VAT Retail Export Scheme
(Paisley and Renfrewshire North) (SNP)
What discussions he has had with representatives of the (a)
retail and (b) aviation industries on the VAT retail export
scheme and airside extra statutory concessions.
The Exchequer Secretary to the Treasury ()
During the consultation on duty free and tax-free goods carried
by passengers in 2020, the Government engaged extensively with
various stakeholders and carefully considered 73 consultation
responses. I have continued to meet stakeholders, including
retail and aviation representatives, following our announcement.
[V]
Given the deep trouble within retail and aviation, with Debenhams
one of many chains disappearing from high streets with the loss
of tens of thousands of jobs and, as the Minister will be aware
with Stansted and its importance for employment in her
constituency, aviation by and large grounded, does she not accept
it was a mistake to scrap the VAT retail export scheme and the
extra-statutory concessions, both of which brought much needed
revenue to the retail sector at airports, which is now lost from
the economy, possibly for good?
We do not accept that. The independent Office for Budget
Responsibility set out its assessment of the fiscal impact of the
withdrawal of the VAT RES scheme, factoring in a higher than
usual elasticity to account for spending on luxury goods. Its
estimate is that this will result in a significant Exchequer
saving of about £400 million per year. On airports, we recognise
the challenges the aviation sector is facing as it recovers from
the impacts of covid-19. We have supported the sector throughout
the pandemic and continue to do so. This includes the recently
announced airport and ground operator support scheme, which will
provide eligible firms with support of up to £8 million per
claimant.
Financial Support Schemes: Equitable Access
(York Central) (Lab/Co-op)
If he will ensure that people who are unable to participate in
work as a result of (a) home schooling and (b) following other
Government covid-19 guidance have equitable access to financial
support schemes.
The Financial Secretary to the Treasury ()
Since their introduction, the coronavirus job retention scheme
and the self-employment income support scheme have been available
to those unable to go to work because of caring responsibilities
arising from covid-19, such as caring for a home schooling child
or caring for a vulnerable individual. Those who are unable to
work from home and have been told to shield have also been
eligible for these support schemes, as well as for statutory sick
pay and employment and support allowance.
[V]
The Chancellor has let the financial burden of covid-19 fall on
women. They have undertaken twice as much home schooling as men.
One in five have had to cut their hours. Some 78% of working
mothers have not been offered furlough and 71% of those who asked
for it have been refused. Will the Chancellor recognise that once
again women have disproportionately paid the price of the
inequality in his policies? Will he undertake an immediate
equality impact assessment and set out in his Budget how he will
offer redress for these widening gendered inequalities?
The truth is that this pandemic has had a desperately difficult
effect for the whole of the UK economy, and for families and
people across our country and regions. It is appropriate to
recognise the totality of the difficulty we find ourselves in. It
is true that many women have found themselves in the position of
either caring for home schooling or vulnerable individuals. They
are supported and protected through the schemes we have put in
place. Of course, over and above those schemes, we have also put
in place significant amounts of support for remote education,
laptops and councils to help vulnerable individuals.
(Ealing North) (Lab/Co-op) [V]
Earlier this month, the shadow Chancellor successfully called on
the Chancellor to make it clear that working parents and others
can be furloughed owing to childcare responsibilities. Most
employers will want to do the right thing, but where an employer
is refusing to follow the guidance and offer a parent furlough
for childcare reasons, can the Minister tell me who the parent
should report that to and what action will be taken?
As the hon. Member will know, furlough is an arrangement reached
between companies and their employees. Her Majesty’s Revenue and
Customs and the Government do not have direct involvement in
that. What they say is that where an agreement can be reached
between the two sides we will support them, as laid out in one of
the most generous schemes available in any country around the
world. As I said, that is just one part of a much wider panoply
of support for people at risk through the pandemic.
Wholesale Food Service Sector
(Swansea East) (Lab)
What assessment he has made of the potential merits of providing
financial support to wholesale food service sector businesses
affected by covid-19 restrictions.
The Economic Secretary to the Treasury ()
Throughout the covid crisis, the Government have sought to
protect people’s jobs and livelihoods, and support businesses and
public services across the UK. We recognise that food and drink
wholesalers have been severely impacted by the necessary action
we have taken to control the virus, but those businesses have
been eligible for a number of our economic support schemes,
including the job retention scheme, VAT deferral and bounce back
loans.
[V]
Food service wholesalers have again seen their trade drop by 95%
with hospitality businesses closing, yet they continue to supply
our hospitals, schools, care homes and prisons at a financial
loss. Many now are on the brink of collapse. What more are the
Government going to do to help the industry, which is suffering a
double whammy of lost stock and ongoing fixed costs?
I thank the hon. Lady for her question, and, indeed, I met
representatives of the sector in my constituency a few weeks ago.
The Treasury is in regular discussion with the Department for
Environment, Food and Rural Affairs and they are assessing the
systemic risks to the food supply chain of the fulfilment of
those public sector contracts to schools, hospitals and prisons.
We keep these matters under close review, but at the moment there
is no threat to those supply chains and, as I referenced, the
options that are available to those firms continue to be
available.
Disused Coal Tips: Safety
(Rhondda) (Lab)
What discussions he has had with (a) Cabinet colleagues and (b)
the Coal Authority on funding for ensuring the safety and
stability of disused coal tips.
The Chief Secretary to the Treasury ()
Treasury Ministers regularly speak to their ministerial
colleagues on all matters of public spending. Remediation of coal
sites is a devolved policy and responsibility lies with the
devolved Administration through their Barnett funding.
[V]
Well, that was a depressing start, because the truth is that 40%
of all the disused coal tips in the whole United Kingdom are in
Wales, which is much higher than the Barnett formula would
normally allow for. Ninety per cent. of all the disused coal tips
in England and Wales are in the poorest communities, so if the
Government really stick to this policy of “It’s down to the local
authority, which has to find the funding for this”, they are
going to see the poorest communities in Britain pay for the
legacy of an industry that made this country rich. I urge the
Minister, please, to think again about how we can make sure that
communities are safe and that the money and the funding are there
to make sure that the coal slides, which are likely to come more
frequently, do not provide long-term financial and economic
problems for those communities.
I am a little surprised by the hon. Gentleman’s response because
the last time that he raised this issue at Treasury questions,
the UK Government responded extremely constructively, with £31
million of financial support, including £22 million to address
the flooding of coal sites and £9 million for coal tip repairs,
which I thought he might at least have welcomed. Notwithstanding
that, at the request of the Welsh Government, the Coal Authority
is supporting work to undertake a safety review of all the small
tips in Wales, regardless of ownership, but he should also
recognise that it is a devolved matter.
Sport and Wellbeing: Covid-19 Recovery Strategy
(Chatham and Aylesford) (Con)
What plans he has to prioritise funding for sport and wellbeing
as part of a covid-19 recovery strategy.
The Chief Secretary to the Treasury ()
Sport and wellbeing is of major importance to this Government as
we manage the effects of the pandemic. That is why we announced
the £300 million sport winter survival package to protect major
spectator sports, why we have supported clubs through covid
business support schemes, such as the furlough scheme, and why we
have introduced the £100 million national leisure recovery fund
to support publicly owned leisure facilities through this crisis.
[V]
The Chief Secretary shares my passion and enthusiasm for sport,
and I know that he appreciates the consequences of good physical
and mental health on the wellbeing of individuals, but he may
also be aware that poor physical health and wellbeing cost the
Treasury tens of billions of pounds per annum. Given that
covid-19 has had a negative impact on both, does he agree that
our recovery strategy should put sport, physical activity and
wellbeing at its heart, and will he consider the merits of a
wellbeing budget that looks at shifting the focus away from GDP
as the only measure of economic growth?
I agree with my hon. Friend that sport and wellbeing should be at
the heart of our recovery plans and pay tribute to the work that
she has done not just on football but on sport and loneliness in
championing these issues. There are lessons from other countries
that we can look at as well. One of the areas that I am very keen
to work with her on are the opportunities around social
prescribing, where the role of sport and wellbeing—in terms of
how we treat people with regard to mental health and recovery
from covid—has a lot to offer, and I know that she will continue
to champion that.
Living Standards in Scotland: UK Fiscal Policy
(Cumbernauld, Kilsyth and Kirkintilloch East)
(SNP)
What discussions he has had with his Scottish Government
counterpart on the effect of UK fiscal policy on living standards
in Scotland.
(Glasgow East) (SNP)
What discussions he has had with his Scottish Government
counterpart on the effect of UK fiscal policy on living standards
in Scotland.
The Chief Secretary to the Treasury ()
I have frequent discussions with the Scottish Government’s
Finance Minister, and may I take this opportunity to add my
congratulations on the announcement yesterday of her engagement?
[V]
I think every Member will join me in congratulating Scotland’s
Finance Minister, , on her happy news. A decade of UK austerity delivered
unprecedented declines in living standards and incomes,
especially to those already struggling. Now even the OECD says
that making cuts instead of investment after the financial crisis
was the wrong approach. With the Scottish Budget set for
Thursday, will the Minister confirm that this time the UK
Government will invest to stimulate economic recovery, or will
more Tory cuts put Scotland’s recovery at risk?
It is a little odd, in a year when Scotland has received £44
billion through the Barnett formula, to be talking of cuts. The
hon. Gentleman refers to the Scottish Budget, and he will be
aware that there are opportunities with the powers that the
Scottish Government have, whether that is to exercise their
flexibilities on elements of universal credit, to top up benefits
and create new ones, or to introduce new tax powers. The Scottish
Parliament has powers, and we wait to see how the Scottish
Government use them.
In asking the public to stay at home, protect the NHS and save
lives, there must be an understanding that in doing so consumers
are running up higher electricity and gas bills. Does the
Minister understand that 2.1 million people are behind in their
energy bills at the moment, and that one way to help them would
be to reduce VAT temporarily on home energy bills?
The hon. Gentleman makes a fair point; there are household costs.
That is why my right hon. Friend the Chancellor, through the
package of measures, has supported the incomes of the poorest.
The distributional analysis from the Treasury shows that the
poorest working households have benefited most from the measures
introduced by my right hon. Friend. The best way of supporting
those families is through schemes that the UK, through its broad
shoulders, is able to offer, such as the furlough scheme and the
self-employed income support scheme, which have supported so many
jobs across Scotland.
(Glasgow Central) (SNP) [V]
The Chancellor’s chaotic stop-start approach to furlough last
autumn undoubtedly cost jobs. Failing to continue the £20
universal credit uplift and extend it to legacy benefits is set
to plunge struggling families into hardship, and now the
Conservatives are signalling tax rises and a return to austerity.
To what extent does the Minister believe that that approach has
contributed to 20 consecutive polls in favour of Scottish
independence?
There is a factual error in the hon. Lady’s question, in saying
that there was a stop-start approach to furlough—
There was!
It continued throughout; that is just a statement of fact. In
terms of the wider package, I would refer the hon. Lady to the
fact that the UK Government have provided £280 billion-worth of
support and that bodies such as the International Monetary Fund
have said that the UK’s economic response has been one of the
best examples of co-ordinated action globally. We are able to do
that because we are working as one United Kingdom acting together
and using the broad shoulders of the UK.
Support for Businesses: Covid-19
(Manchester Central) (Lab/Co-op)
What recent assessment he has made of the adequacy of financial
support schemes for businesses during the covid-19 outbreak.
(Beaconsfield) (Con)
What fiscal steps his Department is taking to support businesses
affected by the covid-19 outbreak.
(Eastbourne) (Con)
What fiscal steps his Department is taking to support businesses
affected by the covid-19 outbreak.
(Rossendale
and Darwen) (Con)
What fiscal steps his Department is taking to support businesses
in Rossendale and Darwen constituency.
(Cheadle) (Con)
What fiscal steps his Department is taking to support businesses
affected by the covid-19 outbreak.
The Chancellor of the Exchequer ()
The Government recognise the significant impact of coronavirus on
businesses across every region and nation of the United Kingdom,
and that is why we have put in place an unprecedented series of
measures to provide support, whether that is through the
coronavirus job retention scheme, tax cuts, tax deferrals,
Government-backed loans or cash grants.
[V]
Business support that was originally designed for three months is
now wholly inadequate for 12 or 18 months. Business debts and
deferrals are mounting and now have to start being repaid, and
the holidays are coming to an end, all at one big danger point in
April. Cash grants are worth less and many still do not qualify
for them. While the Chancellor might pat himself on the back,
reports out this week show that nearly 250,000 businesses are
likely to go bust this year, taking many jobs with them. Does he
recognise that he cannot pull the plug all in one go in April,
given that many businesses will not even have reopened at that
point, and that with the effects of the vaccine around the
corner, it makes no economic sense to allow businesses to go bust
at this critical point, having supported them for so long?
No one, least of all me, is patting themselves on the back while
hundreds of thousands of people are losing their jobs and many
businesses are seeing extreme dislocation as a result of what is
happening in our economy. I have put in place a series of
measures, but I have always said that we cannot protect or save
every job and every business. The hon. Lady makes a fair point,
which is why we have said that we will review all our economic
measures to support people through coronavirus at the upcoming
Budget, in the first week of March.
[V]
Many female business owners have found themselves working
full-time jobs at home while bearing full-time responsibility for
childcare and home schooling, all at the same time. May I thank
my right hon. Friend for all the steps he is taking to alleviate
the difficulties experienced by mothers who just want to work and
contribute to the economy with their children safely back in
school?
My hon. Friend is absolutely right, and we owe mums everywhere an
enormous debt of thanks for doing the enormously difficult job of
juggling childcare and work at this tricky time. I know she will
join me in being happy that early years settings have been open
for a while, but she is right to say that the only way to
sustainably solve this challenge is safely to reopen our schools
as quickly as we can.
[V]
I have long believed that there was a compelling case for
reducing VAT for the hospitality sector, and the
pandemic-inspired cut helped to save the season between
lockdowns. May I ask that my right hon. Friend, when he is
looking at his Budget, considers making the cut permanent, to
power the recovery across the UK, including in my destination
town of Eastbourne, where one in four jobs depends on tourism?
My hon. Friend is rightly a champion for her local tourism and
hospitality businesses, and she is not alone; across the country,
hundreds of thousands of these businesses employ 2 million
people. Those businesses are particularly vital in constituencies
such as hers, which is why we reduced the rate of VAT—it runs all
the way through to the end of March. She will know that we have
an upcoming Budget, where we plan to review all our measures of
support.
[V]
As you know, Mr Speaker, many of our manufacturers here in
Lancashire have worked through the pandemic. Will my right hon.
Friend congratulate businesses such as J & J Ormerod plc,
James Killelea and Co Ltd, WEC Group and Perspex, who not only
have worked through the pandemic, but show that high-value
manufacturing and the real economy need to be things the
Chancellor fosters and supports in his forthcoming Budget?
I am very happy to join my right hon. Friend in congratulating
the businesses he mentioned. We know that many manufacturers,
especially those in his area, have worked very hard, particularly
with regard to ventilators and personal protective equipment at a
time of this country’s need. He is right to say that that should
play a part in our recovery. One initiative I would point to,
which I believe will be in and around his area, is the Made
Smarter partnership between Government and high-value
manufacturing, which seeks to foster innovation, digital adoption
and the latest and greatest management processes. It seems to be
working very well and I look forward to learning more about that
initiative.
[V]
Cheadle businesses that faced fines for failing to submit
self-assessment returns by the end of this month will be relieved
by yesterday’s announcement of an extension until the end of
February, as that will remove a great deal of worry and anxiety
from business owners who are already under great pressure. With
the original deadline only a week away, what steps will the
Department take to ensure that all businesses are aware of these
changes?
As an accountant herself, my hon. Friend knows all too well the
fantastic job that these people are doing, under enormous strain,
at this current time. I know that, as she said, she warmly
welcomes the announcement yesterday by Her Majesty’s Revenue and
Customs to waive penalties until the end of February for late
filers. She is right to say that we must make sure that everyone
is aware of this, and we are doing everything we can, on all our
channels of communication, to get this news to businesses. I ask
other colleagues across this House to do exactly the same in
their constituencies.
(Central Devon) (Con) [V]
There is a looming bloodbath for many businesses at the end of
March, when the moratorium on commercial landlords taking action
against tenants in arrears comes to an end. Does my right hon.
Friend recognise that acute danger? What action might he consider
taking to avoid it?
My right hon. Friend knows that the Secretary of State for
Housing, Communities and Local Government is engaged with that
issue and has worked with the industry to put in place various
codes of practice to encourage good and constructive dialogue
between landlords and tenants throughout a difficult situation.
There are promising signs that that is happening.
Self-employment Income Support Scheme
(Aberavon) (Lab)
What steps his Department is taking to help ensure that the
self-employment income support scheme equitably supports people
whose tax payments have been affected by maternity or paternity
leave.
The Financial Secretary to the Treasury ()
The self-employment income support scheme is one of the most
generous in the world and has received claims from almost 2.7
million people so far, totalling more than £18.5 billion. The
amount of the scheme grant is determined based on the applicant’s
average profits from self-employment in the previous three tax
years, as reported through their tax returns. By calculating the
grant on an average of three years of profits, the scheme
supports people who saw a dip in profits for any reason,
including pregnancy.
[V]
The Chancellor likes to claim that the UK offers one of the most
generous support schemes for self-employed people in the world,
but self-employed women who have taken maternity leave in the
past few years are not supported generously at all—in fact, they
have received a lot less financial support than their peers who
have not taken maternity leave. The charity Pregnant Then Screwed
reported that around 75,000 self-employed women have been subject
to—[Inaudible.]
Mr Speaker
Did you get any of that, Minister Norman?
indicated assent.
Mr Speaker
If you can get something out of it, please do.
If I may just say, the hon. Gentleman is wrong. We are not
talking about a claim that is not validated by third parties; it
is understood internationally that the scheme is one of the most
generous in the world. He will be aware that the issue is subject
to legal challenge, which limits what I can say, but I can tell
him that the Government are well aware that some self-employed
people found that their eligibility for the scheme was affected
if they had taken time out of their trade in 2018-19, which is
why, in June last year, the scheme’s eligibility criteria were
revised to ensure that people in that situation were able to
claim self-employment income support.
(Glasgow Central) (SNP) [V]
Since the beginning of the pandemic, the UK Government have
consistently failed to prioritise support for women on maternity
leave. Despite the issue being raised by me and a host of others
repeatedly in this House, the UK Government were taken to
judicial review last week by Joeli Brearley and the tireless
campaigners at Pregnant Then Screwed. Do the UK Government now
accept that it is not a sabbatical, sick leave or a holiday—it is
maternity leave? Will they end their discrimination against
75,000 self-employed mothers?
I am not sure whether the system is working but, as the hon. Lady
will know from my previous remarks, the issue is subject to legal
challenge so I cannot discuss it. I will say, though, that I met
maternity groups as part of the excluded in early December, and
we have taken steps to remedy the situation, where we have been
able to do so, in relation to those who took time out in the year
2018-19.
Environmentally Sustainable Economic Growth
(Arundel and South Downs) (Con)
What steps he is taking to promote environmentally sustainable
economic growth.
The Chancellor of the Exchequer ()
The Government are clear that we will drive growth by investing
in infrastructure, innovation and skills. In doing so, we will
build back better and greener as we recover from the economic
impact of coronavirus, starting, of course, with the Prime
Minister’s green 10-point plan.
[V]
I thank my right hon. Friend for his answer. Does he agree that
the UK is exceptionally well positioned to prosper from the
initiatives he referred to, and that this is another example of
the Government’s unleashing Britain’s potential?
My hon. Friend is absolutely right—our 10-point plan can create
hundreds of thousands of jobs up and down the country. He is also
right that we can lead the world in this journey. We have been
one of the fastest countries to decarbonise over the past few
years and are one of the leading countries not only in phasing
out coal and internal combustion engine vehicles but in offshore
wind and carbon capture and storage. Where Britain goes,
hopefully the world can follow.
(Houghton and Sunderland South) (Lab)
This year, the UK Government have a chance to show global
leadership on the climate emergency
as the host of the UN climate change conference in Glasgow. Green
gilts will be a vital part of the transition to a clean economy.
Last year, the Chancellor promised to launch the first ones this
year. Will he tell us when and why not yet?
We are doing the technical work required to make sure that the
launch of our green gilts is successful. I hope to provide an
update at the Budget, but the hon. Lady can rest assured that we
are working very hard at it. As I said, this will be the first
step in building out a green curve. By doing that and making sure
that the curve has fidelity in terms of confidence in where the
money is going, we can unlock investment for the private sector
across the economy. I know that she will join me in welcoming
that progress.
Self-employment Income Support Scheme.
(Nottingham
North) (Lab/Co-op)
What fiscal steps he is taking to support self-employed people
ineligible for the self-employment income support scheme.
(Wythenshawe
and Sale East) (Lab)
What steps his Department is taking to support the newly
self-employed during the covid-19 outbreak.
The Financial Secretary to the Treasury ()
The self-employment income support scheme was designed to target
support at those who most need it while protecting the taxpayer
against error, fraud and abuse. The Government recognise that
some of the rules and criteria that have been vital to ensuring
that the scheme worked for the vast majority have meant that, in
some cases, people were not able to qualify. This is one reason
why the Government put in place a much wider £280 billion support
package, including increased levels of universal credit, bounce
back loans, tax, deferrals, rental support, mortgage holidays,
self-isolation support payments and other business support
grants.
[V]
It is understandable that, as support schemes were constructed at
short notice, there would be gaps in them. It is less
understandable why, a year later, those gaps have not been better
closed. Many of my constituents are among the millions who have
been excluded from support schemes so far, so, as we approach
that anniversary, what message does the Minister have for them?
The message would be that the Treasury is doing everything it can
to protect jobs, families and livelihoods in the face of the
worst pandemic crisis that we have experienced in recorded
history. It is important to say that, in the case of this scheme,
we have spent considerable time engaging with groups that have
brought forward potential ways of addressing some of the gaps in
support that may exist. As I mentioned, we have had meetings in
December and evaluated suggestions all the way through last year,
including a concrete suggestion in relation to the directors
income support scheme, so we are heavily leaning into this issue.
[V]
I want to raise the case of my constituent, Theresa McGough, who
is a newly self-employed special educational needs expert. She
has not been eligible for any financial assistance during the
pandemic. Does the Minister think that the Government are doing
enough to help people such as Theresa and others?
As I have said, the Government are doing everything they can and
have been working round the clock for a year to address the full
needs of the country across all the different aspect of our
economy and society, including through support for the
self-employed.
(Erith and Thamesmead) (Lab) [V]
The self-employment income support scheme’s third grant closes
this Friday. The crisis has not ended, but the Chancellor has not
provided many details on the future of the scheme. Will the
Minister explain why he thinks it is right that employees can be
furloughed until 30 April but self-employed people have no
clarity about the future of support beyond the end of this week?
I think that it is well-understood that the Chancellor will be
setting out further plans in the March Budget. It is normal for
this time of year for different decisions to be consolidated into
that important fiscal event for well-known reasons.
Financial Services: Equivalence Recognition
(Wimbledon) (Con)
What discussions he has had with his EU counterparts on
equivalence recognition for financial services.
The Economic Secretary to the Treasury ()
Equivalence is an autonomous technical process that each side is
undertaking separately. Officials have had a number of meetings
with their counterparts in the Commission over the past 12 months
to discuss each other’s processes, and we remain open and
committed to continuing dialogue with the EU about its intentions
for equivalence.
[V]
I thank my hon. Friend for that answer. Clearly, it would be
disappointing if the EU could not follow the UK’s offer on
equivalence, given the relative starting positions. Will my hon.
Friend comment on the Government’s ambitions with regard to
mutual recognition of professional qualifications? What are those
ambitions and does he hope that they will be achieved by the
signing of the memorandum in March?
My hon. Friend has a lot of expertise in this area. He will know
that, alongside the trade and co-operation agreement, we had a
joint declaration to establish a structured regulatory
co-operation for financial services and to discuss a whole range
of matters around equivalence determinations going forward. The
memorandum of understanding will be agreed in discussions between
the EU and UK by March 2021. That will establish a framework for
that co-operation. It would not be appropriate for me to give a
running commentary on that, but the plans will come to fruition
over the coming weeks.
Mr (Wolverhampton South East) (Lab) [V]
The Brexit deal was, in effect, a no-deal outcome for financial
services. Already some trade has moved, and there is big
uncertainty hanging over access to European markets for this
vital UK sector. Can the Minister confirm that it is in fact a
Government negotiating aim to secure equivalence recognition for
UK financial services in the memorandum of understanding being
discussed between now and the end of March?
To clarify for the right hon. Gentleman, the equivalence granting
process is an autonomous, separate process from the MOU
discussion. The MOU is about a framework to evaluate the future
direction of financial services across the EU and UK. I remain
very ambitious for the financial services sector. The Chancellor
and I are continuing to have a dialogue—with roundtables with
representatives of the sector this week and next week, as well as
one-to-one meetings—to ensure that we listen to the sector, and
respond appropriately and ambitiously for the future.
UK-EU Trade and Co-operation Agreement: Regional Effect
(Sheffield Central) (Lab)
What assessment the Government have made of the potential
economic effect of the UK-EU trade and co-operation agreement on
each region of the UK.
The Chancellor of the Exchequer ()
We have secured an unprecedented free trade agreement with the
European Union—the first free trade agreement that the EU has
ever reached based on zero tariffs and zero quotas. Across
sectors and regions, it is a good deal that will protect jobs and
investment.
[V]
The assessment conducted by the Treasury in 2018 concluded that
there would be significant regional variation in the impact of
any Brexit deal. We are certainly seeing that, with fishing
fleets grounded, manufacturers hit with extra costs, and the
Department for International Trade apparently advising businesses
to move parts of their operation to the EU to avoid problems. It
is clear that there will be a significant regional impact. Does
the Chancellor agree that he needs to redress that regional
damage from the Brexit deal? Alternatively, does he agree with
the new Business Secretary’s comments in “Britannia Unchained”
that regional division is an “irrelevant” debate?
No one can doubt the Government’s commitment to uniting and
levelling up across our United Kingdom, with an unprecedented
infrastructure investment programme. Notably in the spending
review, we announced something called the levelling-up fund,
which will fund the infrastructure of everyday life in
communities up and down the country, on top of our
once-in-a-generation increase in infrastructure investment in
road, rail and broadband that will benefit equally all parts of
our United Kingdom.
Air Passenger Duty
(Crawley) (Con)
When he plans to conclude his consultation on air passenger duty.
The Exchequer Secretary to the Treasury ()
The consultation on aviation tax reform has been delayed in
recognition of the unprecedented circumstances that the aviation
industry is currently facing. However, I will update hon. Members
on the timing of the consultation in due course.
[V]
The United Kingdom charges the highest air passenger duty of any
country in the developed world. Now that we have left the EU,
domestic air passenger duty is something that we can alter. As we
seek to recover from the covid-19 pandemic and take the
advantages of a global Britain, can we have an early review of
this tax, which is a pressure on our industry?
The Government recognise the important role that the aviation
sector plays in the UK economy. The sector can draw on the wide
range of support measures available, including the recently
announced airport and ground operations support scheme, which
will provide eligible firms with support of up to £8 million per
claimant. However, I reassure my hon. Friend that we remain
committed to delivering the consultation, and will look to
proceed once the challenging circumstances that the sector is
currently facing have eased.
NHS Funding: Wales
(Clwyd West) (Con)
What steps he has taken to help ensure adequate funding for the
NHS in Wales.
The Chief Secretary to the Treasury ()
As healthcare is devolved, it is for the Welsh Government to
ensure that the NHS in Wales has enough funding, using the over
£20 billion of funding they receive from the UK Government
through the Barnett formula.
Mr Jones [V]
The covid-19 vaccination programme in Wales is unfortunately
lagging behind England, but despite that, the Welsh First
Minister has announced that he intends to slow the release of
vaccine to avoid, as he puts it, vaccinators
“standing around with nothing to do”.
Can my right hon. Friend confirm that there are no financial
constraints that he is aware of that would justify this perverse
and irrational policy decision or prevent the Welsh Government
from deploying the vaccine as quickly in Wales as in any part of
the country?
I am happy to confirm to my right hon. Friend that there are not
financial constraints. The UK Government have guaranteed that the
Welsh Government will receive at least £5.2 billion in additional
resource to deliver their coronavirus response, including the
vaccine deployment activities.
Covid-19: Regional Economic Disparities
(Blackley
and Broughton) (Lab)
What recent assessment he has made of the effect of the covid-19
outbreak on regional economic disparities.
The Exchequer Secretary to the Treasury ()
The Government recognise the significant impact of covid-19 on
every region and nation of the UK. I can assure hon. Members
across the House that levelling up remains a key priority for the
Government. That is why the spending review also announced
longer-term measures to support every region and nation,
including a new £4 billion levelling-up fund to invest in local
infrastructure priorities.
It is good to hear that the Government are still committed to
levelling up, but all the academic studies that have been done
have shown that covid has disproportionately affected the
regional economies, with Greater Manchester the third most badly
affected region in the country. Those regions need more support,
but Transport for the North and Northern Powerhouse Rail are
being cut; is that not going in exactly the opposite direction?
I would dispute the hon. Gentleman’s claims. We have taken
unprecedented steps to support people and businesses around the
country. We have supported 19,100 jobs in his constituency
through the coronavirus job retention scheme. Greater Manchester
Combined Authority has been allocated £54.2 million from the
Getting Building fund for a wide-ranging package of projects. We
have also provided over £170 million for the Greater
Manchester-Preston city region and Liverpool city region to
improve public transport. We have also supported the regeneration
of 33 towns in the north-west through the towns fund. There is a
lot that is happening on levelling up. If he would like me to
write to him to explain everything that we have done in his
region, I am happy to do so.
Government Financial Support: Low to Moderate Incomes
(Basingstoke)
(Con)
What comparative assessment his Department has made of the effect
of Government financial support during the covid-19 outbreak on
(a) women and (b) men on low to moderate incomes.
The Exchequer Secretary to the Treasury ()
The impact of tax and welfare policy is best analysed at the
whole-household level. As the Institute for Fiscal Studies has
said, because most people live in households with others and we
do not know how incomes are shared, it is very hard to look at
effects separately for many men and women. That is why the
Government support has been targeted at the most vulnerable. Our
distributional analysis published last year shows that the
Government’s covid-19 financial support protected the poorest
households’ incomes the most as a proportion of their income.
Mrs Miller [V]
The pandemic has been a difficult time for pregnant women in
work, and one in four have faced discrimination, including being
unlawfully singled out for redundancy—a problem not confined to
the pandemic. Will my hon. Friend look again at how other
countries tackle this problem and consider adopting Germany’s
approach of protecting pregnant women from redundancy, which
would also give families much-needed financial stability at what
can be a very challenging time?
We are aware of the difficulties that families are experiencing
during the pandemic and we have put many measures in place to
look at this, but if my right hon. Friend has examples of
specific schemes happening across the world that she would like
me to look at, I am happy to do so within my other role as
Minister for Equalities.
Covid-19: Support for Local Authorities
(North Warwickshire) (Con)
What fiscal steps his Department is taking to support local
authorities during the covid-19 outbreak.
The Chief Secretary to the Treasury ()
The Government have committed more than £10 billion to support
local authorities in dealing with covid in this financial year
and the next, including an unprecedented guarantee to compensate
them for their income losses as a result of the pandemic.
[V]
I welcome the considerable support that has already been given to
local councils during the pandemic. However, I recently had
discussions with leaders of North Warwickshire Borough Council,
which is an incredibly well-run council, and they are still
finding a shortfall of about half a million pounds against an
annual budget of £10 million, due to a mix of lost revenue and
providing additional services to residents, such as extra home
waste collection services. What more can be done to ensure that
we give councils the full backing they need to continue providing
services?
North Warwickshire has received more than £1 million to meet its
expenditure pressures this year, exceeding the expenditure
pressures that it has reported to the Ministry of Housing,
Communities and Local Government. I urge my hon. Friend to
express any further concerns to MHCLG at the earliest
opportunity. As he recognises, a comprehensive package of support
has already been provided, and that support continues.
Topical Questions
(Batley and Spen) (Lab/Co-op)
If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer ()
Throughout this crisis, our overriding economic priority has been
to support people’s jobs and businesses through a range of
measures worth more than £280 billion, including the furlough
scheme, tax cuts, tax deferrals, loans and grants. There will be
a Budget on 3 March, when we will set out the next steps in our
economic response to coronavirus.
[V]
Last week the Chancellor received a detailed and costed policy
proposal for a targeted income grant scheme, written by Rebecca
Seeley Harris and supported by the gaps in support all-party
parliamentary group. That scheme would be a vital first step in
giving meaningful financial support to many of the millions who
have been locked out of the current schemes and who are
desperate, after nearly a year of the covid pandemic. Can the
Chancellor tell us today whether he plans to progress with that
proposal, or does he have another scheme in mind for the millions
in need of support?
I am happy to tell the hon. Lady that my right hon. Friend the
Financial Secretary to the Treasury met the authors of the report
back in December and is considering it alongside all the other
submissions that we receive at the Treasury.
(Yeovil) (Con) [V]
What will my right hon. Friend do to make the UK a more
attractive destination for investment and capital formation, to
encourage the jobs and opportunities of the future that people
rely on the private sector to provide?
My hon. Friend is right about needing the private sector to drive
growth and create jobs. I am pleased to tell him that the Prime
Minister and I chaired the first meeting of the Build Back Better
Business Council, where we outlined our plans to invest in
infrastructure, innovation and skills alongside businesses. We
have also established a new Office for Investment, led by Lord
Grimstone, which is charged with securing high-value investment
opportunities, and I look forward to hearing from him ideas that
we can productively take forward.
(Oxford
East) (Lab/Co-op) [V]
In recent days, the Treasury has been at loggerheads with the
Department for Work and Pensions, insisting on taking £20 a week
from the pockets of 6 million families. It has also been at
loggerheads with the Scientific Advisory Group for Emergencies,
by claiming that financial hardship is not inhibiting
self-isolation. Why is the Treasury putting our economic and
health recovery at risk in this way?
The hon. Lady should not believe everything she reads in the
newspapers. The Treasury and this Government have put in place a
comprehensive and generous set of support to help people get
through this crisis, and the results show that we have protected
those on the lowest incomes the most.
I was actually following the words of the Secretary of State for
Work and Pensions and of SAGE, but I appreciate the Chancellor’s
response. The kickstart scheme was much heralded, but yesterday
we learned that it appears to be missing out around 99 of every
100 young jobseekers. What does the Chancellor say to them today?
I am not entirely sure I know the figures that the hon. Lady is
referring to. What I can say is that, since this scheme was
announced at the beginning of July and opened for applications in
September, it has created over 120,000 jobs for young people.
That is, I think, an extraordinary achievement. I pay tribute to
the team at the DWP for doing that. I am grateful to the
thousands of businesses that are taking part in the scheme. They
are working with us to provide hope and opportunity to a
generation of young people so that they are not scarred by
coronavirus, but can look forward to a brighter future.
(Colne Valley) (Con) [V]
With the lockdown or some form of restrictions set to continue
well into the spring, will the Chancellor please give some
certainty to those businesses and individuals struggling
financially by announcing an early extension to his various
support packages, including help with VAT, business rates and
stamp duty, the self-employment scheme and, of course, the
universal credit uplift?
My hon. Friend will I hope appreciate that the various things he
just mentioned total about, I think, £20 billion or £30 billion,
so he will understand it is reasonable that we consider all these
things in the round at Budget, when we will set out the next
stage in our economic response to coronavirus.
(Hackney South and Shoreditch) (Lab/Co-op)
The Office for Budget Responsibility estimates that HMRC will
forgo around £800 million in customs income and VAT over the next
year. Some is deferred, but much is forgone. Will the Chancellor
tell us what he is doing to make sure that that number shrinks
and that revenue comes in at a time when the Exchequer needs it
really very badly?
I will have to go and check the exact figures, if the hon. Lady
will forgive me for not knowing the specific paragraph that she
refers to. In general HMRC is providing easements over the next
few months as we transition to a new set of trading
relationships, but she can rest assured that we are always
mindful of the impact on revenue and intend fully—very much so—to
have a robust set of mechanisms in place. As she will know, there
is a phased response for getting to that point between now and
July, and hopefully we can work with her to make sure that that
path is as seamless as possible.
(Epsom and Ewell) (Con) [V]
The Chancellor has been widely praised for his work in recent
months, but he has also been honest about difficult decisions
ahead. I have had constituents raise concerns with me about
capital gains tax. He will know that the current rates were set
to optimise revenue from the tax. I know he cannot comment on
individual measures, but can I seek his assurance that he will
not take any steps to raise taxes without doing a proper
assessment of the Laffer curve principle that higher rates do not
always lead to higher revenues?
The Financial Secretary to the Treasury ()
I thank my right hon. Friend for his question, which tempts me
into indiscretion. He may be aware of this, but HMRC publishes
annual estimates to illustrate the impact of changes in tax rates
in a document sexily entitled “Direct effects of illustrative tax
changes”. It is worth saying, however, that these estimates are
themselves uncertain, because of different levels of behavioural
response to tax changes, the potential for wider macroeconomic
impacts and, of course, the interaction with other measures.
(City of
Chester) (Lab)
The pubs and hospitality sector so far has done everything that
has been asked of it during the pandemic, but so far 46% of pubs
have not received local restrictions support grants for November,
let alone December, and 74% of pubs have yet to receive the Prime
Minister’s Christmas bonus of £1,000, so what will Ministers be
doing to speed up these payments and when will the pubs and
hospitality sector get its money?
It is absolutely right that businesses get the funds as quickly
as possible. What I would say is that central Government have
disbursed that funding to local councils across the country, so
it is actually for businesses to take up with their local
authority why they have not received the money. There are two
sets of grants: there are of course our monthly grants, which
have been going for a while now, and the one-off payments of up
to £9,000 that we announced earlier this year. But the hon.
Gentleman is right to urge urgency. I know my colleagues in the
Business Department are doing exactly that with local councils,
but ultimately the responsibility will lie with individual
councils.
(Stockton South) (Con)
Teesside is on the up. It is a place with untapped potential,
skills and expertise, and a place with boundless ambition that
will play host to the biggest economic success story of the next
decade. Can my right hon. Friend think of anywhere better to host
Treasury North than one of the country’s first free ports?
The Exchequer Secretary to the Treasury ()
I thank my hon. Friend for his question. He is a doughty champion
for his region and he should know that we remain focused on the
commitment we made at Budget 2020 to have 750 roles across the
economic campus by the end of the Parliament. The Treasury is
still considering a range of location options for the new campus.
We want to ensure that the chosen location supports our wider
levelling up agenda, but we will certainly take his comments and
representations into account.
(Nottingham South) (Lab) [V]
The Government claim that their central economic mission is to
level up. Can the Chancellor assure me that his Government will
deliver HS2 in full, including the whole of the eastern leg,
because this will be the litmus test of their real commitment to
levelling up?
The Chief Secretary to the Treasury ()
The hon. Lady is right to draw attention to the commitment the
Government have made to infrastructure, including in the
forthcoming integration infrastructure plan, but the levelling up
is not just about rail, as the Chancellor said; it is also about
the £4 billion levelling up fund and, most importantly, about the
review of the Green Book. As Lord O’Neill and others have
commented, that ensures that a whole range of projects better
address the levelling up alongside the significant investment in
rail and other transport infrastructure.
(Wrexham) (Con)
[911421] Wrexham is a town partly founded on brewing. It is home
to four breweries and 64 pubs; the figure pre-covid. The industry
supports nearly 1,700 jobs and generates £11 million in taxes.
While hospitality businesses such as the Magic Dragon Brewery Tap
tell me that the UK Government’s furlough scheme and wider
support packages have been a lifeline, their future remains bleak
as the pandemic rolls into a second year. Will my right hon.
Friend the Chancellor in his forthcoming Budget consider
deferring business rates and VAT payments even further, so pubs
can have a fighting chance of pulling another pint and keeping
the ales in Wales?
The Government understand that this is a very challenging time
for the UK hospitality sector, and we are constantly reviewing
the package of covid-19 support. In order to ensure that
decisions are made to meet these challenges, we will outline
plans for 2021-22 business rates relief early this year, but my
hon. Friend should let her constituents know that for existing
tax liabilities the VAT deferral new payments scheme will allow
businesses with deferred VAT to spread their payments over up to
11 equal payments to 31 March 2022 interest-free.
(North
Ayrshire and Arran) (SNP)
During the global health pandemic, it is worth noting that paid
leave following a bereavement is entirely at the discretion of
employers. Leave experienced by employees costs the UK economy
£22 billion a year and the Treasury nearly £8 billion a year,
with those in lowest-paid jobs much less likely to have paid
bereavement leave. In his upcoming Budget what consideration will
the Chancellor give to statutory paid bereavement leave for all
workers who lose a close family member?
I am happy to look at the specific question the hon. Lady raises,
but she will know that in the last Budget we introduced a
manifesto commitment to bring in neonatal leave, which was warmly
welcomed and many had campaigned for, and I know will make a
difference to families up and down the country.
(Rugby)
(Con) [V]
We have heard many times this morning about the very welcome
support the Chancellor has provided to hospitality businesses
required to close during the pandemic. However, suppliers to the
sector are dependent on its success, and many have seen dramatic
falls in sales. Ahead of getting hospitality up and running
again, is there any additional support he can provide at this
particularly challenging time?
My hon. Friend raises a point mentioned by several Members about
the difficulties businesses in the hospitality sector and their
supply chain have faced during the pandemic. He can tell his
constituents that £1.6 billion is being made available for local
authorities to support businesses that are ineligible for closed
business grants but that may still be impacted by restrictions,
and local authorities have discretion to determine how much
funding to provide to businesses and the flexibility to target
local businesses that are important to their local economies,
which could include businesses in the supply chains for retail,
hospitality and leisure.
(Ealing, Southall) (Lab) [V]
Some small businesses in my constituency cannot access the
support they need to continue to employ staff and survive. The
Government’s incomplete guidance to local authorities has left
that gap in support. Will the Minister fix that flaw in the
system and commit to help small businesses today?
The hon. Gentleman can write to me with the specific issue he has
with the guidance, but in general the grants have been
functioning, I think, very well and local authorities are getting
them out to businesses. They also have access to discretionary
funding. As the name suggests, although there are broad
guidelines, ultimately that funding is to be at the discretion of
individual local authorities.
(Blackpool South) (Con) [V]
The support packages that my right hon. Friend has made available
to the hospitality and tourism industries over the course of this
pandemic have proved invaluable to thousands of businesses in
Blackpool; but as we look to reopen those sectors later on this
year, will he commit to extending the reduction in VAT for
tourism, hospitality and leisure businesses to help maintain
thousands of jobs in my constituency?
As my hon. Friend says, and I thank him for it, the temporary
reduced rate of VAT was introduced to support the cash flow and
the viability of over 150,000 businesses and to protect 2.4
million jobs in the hospitality and tourism sectors. It was
extended in September and extended again, and will now run until
31 March of this year. But the relief comes at a significant
cost, and while the Government keep taxes under review, we have
no current plans to extend it further. I remind my hon. Friend
that there are many other aspects of our financial support that
may be of assistance to his constituents.
(Blyth Valley)
(Con) [V]
The Eat Out to Help Out scheme was seen by many in the
hospitality industry as a lifeline for the survival of their
business after the lifting of restrictions last summer. Will my
hon. Friend assure me that his Department will carefully consider
reinstating the scheme or something similar once we come out of
lockdown?
The Economic Secretary to the Treasury ()
I thank my hon. Friend for his question. Across the pandemic, the
Government have created a number of innovative responses, like
Eat out to Help Out. We will continue to examine very carefully
what package of measures we need to intervene with, and the
Chancellor has indicated that he will be coming forward at the
Budget with an update to the House on that package in due course.
(Bracknell) (Con)
Given the current imperative to forge new trade deals worldwide,
and also to make the new EU trade deal work, what incentives are
being considered by the Treasury to both attract new companies to
the UK and retain those that are already here?
As my right hon. Friend the Chancellor set out a moment ago, the
Office for Investment, led by Lord Grimstone, is focused on
exactly that issue, working in tandem with the Build Back Better
Business Council, which the Prime Minister and the Chancellor
chair.
