Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 16th January 2018 Commons Chamber

[Mr Hammond]

My hon. Friend is right. Our level of debt is too high, and there is a reason why that matters. In response to the financial crisis in 2009, the then Government were able to allow debt to rise. If we had a similar crisis now—God forbid—we would be struggling to be able to do that, because debt is already very close to 90% of GDP. It is urgently necessary that we get our debt level down to create the headroom that will enable us to deal with any crisis that comes along in the future, whether internal or external.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is amazing that the Government should want to plant questions about high levels of borrowing, given that they have missed every single one of their deficit reduction targets, and let us not forget that this Conservative Government have borrowed more than any Labour Government in history. Under Labour’s fiscal rules, we would close the deficit on day-to-day spending over five years, but exclude investment spending from that figure. Given the huge challenges that the country faces in relation to productivity, infrastructure and skills—challenges that he has already mentioned—does the Chancellor not recognise that that is a prudent and sensible way forward?

[Mr Hammond]

No, and neither do the Opposition. That is why they have already recognised that their plans would deliver the run on the pound for which they are wargaming. I will take no lectures from a party that oversaw a 165% increase in debt, and is proposing to add a further £500 billion to our debt level just when the Government are delivering a reduction in debt.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 24th October 2017 Commons Chamber

[Mr Hammond]

No. Of course a Government need to be able to respond to an external shock, but a prudent Government have got the economy in good shape to respond before such a shock arises. The problem in 2008-09 was that the then Labour Government were borrowing tens of billions of pounds at the top of the economic cycle—grossly irresponsibly.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

The major cause of the deficit was of course the collapse in tax revenue following the global financial crisis in 2008, yet that is exactly what we will face again unless there is a transitional deal with the EU to allow our world-leading financial services sector—it contributes £66 billion a year in tax revenue—to operate legally within the single market. As my hon. Friend the Member for Nottingham East (Mr Leslie) has already said, we have been asking the Government all year to confirm that there will be a transitional deal. As today is the penultimate Treasury questions before the end of the year, the last Treasury questions before the Budget, and—if hon. Members have read the papers—perhaps the Chancellor’s last Treasury questions ever, will the Government promise UK-based firms a transitional deal guaranteeing market access before the end of this year?

[Mr Hammond]

As I have already said, the Government have made it clear—the Prime Minister set this out in the Florence speech—that we want to agree an implementation period as part of a deal with the European Union. We are greatly encouraged by the fact that, at last week’s European Council, the 27 agreed to start internal preparatory discussions on guidelines in relation to an implementation period. We are confident that that will give British businesses confidence that we are going to provide them with the certainty they require.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 18th April 2017 Commons Chamber

[Mr Hammond]

I am not sure what the worst case scenario that the hon. Lady is talking about relates to. We have heard various figures bandied around in Brussels in terms of an exit charge. The work that the Government have been doing—which I was asked about earlier—relates to the economic and fiscal impact of different possible exit scenarios. The numbers being bandied around in Brussels are simply a question of a potential demand which would be raised in the negotiating process, but they are simply that: a negotiating strategy.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I agree with the Chancellor that one of the biggest contributors to the UK’s public finances is the tax revenue that we receive from the financial services sector. Now that we have had the triggering of article 50 and the Government’s White Paper, will he tell us whether he is confident that that revenue will not be significantly reduced, either through the loss of jobs or the loss of any major areas of financial activity?

[Mr Hammond]

Yes; the negotiating strategy and the objectives that we have set out in the article 50 letter would create an environment in which the financial services industry in the UK would be able, by and large, to continue the levels of commercial activity that currently take place with the European Union 27. But of course that will depend on negotiating the right arrangements with the European Union, and it is essential that we go into these discussions in constructive mode, recognising that there are real issues on both sides and that the UK’s financial services industry is an asset not only of the UK but of the whole of the continent of Europe. European businesses depend on those financial services.

[Jonathan Reynolds]

I share the Chancellor’s assessment that there is a mutually beneficial deal for us and the EU to agree on, if this Government have the ability to deliver it. Will he therefore state unequivocally that, as a result of the deal that the Government will seek to negotiate, there will be no significant loss of jobs in any major financial institutions, no removal of any major City-wide functions such as clearing, and no relocation of any EU-wide regulatory agencies such as the European Banking Authority?

[Mr Hammond]

On the hon. Gentleman’s last question, the location of the European Union’s agencies is clearly a matter for the European Union. We cannot credibly seek to leave the European Union and at the same time dictate to it where it should locate its agencies. On the initial items on his list, it will indeed be the UK Government’s objective, as we go into the negotiations, to protect our financial services sector.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 28th February 2017 Commons Chamber

[Mr Hammond]

We are very keen on LEPs working together across regions so that these very large pots of devolved funding, including some of the money in the national productivity investment fund that I announced in the autumn statement, can be used to maximum effect across a coherent economic geography. I am not so sure that it is within my power to bring them together, but I would certainly encourage them to work together.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Yorkshire is of course home to some of the country’s finest financial institutions, such as the Yorkshire Bank and the Yorkshire Building Society—

[Jonathan Reynolds]

Like all financial institutions in the UK, they will be desperately keen to understand what the Government’s Brexit plans will mean for financial services. The Treasury still has not replied to my letter in January asking for some basic clarity, but we need to know how the Government intend to achieve equivalence, how it will be made certain and how we will avoid becoming just a rule taker from the rest of the EU. Chancellor, these are reasonable questions, so may we start to have some answers, please?

[Mr Hammond]

They are perfectly reasonable questions. I am not sure that the Skipton Building Society is holding its breath on how equivalence will work to allow it to carry on marketing complex financial instruments across the European Union. These are matters for negotiation. If we end up with an equivalence regime to allow financial services businesses to continue to trade into the European Union, it will be important that that equivalence regime is based on objective criteria, not political criteria, so that as long as our regulatory regimes are in fact equivalent, we can be confident of continuing to be able to trade.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 25th October 2016 Commons Chamber

[Mr Hammond]

I know that the SNP does not like a good news story, and I am sure that the hon. Gentleman will have been able, by 23 November, to think up a suitable response just in case there is such a story on that day.

On the wider issue of managing Britain’s exit from the European Union, the Prime Minister has been very clear. We understand the instructions that we have received from the British people, and within our obligation to deliver those we will seek to get the very best deal we can with the European Union that maximises the amount of trade in goods and services between our companies and the markets of the European Union, and between European companies and the UK market.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Financial services are one of the sectors most exposed to Brexit, but it is not just jobs in Canary Wharf and the square mile that are at risk; it is jobs throughout the UK, in Manchester, Leeds, Birmingham, Edinburgh and beyond. The messages that the Government have sent so far have been incoherent and counterproductive. Firms need assurance that they will get comparable access to the single market and the ability to retain EU nationals who work for them. Will the Chancellor help finally to put an end to his Government’s chaos today and make a promise to deliver both?

[Mr Hammond]

The hon. Gentleman is right to identify financial services as one of the areas that is particularly concerned about the way in which the exit from the European Union is managed, because the industry is particularly dependent on the passporting regime that is in place. He is also right to draw attention to the often overlooked fact that 75% of financial services jobs are outside London. This is an important UK-wide industry.

On the specific points that the hon. Gentleman makes, I have certainly sought to reassure financial services businesses that we will put their needs at the heart of our negotiation with the European Union. We understand their need for market access. We also understand their need to be able to engage the right skilled people. I have said on the record—I am happy to say this again today—that I do not believe that the concerns the British people have expressed about migration from the European Union relate to those with high skills and high pay. The problem that people are concerned about relates to those taking entry level jobs. I see no likelihood of our using powers to control migration into the UK to prevent companies from bringing highly skilled, highly paid workers here.

Foreign and Commonwealth Office

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Monday 3rd November 2014 Ministerial Corrections

[Jonathan Reynolds]

What is the Foreign Secretary’s considered assessment of the relationship between the dependence of some of our European partners on Russian energy supplies, and the effectiveness and robustness of the sanctions that we have pursued against Russia?

[Mr Hammond]

The sanctions are robust. I think that the important relationship is between the dependence on Russian energy supplies and the robustness of the position of some of our partners on the question of maintaining those sanctions. Fortunately, the sanctions that are in place will last until March or May, depending on the type of sanction involved, before any opportunity arises to debate their renewal or otherwise. That means that, at the very least, we shall get through the winter with the sanctions in place.

[Official Report, 28 October 2014, Vol. 587, c. 164.]

Letter of correction from Mr Philip Hammond:

An error has been identified in the response I gave to the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) during questions to the Secretary of State for Foreign and Commonwealth Affairs.

The correct response should have been:

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 28th October 2014 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

8. What assessment he has made of the effectiveness of EU sanctions against Russia in encouraging a change of approach by that country towards eastern Ukraine.

[The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)]

EU sanctions are having a clear impact on Russia’s economy. Capital flight has increased, and Russian access to western financial markets is severely constrained. Sanctions are estimated to have slowed GDP growth by 1%, and to have contributed to the rouble’s falling by 20% against the dollar since 1 January. The fall in the oil price is piling further pressure on the Russian economy.

[Jonathan Reynolds]

What is the Foreign Secretary’s considered assessment of the relationship between the dependence of some of our European partners on Russian energy supplies, and the effectiveness and robustness of the sanctions that we have pursued against Russia?

[Mr Hammond]

The sanctions are robust. I think that the important relationship is between the dependence on Russian energy supplies and the robustness of the position of some of our partners on the question of maintaining those sanctions. Fortunately, the sanctions that are in place will last until March or May, depending on the type of sanction involved, before any opportunity arises to debate their renewal or otherwise. That means that, at the very least, we shall get through the winter with the sanctions in place.[Official Report, 3 November 2014, Vol. 587, c. 6MC.]

IT Systems (Army Recruitment)

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Tuesday 14th January 2014 Commons Chamber

[Mr Hammond]

Outsourcing services is here to stay. At the cost that regular Army soldiers represent to us, we cannot contemplate using them to perform administrative tasks in the recruitment process in future. Those tasks must be outsourced to be sustainable. We are confident that Capita has a solution. At the outset of the contract, we chose not to adopt the Capita solution, but to go with extant departmental policy, which was to use the existing Atlas platform. We have now reversed that decision for the Army recruiting programme.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Based on the figures the Secretary of State has given today, the original decision to try to integrate the Atlas platform seems strange. When that decision was taken, was there no contingency plan? Given the history of trouble with Government IT projects and the importance of the project, what consideration was given to a contingency plan when the decision was taken?

[Mr Hammond]

The contingency plan was put in place and the fact that there was a risk was clearly recognised at the time. The contracts with both Capita and Atlas were written to allow for a reversion to a Capita-hosted solution if the Department decided that that was necessary. That is what we have done.

Afghanistan

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Wednesday 19th December 2012 Commons Chamber

[Mr Hammond]

I think my hon. Friend might be confusing two things. There are, rather unhelpfully, two separate 4 billions here. There is £4 billion of development aid that was pledged at Tokyo, and there is $4 billion a year of support for the ANSF, of which the United Kingdom has committed about $100 million—around £70 million. We are confident that these sums will be found and that they will be available to the Afghans on an ongoing basis. We have set out our commitment and we do not intend to change from that position.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Like many hon. Members in the Chamber, I represent several families who have lost their loved ones in Afghanistan over the past decade. That felt like a very optimistic statement from the Secretary of State on the progress we have made. I am a little more sceptical about what it has cost us in human life and treasure for the progress we have made. We would all agree that a political solution is necessary to resolve the conflict, but what assurances can the Secretary of State give us that when we reach that political solution with our draw-down forces, we will be able to maintain the safety of all those Afghans who have been our allies over the past decade, and we will not leave them to the mercy of the elements of the Taliban that we wish to draw into the future government of Afghanistan?

[Mr Hammond]

I do not know whether the hon. Gentleman has visited Afghanistan, but many of his colleagues have. It is not a perfect democracy and it never will be. It will not be the case that the Afghan Government will control every inch of their territory after 2014. There will be messy compromises in some parts of the country. Some will not be under the control of the central Government, and some of the behaviours will not be behaviours of the type that we would put up with here or in any European country, but any of the hon. Gentleman’s colleagues who have been there will tell him that the lives of ordinary Afghans are immeasurably better today than they were five or six years ago, and that is the standard by which we should measure our involvement.

Army 2020

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Thursday 5th July 2012 Commons Chamber

[Mr Hammond]

My hon. Friend is absolutely right to warn me not to take advice from the party opposite, and I shall heed his recommendation. It is indeed the case that the public duties incremental company will also have other military duties. It will also be a rotating company; its strength will be found from the other four battalions in the regiment, so nobody will spend their entire military career in the public duties incremental company.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

In regard to the infantry battalions that have been axed, will the Minister explain what he meant when he said that the demographics of those recruitment areas had been looked at? Is he seriously suggesting that the birth rate in our areas cannot sustain our battalions?

[Mr Hammond]

In some cases, yes. The cohort from which the infantry recruits—typically they are men aged between 18 and 24—is set to decline across the UK as a whole by 12% over the next decade. There are specific issues in some specific regional geographies, and there is also a projected change in the composition of that population cohort, including a relative increase in groups in which the Army is not very successful at recruiting at the moment. There are therefore some very big challenges ahead.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Jonathan Reynolds

Thursday 2nd December 2010 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

16. What steps his Department is taking to reduce overcrowding on trains.

[The Secretary of State for Transport (Mr Philip Hammond)]

An additional 650 carriages will be delivered to the rail network between 6 May 2010 and March 2014. In addition, about 600 new carriages for the Crossrail project and up to 1,200 new carriages for the Thameslink programme will be delivered between 2015 and 2019, releasing large amounts of rolling stock for redeployment on other lines to increase capacity.

[Jonathan Reynolds]

I thank the Secretary of State for that answer. The growth in the northern economy over the past 10 to 15 years has heralded a significant rise in rail travel. Passenger growth in my region is set to rise further still, and that is particularly the case in constituencies such as mine that lie on or near the edge of major conurbations. In light of that, and following on from his response to the hon. Member for Blackpool North and Cleveleys (Paul Maynard), what assessment has he made of the benefits that the northern hub could bring to the northern economy by relieving overcrowding and putting in place faster and more frequent trains?

[Mr Hammond]

As I said in response to my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), the northern hub is an interesting and potentially valuable project. Network Rail is evaluating the project, but until we have a proper engineering scheme with a cost attached, it is clearly impossible to carry out a robust cost-benefit analysis. Once we are in a position to produce that, we will be able to examine the scheme properly for prioritisation in the control period 5 investment programme.