-security minds from GCHQ nurturing small businesses, is an excellent example of how the state and the private sector can combine to boost the economy and generate great jobs to boot?

[Mr Hammond]

I agree that the public and private sectors can work together to support digital businesses, including in the vital area of cyber, and that is why we have established the Cheltenham innovation centre as part of our £1.9 billion commitment to cyber-security.

[Lilian Greenwood (Nottingham South) (Lab)]

18. Last month, Nottingham Trent University released a report mapping Nottingham’s employment trends. It found that, in the 10 years from 2008 to 2018, earnings in our city rose by just 11.6%, compared with 19.9% nationally. Too many of my constituents are working hard, but are still in poverty and are reliant on benefits just to make ends meet. What specific action is the Chancellor taking to tackle low pay and economic insecurity in order to ensure that people in Nottingham do not just have work but have good work?

[Mr Hammond]

There are two parts to our approach. The first is a laser-like focus on raising productivity—investing in the infrastructure and skills that we need to raise productivity—because that is the only way to raise wages sustainably. We have also introduced the national living wage, and have increased it way ahead of inflation. We will have to set a new target for the national living wage from next year. I announced in the Budget that I have asked Professor Arindrajit Dube to conduct a survey of the literature on minimum wages and employment opportunities for people on low pay, so that we can address this issue and seek to raise the pay of the lowest paid as fast as we can without destroying their employment opportunities.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Further increases in the national living wage are vital to tackling the low pay culture, but does the Chancellor agree that as the rates increase, so does the risk of non-compliance? Does he therefore think that Her Majesty’s Revenue and Customs is adequately resourced to be able to go after rogue employers who do not pay a fair wage?

[Mr Hammond]

Yes, my right hon. Friend is right. We have provided HMRC with additional resources, and wherever HMRC get reports, it pursues them. It also proactively looks for employers who are not meeting their legal obligation.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

A recent survey by the Centre for Labour and Social Studies showed that a third of workers struggle with the cost of living and two thirds of workers expect to get poorer this year, yet FTSE 100 CEOs have been seeing their wages rise six times as fast as those of the average worker. To me, that sounds like a laser-like focus on increasing inequality.

[Mr Hammond]

The Government are responsible for the productivity agenda and the setting of targets for the national living wage. As I have already set out, working in those two tracks is the way to deal with the challenge of low pay. I can tell the hon. Lady what will not help workers on low pay: having their personal allowance taken away from them.

[Stephen McPartland (Stevenage) (Con)]

6. What progress he has made on reducing the total amount of tax that people pay.

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[Sir Desmond Swayne (New Forest West) (Con)]

12. What steps he is taking to improve the performance of the financial services sector.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

UK financial services are globally competitive, and this Government are focused on maintaining that competitiveness. Leaving the EU with a deal will ensure that financial services businesses can continue to operate across borders into the EU. Through our global financial partnerships initiative, we will also build a new framework for rest-of-the-world cross-border financial services.

[Sir Desmond Swayne]

How will we ensure that those businesses do not end up being regulated from overseas?

[Mr Hammond]

We have always been clear that the UK must maintain control of the regulations governing one of its most important sectors and, crucially, a sector that the UK taxpayer stands behind. Those regulations have to be made in the UK. The agreement we have negotiated with the EU in the political declaration means that each side would make its own choices on regulation through its own legislative processes, and if any of these lead to our respective regulatory regimes no longer being equivalent, either side would have the right to withdraw market access.

[Mary Creagh (Wakefield) (Lab)]

The financial services sector is not above the law. If I can take the Chancellor back to the loan charge, what steps is he taking against accounting firms that told my constituents, who are working in the IT sector with a Government Department, that these schemes were perfectly legal? My constituents now find themselves laden with debt from HMRC and paying these things back. What is he doing about those corrupt accountants?

[Mr Hammond]

The hon. Lady is absolutely right. As well as pursuing tax avoiders themselves, we have to pursue those who promote tax avoidance. My right hon. Friend the Financial Secretary has just told me that there are over 100 promoters of avoidance schemes who are currently under active investigation by HMRC.

[Bim Afolami (Hitchin and Harpenden) (Con)]

14. What steps his Department is taking to encourage people to save for their pensions.

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[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

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

[The Chancellor of the Exchequer (Mr Philip Hammond)]

My principal responsibility is to ensure economic stability and the continued prosperity of this country. I will do that through: supporting our vital public services, such as the NHS; investing in Britain’s future; keeping taxes low; and continuing to reduce the nation’s debt. Securing an orderly departure from the EU will allow our mutual trade to flourish and encourage businesses to invest more in Britain’s productive capacity.

[Emma Hardy]

Shoplifting crime is increasing, antisocial behaviour crime is increasing, violent crime is increasing. The Prime Minister said that austerity is over, so when can we expect to see the Treasury give the Home Office the funding needed to replace the 20,000 police officers lost since 2010?

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[John McDonnell (Hayes and Harlington) (Lab)]

With the Brexit dialogue ongoing it is best to leave exchanges on that topic to the negotiations, although I hope we can all count on the Chancellor, if not everyone on his own side, to continue to insist that no deal is not an option.

Turning to Google, when will the Chancellor tackle the scandal of Google’s tax avoidance? Google has an estimated taxable profit of £8.3 billion in the UK, so it should have a tax bill, according to the Tax Justice Network, of £1.5 billion. That would pay for 60,000 nurses, 50,000 teachers, seven new hospitals, 75 new schools. It pays £67 million. Why is the Chancellor, year on year, letting Google the tax avoider off the hook?

[Mr Philip Hammond]

As the right hon. Gentleman probably knows very well, the issue is a good deal more complex than he suggested in his question. We have announced the introduction of a digital services tax to begin to address the challenge of shaping our tax system to respond to the digital age, but the problem is that we have a set of international tax rules that we are obliged to follow, which were invented in the age when international trade was all about goods. Nowadays it is mostly about services, and much of it is about digital services. The international tax system is simply not fit for purpose and the UK is leading the charge in international forums—including the G20, which will be meeting later this week in Washington—in looking for a new way to allocate profits appropriately between jurisdictions where digital platform businesses are involved.

[John McDonnell]

After nine years in government, that smacks of an excuse, and let me say to the Chancellor that the Government’s digital services tax has been roundly criticised as being too narrow and having artificial carve-outs. Let me move on from one scandal to another: the scandal of London Capital & Finance. LCF collapsed in January, leaving 11,000 investors in the lurch. They had £286 million invested in the company and most of them were not wealthy people. The Financial Conduct Authority was repeatedly warned of LCF’s dubious structure and operations and failed to respond to those warnings. A decade on from the financial crash and our regulatory system is still not fit for purpose. What action is the Chancellor taking to secure justice for the LCF investors and to reform our regulatory system?

[Mr Hammond]

We take very seriously the failure of London Capital & Finance. Last week, my hon. Friend the Economic Secretary directed the FCA to launch an investigation into the company. We will carry that investigation out and look carefully at the findings.

[Chris Heaton-Harris (Daventry) (Con)]

In Question 2 the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) told us how warehousing across the country was full to bursting point as businesses prepared for a no-deal Brexit. In a leaked letter last week, the Cabinet Secretary implied that business was not ready for a no-deal Brexit. Which is correct?

[Mr Hammond]

We know that manufacturing companies have been building precautionary buffer stocks of imported components to give them resilience against any disruption at our ports in the event of a no-deal Brexit—this tends to be larger companies. However, it is also the case, as my hon. Friend knows very well from his work as a Minister, that despite the Government’s attempts to engage with business, there are still far too many businesses who have adopted the famous approach of the ostrich in the sand in relation to this eventuality and are not taking precautionary actions to prepare for the possibility of a no-deal exit.

[Imran Hussain (Bradford East) (Lab)]

T2. In keeping with the non-angry Yorkshire approach, as set out by my hon. Friend the Member for Huddersfield (Mr Sheerman), if, indeed, this Chancellor is thoughtful, he will know that, according to research by the Centre For Towns, Yorkshire’s growing digital sector is being stifled by patchy broadband connectivity across the region, which is costing us money and jobs. Roles continue to flow down south and into London. With the roll-out of the next generation of 5G internet technology, will the Chancellor, in his thoughtfulness, commit to making funding available for the accelerated adoption of this in the Yorkshire region?

[Mr Hammond]

Rolling out full fibre is essential to Britain’s digital future. That will be done largely by the private sector. The public sector’s role will be to provide the appropriate support in areas where full fibre roll-out is not commercially viable, but supporting the urban centres in all our conurbations, including in Yorkshire, will be an early priority for the broadband roll-out programme. I should say to the hon. Gentleman—I hope this will cheer him up—that I recently met an Italian digital entrepreneur who has relocated his business from silicon valley to Sheffield and he said it was the best decision that he ever made.

[Mr Philip Hollobone (Kettering) (Con)]

Given that the people have already decided, presumably the Chancellor does not want a second referendum.

[Mr Hammond]

Contrary to some reports, I have never advocated a second referendum. I simply observed that it is a coherent proposition along with many others that have been discussed in this House.

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[Rachel Maclean (Redditch) (Con)]

Does the Chancellor agree that the announcement that small shops will save up to £8,000 in business rates is a fantastic boost for our high streets? Will he please commit to supporting the bid from Redditch for the future high streets fund?

[Mr Philip Hammond]

Of course, the rates relief that we have offered over a two-year period to smaller independent retailers will help the high street, but retailers have to use that breathing space to adapt to the changing environment that they face. We cannot freeze the high street in aspic and we must face the reality of the digitisation of our economy. So let us work together to transform our high streets so that they are sustainable for the future.

[Ruth George (High Peak) (Lab)]

T6. The Chief Secretary said in response to the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin), who is no longer in his place, that schools would be funded for the additional costs of the teacher pension scheme, yet the Minister for School Standards wrote to me yesterday saying that he was still in the process of reviewing evidence. Schools have not been informed. They have not been given those costs within their budgets and they are having to decide whether to make redundancies because they do not have the information. Please will the Chief Secretary provide clarification?

[Tom Pursglove (Corby) (Con)]

Will the Chancellor explain why the customs union is the wrong policy choice for the future strength of the UK economy?

[Mr Philip Hammond]

The Prime Minister negotiated a deal with the European Union which gave us many of the benefits of being in a customs union, while preserving our ability to conduct an independent trade policy. We put that deal to the House effectively three times and it was defeated three times, so we have to pursue other options.

[Mary Glindon (North Tyneside) (Lab)]

T7. Cuts in alcohol duty have cost the Treasury £4 billion over the last five years. What assessment has the Chancellor made of the impact of those cuts on public health and alcohol-related deaths?

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[David Linden (Glasgow East) (SNP)]

T8.   Housing associations in Parkhead, Tollcross and Shettleston have high levels of tenement stock, and the cost of maintaining it is prohibitive. Will the Chancellor agree to meet me to discuss the case for a modest reduction in VAT to preserve tenement housing, which is a key part of our architectural heritage in Glasgow?

[Mr Philip Hammond]

That is not an issue with which I am familiar, but I should be happy to hear more about it from the hon. Gentleman. Perhaps he would like to write to me in the first instance, setting out the details of his argument.

[Vicky Ford (Chelmsford) (Con)]

In Chelmsford we love our high street. Does my right hon. Friend agree that giving nine out of 10 of our shops a business rates reduction of up to £8,000 a year will help to create a more level playing field between online and bricks-and-mortar shops?

[Mr Hammond]

Yes. As I said earlier, it is essential for the high street to evolve to respond to the digital age, but there is no doubt that smaller shops need a breathing space in which to do so, and reducing their business rates this year and next will help them in that regard.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

T9. May I appeal to Her Majesty’s Revenue and Customs to show some humanity to loan charge victims? They have been coming to me in tears, and we know that, nationally, some have committed suicide. Children are suffering because of tax arrangements made years ago. Will the Government please pause these punitive retrospective charges, and go after the providers with the same vigour with which they are going after the little people?

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Will we continue to invest in the northern powerhouse, and, in particular, will we fully fund the Transport for the North plan for a TransPennine rail upgrade?

[Mr Philip Hammond]

As I said in my recent spring statement, the Government remain committed to the northern powerhouse and to Northern Powerhouse Rail, and I am working on the TransPennine rail upgrade with my right hon. Friend the Transport Secretary.

[Toby Perkins (Chesterfield) (Lab)]

T10.     I welcome what the Chancellor said to my hon. Friend the Member for Wakefield (Mary Creagh) a few minutes ago about investigations into the promoters of some of the disguised remuneration schemes, but that will not do many of the victims much good. A business in Chesterfield is facing bankruptcy because of the charge. How might his review actually help the people who have wrongly taken advantage of this advice?