Spring Statement

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Wednesday 13th March 2019 Commons Chamber

[Mr Hammond]

I can confirm to my right hon. and learned Friend that the OBR’s central forecast is based, as before, on an assumption of a deal done with the European Union so that we exit via a transition mechanism and have a future close trading relationship with it. I can assure him—I am sure he needs no reassurance—that I will not be remotely tempted by the policies or the profligacy of the shadow Chancellor. My right hon. and learned Friend is absolutely right that until such time as we are sure that we will not exit via a disorderly no deal, I have to keep that fiscal powder dry, but no one will be happier than me when I can release some of that headroom to support public services, capital investment and lower taxes in this economy.

[Kirsty Blackman (Aberdeen North) (SNP)]

There is no certainty about the future health of the economy. Whatever happens regarding the Prime Minister’s deal—whether this House eventually accepts or continues to resoundingly reject it—we are still not clear about what the UK’s future trading relationship with the EU will look like. What is clear is that Brexit is bad for the economy. So far, the picture is bleak. Key economic indicators show that the UK economy grew by a meagre 0.2% in the fourth quarter of 2018. The OBR previously forecast growth of 1.6% for 2019. Even with the assumption of a smooth Brexit, it has downgraded that to 1.2%. Whatever the Chancellor’s spin, is that not the cost of Brexit?

Of course, the Chancellor predicted that himself. He told Radio 4:

“The economy will be slightly smaller in the Prime Minister’s preferred version of the future partnership.”

We now face the prospect of a no-deal Brexit, which would have a severe impact on the economy, people and businesses across Scotland. It could push the Scottish economy into a deep recession, similar in scale to the financial crash of 2008. The British Retail Consortium estimates that no deal could hike food prices by some 29%. My constituents cannot afford that. Will the Chancellor commit to voting against no deal tonight?

Given such massive uncertainty, we needed a bit more than this damp squib of a statement. It is a laudable aim to have only one Budget a year, but in these circumstances, the Chancellor should have brought forward an emergency Budget, and I call on him to do so.

We need the Chancellor to explain how he will fix the fiscal gap created by discouraging immigration. We know that the average EU citizen who chooses to live and work in our country contributes £34,400 annually to the Scottish economy. How will he plug that gap? Will he exempt those coming for PhD-level roles from the salary cap, as well as from the visa numbers cap? We need the Chancellor to provide funding to small businesses that are not prepared to cope with Brexit. Only 8% of Scottish firms feel fully ready.

We need concrete action to tackle the lack of productivity growth. It was woeful anyway, compared with our European neighbours, but over the past two years business has been so focused on Brexit damage limitation that it has lacked the resources to increase growth and productivity.

This week the New Financial think-tank said:

“Our conservative estimates show that banks and investment banks are moving around £800bn in assets; asset managers have so far transferred more than £65bn in funds; and insurance companies have so far moved £35bn in assets.”

That appears to have entirely passed the Chancellor by.

People who live in these islands have suffered through a decade of austerity. According to the Joseph Rowntree Foundation, the current benefits freeze has made life harder for more than 27 million people across the UK. It is the biggest policy behind rising poverty, costing families an average of £340 a year. If the freeze continues, by 2020 it will have driven 400,000 people into poverty. It must end now.

While the poor get poorer, the rich get richer under this Government. FTSE 100 CEO pay has gone up by 66% while the Tories have been in government, while wages for the rest have failed to reach 2008 levels. The Chancellor has had many opportunities to press his colleagues to halt the roll-out of universal credit. The system is broken and it must be fixed before more misery is inflicted. His emergency Budget should end the benefits freeze and halt the roll-out of universal credit. He has managed to find money for plenty of other things—he has allocated billions of pounds to the Democratic Unionist party to buy its support, but he has failed to allocate the £3.4 billion to Scotland that should have been our share of that largesse. Will the Chancellor ensure that the Barnett formula is properly applied to the new funding he has announced today, unlike his actions regarding the DUP deal?

Scotland’s resource block grant for 2019-20 is almost £2 billion lower in real terms than in 2010-11. That is a direct consequence of the Chancellor’s continued obsession with austerity. He has created the stronger towns fund, pumping money into leave-voting areas as yet another bribe. How well did that work this week? The Chancellor has not yet announced details of the shared prosperity fund. Especially important is whether it will replace the £2.4 billion a year that communities across the UK currently receive as a result of EU structural funds. Will he provide us with full details now? Will he give a cast-iron guarantee that the Scottish Government will be treated as equals and will continue to distribute the funding in Scotland, as has been the case under the EU programmes?

Yesterday, a majority of Scottish MPs put their names to an amendment saying that the best future for Scotland would be as an independent country within the EU. With independence, we will be able to encourage immigration, recognising the benefits brought by those who come to live, love and work in our country. We will be able to reject austerity, supporting our citizens when they need it most. We will be able to increase productivity, improve participation in our workforce and encourage and support companies to grow. We will be able to trade frictionlessly with Europe, a market eight times the size of the UK. Scotland has been badly served by consecutive Westminster Governments. We need to take our lifeboat and get off this sinking Brexit ship.

[Mr Hammond]

I am sure it was a momentary oversight by the hon. Lady that she did not say anything about the decommissioning measures that will be so important to her local industry in Aberdeen and that are listed in the written ministerial statement. She says that no deal will be bad for the economy, and I absolutely agree, but if she understands that, why did she not vote for the deal? I have a great deal of respect for her, but I am afraid she is creeping towards the practices of those on the Labour Front Bench when she quotes the fourth quarter growth figure of 0.2% without mentioning the more recently published growth figure of 0.5% for the first quarter of this year. [Interruption.] If she does the maths, she will find that is okay.

The hon. Lady talked about the downgrade that the OBR has applied to the 2019 growth figure. We would of course like it to be higher, but she has to see the figure in the global context. I know she understands this. Germany’s economy has slowed down and France’s economy has slowed down. Across the G7, we are exactly in the middle of the pack. We will grow faster than Germany, Japan and Italy this year. We will grow exactly the same as France and slower than Canada and the US. That is a perfectly creditable performance. Would I like to do better? Of course I would. If she is going to be honest with the House, she needs to put what she says in the context of what is happening across the global economy.

The hon. Lady asked about PhD-level roles. They will be completely exempt from the visa cap. She asked about assets being moved abroad. Of course I am concerned about that, and £35 billion of insurance company assets moved abroad is £35 billion more than I would like, but she needs to understand that that is in the context of the many trillions of pounds of assets that the companies are managing in London and, increasingly, in Edinburgh. Edinburgh’s ranking in the global asset management league table has once again risen, which we are extremely pleased about.

The hon. Lady talked about pay for the lowest paid. Those on the national minimum wage and the national living wage have seen their incomes increase by an average of £2,750 a year since 2016. She asked about universal credit. Universal credit delivers. People on universal credit are more likely to be in work than those trapped on legacy benefits. I have put billions of pounds into the system over successive fiscal events to smooth the transition to ensure that the movement of people from legacy benefits on to universal credit operates smoothly.

Finally, Scotland gets its share of the increased spending on capital and resource, but precious little thanks do we ever hear from those on the SNP Benches in exchange for it.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Tuesday 17th April 2018 Commons Chamber

[Mr Hammond]

The hon. Lady asks a specific and detailed question about Scottish Limited Partnerships. The legislation is designed to deter the kind of activity to which she refers. The absence of fines should not be taken as an indication of an absence of activity. As she will know, Her Majesty’s Revenue and Customs always seeks, first of all, to deter non-compliant behaviour before it moves into hard compliance. If I may, I will write to her with a more detailed answer on the very specific point about Scottish Limited Partnerships.

[Kirsty Blackman (Aberdeen North) (SNP)]

To follow up on that question about Scottish Limited Partnerships, I am concerned that the Chancellor is not able to stand up and talk about tangible action that he is taking on this matter. This has been a live issue for a very long period of time. Will he commit to taking action on Scottish Limited Partnerships?

[Mr Hammond]

What I can commit to the House is this: wherever HMRC detects non-compliant behaviour, it will act, but it is for HMRC to determine how best to act in individual cases, and it is right that Ministers do not have direct involvement in HMRC pursuing individual cases. I will write to the Opposition spokesman, the hon. Member for Oxford East (Anneliese Dodds), and I am sure that the hon. Member for Aberdeen North (Kirsty Blackman) will be interested in that reply.

[Kirsty Blackman]

There were 2,800 Scottish Limited Partnerships registered last year, only 1,100 of which have registered persons of significant control That is a very low percentage. Of that 1,100, 172 are registered as belonging to Russian individuals. Given all that is happening just now, it is vital that the Chancellor takes urgent action on this—not just a letter at some point in the future. This needs to happen as soon as possible.

[Mr Hammond]

I will ensure that the hon. Lady gets the letter as soon as possible. It is right to focus on groups that are using structures for non-compliance or purposes that we would wish to deter, and HMRC will always do so. I will update her by letter, hopefully later today.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Tuesday 27th February 2018 Commons Chamber

[Mr Hammond]

The Government intend to maintain the greatest possible access for British businesses to European Union markets. The hon. Lady is right that we should approach this on the basis of evidence. We should look for evidence of the value of our trade flows with Europe and what jobs they generate in the UK, and we should look objectively at the opportunities that arise with third-country trade deals and with the likely profile of the new jobs, trade and opportunities that can be created, and then weigh those carefully.

[Kirsty Blackman (Aberdeen North) (SNP)]

Leaks from the Brexit analysis show that UK Government borrowing will rise dramatically under Brexit, with figures ranging from £45 billion to £120 billion in a worst-case scenario. Can the Chancellor reassure us that he will not cut vital public services to plug this gap?

[Mr Hammond]

As the hon. Lady knows, the analysis to which she refers is based on standardised, off-the-shelf trade models. The Government are seeking a bespoke deal with the European Union to deliver a deep economic partnership, which would have a completely different set of outcomes. That remains our objective.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Tuesday 24th October 2017 Commons Chamber

[Mr Hammond]

I strongly agree with my hon. Friend that the fragmentation of the UK internal market would be damaging for the Scottish economy, particularly small businesses. This is not just an issue for Scotland, though. We all agree that protecting the UK internal market is in our shared interests, and the Government will work to make sure that there are no new barriers to doing business across the UK.

[Kirsty Blackman (Aberdeen North) (SNP)]

Staying in the UK internal market while the UK crashes out of the EU is set to cost Scotland £30 billion over five years, according to research by the London School of Economics published today. Aberdeen is set to lose the most, at 7% of gross value added. Will the Chancellor be clear on behalf of his Government that no deal is not an option?

[Mr Hammond]

As I have already said, the Government are preparing for all possible outcomes of the negotiations with the European Union, as any prudent Government would, but the Prime Minister has made it very clear that our strong preference is to achieve a deal, which is good for Britain and which protects British jobs, British businesses and British prosperity—by which I mean the jobs, businesses and prosperity of all of the United Kingdom.

[Kirsty Blackman]

On that note, 56% of EU nationals in FTSE 250 companies are highly likely, or quite likely, to leave the UK before the conclusion of the Brexit negotiations. What is the Chancellor’s assessment of the impact on the Scottish economy of all of this talent leaving the UK?

[Mr Hammond]

I am very confident that, whatever the outcome, all of this talent will not leave. The Prime Minister made it very clear yesterday that her top priority remains giving assurance to EU citizens living in the UK, which is why she is working hard to deliver a deal on citizens. It is the area in which our discussions with the European Union are most advanced. The hon. Lady has the Prime Minister’s personal commitment on the importance that she attaches to that area.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Tuesday 18th July 2017 Commons Chamber

[Mr Philip Hammond]

No, I do not accept that. However, I readily agree with the hon. Gentleman that, as I have said many times in the Chamber, the process of negotiating our exit from the European Union and then executing that exit is bound to create uncertainty, and uncertainty is always unwelcomed by business. The challenge for us is to secure as much certainty as possible as early as possible for business, and that is our focus.

[Kirsty Blackman (Aberdeen North) (SNP)]

On a point of order, Mr Speaker.

Economy and Jobs

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Thursday 29th June 2017 Commons Chamber

[Mr Hammond]

The hon. Gentleman is wrong. Last year, the British economy was the second-fastest growing in the G7 after Germany. In the year before that, our economy was the second-fasting growing after the United States.

[Kirsty Blackman (Aberdeen North) (SNP)]

And this year it is at the bottom.

[Mr Hammond]

Well, we are only one quarter into this year. I do not want to get techy, but the first quarter data are always subject to the largest revision, so let us wait and see. The OBR maintains its forecast for economic growth of 2% this year.

--- Later in debate ---

[Kirsty Blackman]

The national living wage that has been put in place by the Conservatives does not provide enough to live on. It does not matter how generous it is compared with other places; what matters is whether people can live on it.

[Mr Philip Hammond]

The hon. Lady says that she wants to see a targeted increase in spending. Can she confirm that the Scottish Government will use their powers under the Scotland Act 1998 to raise taxes in Scotland to increase spending in Scotland?

[Kirsty Blackman]

We have already done so.

In this time of mass instability, we need the UK Government to support a monetary policy that encourages investment in places that will create direct growth, and quantitative easing has not achieved that since the first wave was put in place. That matter needs to be considered as a matter of urgency.

We need a UK Government who will fight for single market membership to ensure that all companies in the UK have the potential to grow, export and create skilled jobs.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Tuesday 28th February 2017 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

Oil and gas received only a passing mention in the industrial strategy and was classed as a low priority for the Brexit negotiations. Will the Chancellor commit to actually doing something to support the future of the oil and gas industry in next week’s Budget?

[Mr Philip Hammond]

The hon. Lady will have to wait and see, but I am well aware of the concerns that the industry is expressing. My hon. Friend the Financial Secretary met industry representatives last week and we understand their principal asks.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Tuesday 17th January 2017 Commons Chamber

[Mr Hammond]

My right hon. Friend has a point in one sense, in that economic forecasters admit that even with a five-year forecast, there will be a high degree of uncertainty about accuracy. On a 50-year forecast, there will be a very high degree of uncertainty indeed, but we will see how the debate goes on the fiscal sustainability report that is published today. I suspect that it will act as a very useful catalyst for discussing some of the really important strategic issues that we face as a nation, not in the white heat of immediate political debate, but over a much longer term—over a 50-year period—so that we can think about where we go in the balance between public spending and taxation, and how we support our vital public services.

[Kirsty Blackman (Aberdeen North) (SNP)]

24. The financial services industry employs 40,000 people in Edinburgh alone. Given the Chancellor’s comments on the single market, what impact does he think leaving it will have on jobs in Scotland?

[Mr Hammond]

My assessment is that by setting out our agenda and by setting out clear objectives, as the Prime Minister is right now, we are meeting the first ask of our European partners, which is to be clear about what we want. We are recognising the political red lines they have set out and saying that we will respect them. That is the first step towards sensible engagement with our European Union partners to reach an outcome that is positive for the UK and for the European Union. That of course must include freedom for financial services firms to continue doing their business.

Autumn Statement

Debate between Lord Hammond of Runnymede and Kirsty Blackman

Wednesday 23rd November 2016 Commons Chamber

[Mr Hammond]

The Department for Work and Pensions has some excellent programmes and my right hon. Friend the Secretary of State for Work and Pensions confirms to me that he has adequate funding for all those programmes.

[Kirsty Blackman (Aberdeen North) (SNP)]

The oil and gas industry has a bright future. When will the Chancellor implement the tangible changes that his predecessor committed to on both decommissioning tax relief and loan guarantees? The industry needs those measures to secure current investment and so secure increased future productivity.

[Mr Hammond]

Yes; I have confirmed again today that we will proceed with those measures. We will proceed with them as quickly as we possibly can.