Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 6th November 2018 Commons Chamber

[Mr Philip Hammond]

Yes. The Treasury regularly receives independent assessments that tell us that taxes cost us more than they deliver to us, and I can assure my hon. Friend that the Treasury always does its own modelling to reach its decisions.

[Stewart Hosie (Dundee East) (SNP)]

The Chancellor is aware of the sad news about the Michelin plant in my constituency; its potential closure in 2020 would mean the loss of 850 jobs. It is early days, but may I ask the Chancellor for a straightforward commitment to work constructively with the Scottish Government and others—who are meeting representatives of the business today—to do whatever he can to preserve quality manufacturing on the site, and to protect and preserve as many jobs as possible?

[Mr Hammond]

I am grateful to the hon. Gentleman. Of course we will work constructively with the Scottish Government to ensure that we can mitigate in every way possible the impact on the community of these very large numbers of job losses.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 18th April 2017 Commons Chamber

[Mr Hammond]

I cannot speculate on how fast the pigeons are in the hon. Gentleman’s constituency, but I can tell him that all consumers now have a right to 10 megabits broadband. By the end of this year, 95% of properties will have access to 24 megabits broadband. The Government are investing more money to reach the last 5%, the hard-to-reach that are often in rural areas.

[Stewart Hosie (Dundee East) (SNP)]

In Scotland, the original plan was as for the UK: 95% coverage by this year, additional funding for rural areas, money for wi-fi in public buildings and a superfast broadband target of 100% property coverage by 2021. Given that this should be a common endeavour, will the Chancellor welcome the steps taken in Scotland to deliver on those performance targets?

[Mr Hammond]

We have a UK-wide target. We of course welcome any other actions taken on top of that to achieve yet higher levels of broadband penetration. That is a very positive move for the economies of the regions and nations they affect.

[Stewart Hosie]

I thank the Chancellor for that. However, the issue is not simply about the provision of infrastructure, but paying for digital usage. Will he give a guarantee to the House that when the UK Government enter the Brexit negotiations there will be no return to the super-expensive roaming digital phone charges for UK citizens working and living in the EU, and for EU citizens living and working in the UK?

[Mr Hammond]

I hear the hon. Gentleman’s concern and I am absolutely sure that the vast majority of our constituents would agree with his suggestion that we seek to maintain cost-effective access for UK phone users whenever they are roaming within the EU. I think that will be an issue for this Parliament post-Brexit unless we choose, in the course of the exit negotiations, to reach a reciprocal agreement with the European Union.

Class 4 National Insurance Contributions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Wednesday 15th March 2017 Commons Chamber

[Mr Hammond]

In the Budget speech last week, I made it very clear that we were seeking to close the gap a little. We were not seeking to equalise the contributions treatment of the employed and self-employed, as there are very good reasons why there may well need to be a gap. That is why we will look at this in the round—contributions, entitlements and the way the whole package works for the self-employed. Let us come back to this once we have completed the review, have the Matthew Taylor work and can look at the problem in the round.

[Stewart Hosie (Dundee East) (SNP)]

I said last week that this decision would come back to haunt the Chancellor, and it has, but little did I expect that when it did, No. 10 and No. 11 would be briefing against each other. It is almost as if the halcyon days of Gordon Brown and Tony Blair never really went away. However, I welcome the U-turn today, not least because about 140,000 Scottish self-employed people would have been affected by the proposal, and many of them would have earned slightly below, on or only slightly more than the average wage. I am delighted that the Scottish National party went in to bat for the squeezed middle against this Chancellor.

Today’s U-turn has all the characteristics of the pasty tax, the caravan tax and the omnishambles Budget. The Chancellor said that he would fill the gap in the autumn, and I will listen carefully to what he says then, but will he give us an assurance today that he will not simply find another clever way of dipping into the pockets of modestly paid self-employed people? More importantly, if he changes the tax or national insurance regime for self-employed people in the future, will he have proper consultation in advance with their representatives, so that they are not hit with the uncertainty that they have faced over the past week?

[Mr Hammond]

On the last point, we will, of course, consult people widely over the course of the summer as we carry out the review. The hon. Gentleman will know that it is intrinsic in the Budget process that it is difficult to have any kind of proper consultation when preparing a Budget. He asked about measures in the autumn Budget. I said that all spending measures in the spring Budget would be fully funded by revenue raises or reductions in spending elsewhere in that Budget, so that it was broadly fiscally neutral. As a result of the decision I have announced today, the spring Budget is no longer broadly fiscally neutral, but I am committed to addressing that issue in the autumn. The intention remains to balance the measures that we are delivering between spending and taxation.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 28th February 2017 Commons Chamber

[Mr Hammond]

I do not think that that is the right way to proceed. The business rates revaluation reflects the underlying value of premises, and I am afraid it is an inconvenient fact that some large organisations have premises in low-value areas and some small organisations have premises in very high-value areas.

[Stewart Hosie (Dundee East) (SNP)]

The Chancellor was right to talk about access to finance, but most small businesses depend on lending from safe high street banks. What discussions has he had with the banks to ensure that they remain safe and continue to fund small businesses so that they can benefit from the other fiscal measures?

[Mr Hammond]

Different high street banks have different models, but it is certain that some high street banks are aggressively pursuing small and medium-sized enterprises. When I say “aggressively pursuing”, I mean actively seeking their business. However, it is also important for us to diversify the range of financing options that are available to small and medium-sized enterprises, which is one of the reasons why we have pushed money, through the British Business Bank, towards other intermediaries that can provide equity and debt finance for SMEs.

[Stewart Hosie]

The other part of my question was about the banks staying safe, which is vital to small businesses and the whole economy. The Chancellor will have observed the worrying signals from the United States that the new President intends to roll back some of the regulation that was introduced to make banks safer. Will the Chancellor assure us that he does not intend to play follow my leader and deregulate the banks unnecessarily in this country?

[Mr Hammond]

Our banking system in the United Kingdom ensures that our banks are safe, and is tackling the “too big to fail” culture. We have a high level of confidence in our banking system. The reserve ratios of our banks are improving consistently, and we do not want to do anything that would undermine them.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 17th January 2017 Commons Chamber

[Mr Hammond]

The remedy to the problem my hon. Friend sets out will lie in the hands of this Parliament once we repatriate the acquis in the great repeal Bill.

[Stewart Hosie (Dundee East) (SNP)]

In the seven years to 2014, Scotland’s trade with the EU rose by 20%, twice the rate of growth in trade to the rest of the UK and vital for a resilient economy. Today’s hard Tory Brexit puts that at risk, but is this not also a kick in the teeth to many of those who voted leave believing that a European economic area/European Free Trade Association-type arrangement would be put in place to mitigate the damage done?

[Mr Hammond]

I reject the hon. Gentleman’s analysis. We are engaging constructively with the real world and recognising the political red lines of our European Union partners. If we do not recognise them, frankly, we are banging our heads against a brick wall. They have to recognise our political red lines, we have to recognise theirs, and then we need to work together to find a pragmatic solution that works for all the people of the UK within those red lines, and that is what we are doing.

[Stewart Hosie]

As we are looking for a pragmatic solution, Scotland’s trade with the rest of the world over the same timeframe grew by 50%, driven by EU trade agreements. Given that it takes an average of 28 months to conclude a single agreement, how many pragmatic decades does the Chancellor believe it will take to put in place the trade agreements that we need to mitigate the damage of a hard Tory Brexit?

[Mr Hammond]

I am disappointed to hear the hon. Gentleman resorting to the soundbite; he is normally better than that. The discussions I have had with third countries that have free trade agreements with the European Union suggest that there is a strong appetite for a quick and simple agreement with the UK so that, as we leave the European Union, we can immediately enter into a successor agreement with those countries—Korea, for example—that will allow us to continue trading with them on the same terms.

Autumn Statement

Debate between Lord Hammond of Runnymede and Stewart Hosie

Wednesday 23rd November 2016 Commons Chamber

[Mr Hammond]

I am grateful to my right hon. and learned Friend. I am delighted that we have been able to lower the taper rate of universal credit, because of course it is absolutely in line with our principle that we should be supporting and encouraging people into work. He says the taper rate discourages people, but it is of course a much lower rate of withdrawal than under the old tax credit system it replaces.

Let me reassure my right hon. and learned Friend that I and my right hon. Friend the Prime Minister remain absolutely committed to the sound Tory principle that a country has to live within its means. Of course we have to deal with the realities the world throws at us, and that is why today I have adopted, as an interim measure for the remainder of this Parliament, a cyclically adjusted target which will always allow us to respond to any downturn that occurs. However, I certainly understand the importance of economic reality, and I also understand, as does my right hon. Friend the Prime Minister, the extreme desirability of achieving the very best access to markets in Europe for those who produce our goods and services.

[Stewart Hosie (Dundee East) (SNP)]

First, may I associate myself with the words of the shadow Chancellor and the Chancellor on the late Jo Cox? May I also thank the Chancellor for what he said about the Tay cities deal? I note that what he said was slightly different from the words in the Red Book, so we will take him at face value from the Dispatch Box. In his attempt to clamp down on evasion, it was disappointing that no reference was made to Scottish limited partnerships. One would have thought that there would be more, too, in terms of fairness overall, and a reference to the Women Against State Pension Inequality campaign and the unfairness for those women.

The Chancellor gave us plenty of information today, but with no more than a glib reference to being match fit at the beginning and a bit of deflection there was very little on the elephant in the room, which is Brexit. It is not as if the Treasury does not know what the consequences of it will be; its own assessment tells us that tax yields could be down by £66 billion a year after 15 years and GDP down perhaps by 9.5% —a figure confirmed by the London School of Economics—as a result of reduced trade lowering productivity. That amounts to some £6,500 per year per household. So where was the plan to ensure that there is no hard Brexit and to maintain access to the single market? Where was the plan to mitigate the losses in tax yield and GDP? Although the Chancellor said a considerable amount about capital investment and research and development—and I welcome some of it up to a point—where was the fully developed scheme actually to boost productivity?

We do not go into this next period from a position of strength. As the Chancellor knows, UK GDP is already nearly 20% lower than it would have been had we achieved even a 2% trend growth rate since 2008. Our argument is that the austerity of this Government and the previous Government sucked consumption out of the economy, weakening recovery. This Government are set to repeat the error. Growth barely reaches 2% for the forecast period, and although the Chancellor sensibly did not put a date on it, he is still targeting a surplus in the economy, perhaps again before recovery has been secured.

I am glad the Chancellor has changed the fiscal charter, because the previous permanent surplus rule, taking £10 billion a year more out than required to run a balanced economy and cutting £50 billion a year more than required to run a balanced current budget, left us with some terrible consequences. As discretionary consolidation, cuts and tax rises took place, the ratio of cuts to tax rises also increased, placing the burden of austerity and an arbitrary fiscal target on the back of the poor. That has made the poorest decile 5% worse off and the richest 10% almost entirely better off. The Government have clearly worked out something, and I welcome the move on the taper, but let us be clear: at 2p in the pound, on the minimum wage that is 14p an hour.

It is not a king’s ransom and it will not cure poverty. The squeeze has not been lifted from the poor, and the screw of the welfare cap has not been turned off; this has simply made a brutal regime slightly less brutal.

I am glad that the Chancellor mentioned the actions of the Bank of England. Our party very much welcomes what the Governor has done. He has introduced an increase in quantitative easing and £60 billion of extra Government bond purchases, made £10 billion available for corporate bond purchases, set a 0.25% base rate and enabled additional term funding to encourage more and cheaper long-term lending from the banks. However, there has been a more or less complete absence of a fiscal policy stimulus to match the incredible monetary policy activism of the central bank.

The key part of today’s autumn statement—I am pleased to hear that this is the last one; it is my 25th Budget, autumn statement or pre-Budget statement—was the increase in total managed expenditure, but like, for like, it amounts to 1.5% of total managed expenditure over the forecast period from 2015-16 to 2020-21. It is to be welcomed, and it certainly represents a break from the recent past, but it can in no way be described as the sort of fiscal stimulus required to match the monetary policy discipline of the central bank.

The Chancellor talked about an increase in capital investment, which I very much welcome. He also talked about an increase in funding for research and development. However, given the fact that the description of research and development has changed in the Green Book, as has the description of the UK Trade & Investment funding—he said that there would be a doubling of some aspects of export support—it is hard to tell precisely what the impact of some of those measures will be. Will he tell us what the total increase in cash and percentage terms of this vital export support will be? Will he also tell us what the overall increase in research and development funding will be across the piece? How does he intend to deploy the £23 billion of what he described as capital investment?

[Mr Hammond]

I am not sure whether that was a “thank you” or not. I might have to consult my hon. Friends about that. I think it might have been—

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 25th October 2016 Commons Chamber

[Mr Hammond]

Indeed I will. It is an important part of the role of a Chancellor to act as a champion for businesses in the north and the midlands, and to draw the attention of inward investors such as the Chinese and the Indians, who are already heavily invested in the west midlands, to the opportunities that exist in the UK beyond London and the south-east. Such opportunities are not always as obvious to foreign investors as those that exist in London.

[Stewart Hosie (Dundee East) (SNP)]

In order to boost growth outside London and the south-east, there should be a laser-like focus on manufacturing and its associated innovation research and development, but the UK’s record on R and D spending is lamentable compared with that of our international competitors. May I ask the Chancellor how he intends to remedy that? Will he take the opportunity of the autumn statement to reverse the decision to convert innovation funding from grants to loans?

[Mr Hammond]

We have supported £22 billion of R and D spending across the UK through the tax credit system. The hon. Gentleman is right; the UK’s productivity performance is weak compared with that of its principal competitors, and our investment in R and D is significantly less than that of many of our principal competitors. I promise him that we are acutely aware of that challenge, and I will address that challenge in the autumn statement on 23 November.

[Stewart Hosie]

I will take that as a veiled good news story at some point to come. In order to boost growth we need to take exports more seriously, including to the EU, given that our trade balance has gone into reverse over the past two years. To effect that, what efforts is the Chancellor making to rule out a hard Brexit, with visas, tariff barriers and an end to the customs union, all of which the Treasury says could lead to the loss of £66 billion of revenue, a reduction in GDP of around 7.5% and a threat, estimated conservatively, to half a million jobs?

[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.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 19th July 2016 Commons Chamber

[Mr Hammond]

I am very happy to do that. One of the great strengths of the UK economy is our innate entrepreneurialism. We need to foster that, and we need to make sure that it works in all areas, regions and nations of the United Kingdom.

[Stewart Hosie (Dundee East) (SNP)]

May I congratulate the Chancellor and the Chief Secretary to the Treasury on their new roles? The problem we have seen over many years is that fiscal policy occasionally works against the interests of business. Innovation funding has been converted from grants to loans, and there has been a cut during this Parliament to the UK Trade & Investment budget. I ask the Chancellor, who is new and fresh to the job, to look again at those policies, in particular, to make sure that innovation and export support funding is aligned with innovating and exporting businesses.

[Mr Hammond]

I assure the hon. Gentleman that I will be looking comprehensively at all areas of the portfolio as I prepare for the autumn statement, in the context of the economic situation that we face post this shock.

[Stewart Hosie]

I welcome that, and I ask the Chancellor to look again at one other thing. One of the problems that business and the economy face is a lack of demand. May I ask the Chancellor to look again not just at headline corporation tax cuts, but at an intelligent use of allowances—for example, the reintroduction of industrial buildings allowance—to build demand for construction now and long-term supply side capacity to boost what we do, particularly in terms of exporting, in the future?

[Mr Hammond]

I assure the hon. Gentleman that when we look at the corporate tax environment, we will not just be looking at headline rates. We will be looking at the marginal effective rates of corporate tax for investors in the UK, because that is what we want to target—more investment, more jobs and the creation of more wealth in the UK.

Army Basing Plan

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 5th March 2013 Commons Chamber

[Mr Hammond]

I would not want to encourage my hon. Friend to draw that conclusion. Marchwood military port is scheduled for disposal, and—this is not part of this announcement, of course—it may well still be used by the Army but under the ownership of a civilian contractor.

[Stewart Hosie (Dundee East) (SNP)]

The Secretary of State said that the consolidation of the Army bases in Scotland would be around Leuchars and Edinburgh. He also made the welcome announcement that 45 Commando would remain in Arbroath, presumably at RM Condor. He then went on to say that the decisions on the training estate would be announced by the Armed Forces Minister later. May I urge him to ensure that those decisions are taken logically, and gently remind him that the excellent base and range at Barry Buddon in my constituency sits between Leuchars and Condor and ought to remain a very valuable part of the training estate in future?

[Mr Hammond]

I welcome the hon. Gentleman’s contribution to this debate. I have to say it is a delight to be in a Parliament where Members are arguing for military establishments in their constituencies. Many of my colleagues in NATO and EU countries do not enjoy that same level of parliamentary and public support for the armed forces. I am grateful to all Members of the House for that.

Future Reserves 2020

Debate between Lord Hammond of Runnymede and Stewart Hosie

Thursday 8th November 2012 Commons Chamber

[Mr Hammond]

I know that my hon. Friend commands great respect on this issue across the House and I am sure that the right hon. Member for East Renfrewshire will have noted what he has said, reinforcing the point that I have already made. I genuinely hope that we can build consensus on that issue.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Secretary of State for giving me early sight of his statement. I welcome the intention to increase the number of reservists. However, the reserve forces will need to be reconfigured to meet his objective of integrating with the regulars. May I ask him about the Royal Marines Reserve in particular? Will he ensure that the reconfiguration is done sensitively, and that the modern, fully equipped bases around which recruitment is now good are protected wherever possible to ensure the broadest possible geographical spread of the specialist skills? This would help to achieve the Government’s objective of an overall increase in numbers.

[Mr Hammond]

One wonders whether the hon. Gentleman could be referring to any particular base. Yes, he is absolutely right. First of all, we have to fix the lay-down for the regular forces; and then we have to make sure that the location of reservists is appropriate, both from a recruiting and a training point of view. Our intention is that reservist units will be paired with specific regular units, so they will work with them on a routine basis. There are obviously issues of geography that need to be taken into account. We will set out the regular basing plot before the House rises for the Christmas recess—with your permission, Mr Speaker—and I then expect to be able to set out the reserve plot and the pairing pattern when we deliver our response to consultation conclusions and the White Paper in the spring.

Carrier Strike Capability

Debate between Lord Hammond of Runnymede and Stewart Hosie

Thursday 10th May 2012 Commons Chamber

[Mr Hammond]

My right hon. Friend is correct to focus on that point, and I thank him for his comments. As I think I said in my statement, fitting cats and traps retrospectively to the Queen Elizabeth, after her completion, would undoubtedly be significantly more expensive than even the current £2 billion estimate for fitting them to the Prince of Wales in build. It is therefore not unreasonable to think of a likely cost of between £2.5 billion and £3 billion for retrospective fit to the Queen Elizabeth, making that project, as I suggested in my statement, in practice unlikely ever to occur.

[Stewart Hosie (Dundee East) (SNP)]

Can the Secretary of State confirm that the terms of business agreement signed in 2009 provide that on completion of the carrier build, the UK will be spending perhaps only £230 million a year—0.7% of the MOD budget—to maintain essential shipbuilding skills? More important, will he tell us whether, as a result of the additional costs announced in today’s statement, he envisages that very small figure being reduced further in the future?

[Mr Hammond]

The hon. Gentleman is absolutely right: the terms of business agreement with the shipbuilding consortium commits the MOD to underwriting overhead costs of about £230 million a year to maintain skills. The challenge for the MOD is so to manage the shipbuilding programme as to recover as much of that as possible. After the carrier programme is finished in the shipyards covered by the TOBA, we will move on to the Type 26 programme and recover costs in that way. As far as I am aware, there is no mechanism for reducing that £230 million—it is a contractual figure.

Intercity Express and Rail Electrification

Debate between Lord Hammond of Runnymede and Stewart Hosie

Tuesday 1st March 2011 Commons Chamber

[Mr Hammond]

The value-for-money appraisal certainly shows that the revised Agility proposal represents the highest value for money of the proposals that we have considered for the replacement of the inter-city diesel express trains. It represents a strong value-for-money case and is affordable. Hitachi has responded in an exemplary way to the Government’s commitment to high-speed rail—that changes the dynamics—and to the UK’s fiscal situation in order to ensure that we can go ahead with the programme.

[Stewart Hosie (Dundee East) (SNP)]

I welcome both the statement and having had early sight of it. I agree with the Secretary of State that the purchase of the locomotives will represent a multi-billion pound investment that, as he said, will underpin the provision of inter-city services. May I ask him whether the decision is for bi-mode hybrid trains or for a mixed fleet of diesel and electric trains, and whether sufficient numbers will be bought on time to guarantee the continuity and frequency of direct services from London on the east coast main line north of Edinburgh, through Fife, Dundee, Angus and Aberdeen?

[Mr Hammond]

It is not about diesels. There will be no diesel traction locomotives in the mix; there will be bi-mode electric-diesel trains and all-electric trains. The services to Aberdeen and Inverness will be provided by the bi-mode trains, running straight off the wires at Edinburgh and on to the existing routes, so that service will be protected.