Future of Financial Services

Alison Thewliss Excerpts

Monday 9th November 2020 Commons Chamber

[Mr Speaker]

We have two withdrawals, so I come to Alison Thewliss, the SNP spokesperson.

[Alison Thewliss (Glasgow Central) (SNP)]

Thank you, Mr Speaker. The Chancellor said in response to the shadow Chancellor that he was expecting a technical discussion. Well, technical discussion might have been possible if we had not received a heavily redacted statement at one minute to 4, which is disgraceful and disrespectful to Opposition Members. He does it time and again, and it is just not on.

Financial services are of huge importance to Scotland. I note that the Chancellor did not mention Glasgow, where we have the huge Barclays complex coming out of the ground as a sign of confidence in the Scottish economy. It is not uncommon that financial services companies have been planning on moving their assets from London to elsewhere in the UK, and the Chancellor really needs to get behind that. Things have been moved out of the City of London to right across these islands because these are important, good-quality jobs.

This year, coronavirus has overtaken Brexit for financial services in terms of focus and capacity. As a consequence, there has been significantly reduced bandwidth for people working in financial services companies to prepare for the disastrous consequences of Brexit. So can the Chancellor tell us how he will support companies with their preparations, particularly as we do not know what we are preparing for—details of the relationship with Europe are so scarce because we still do not know what that relationship is going to look like? Given that instability and uncertainty are anathema to the financial sector, can the Government provide any clarity on what people ought to be preparing for in only a few weeks’ time?

We welcome the introduction of green gilts. The Treasury Committee has been looking at them, and 16 other countries have done this, including Germany and Sweden. Can the Chancellor tell us how this will impact on Scotland? What discussions has he had with the Scottish Government on this? How will he ensure that Scotland gets its fair share of any investment to come? Will the UK Government take this opportunity of new financial powers to back the transition to a low-carbon future, to accelerate their net zero targets and to match the Scottish Government’s ambitious commitments?

Equivalence is a point in time, and as the UK diverges, there is a huge risk to our access to European markets. As the Association of British Insurers has pointed out, equivalence has been used in the past as a political weapon, so how does the Chancellor plan to mitigate that?

Lastly, the Government must put their own house in order on green issues. The Treasury has a good opportunity to work across different Departments, such as UK Export Finance, to ensure that they are all making their contribution to a greener future. The Chancellor must take this seriously right across the Departments if he is going to come to COP26 in Glasgow next year with anything worth the candle.

[Rishi Sunak]

The hon. Lady talked about moving jobs out of London. It is already the case that the majority of financial and professional services jobs—two thirds—are out of London. I completely agree with her that Scotland has a proud heritage in financial services, and long may that continue.

With regard to providing certainty for firms and the support given to them, the hon. Lady will be aware that we put in place a temporary permissions regime some time ago, which provided that certainty to overseas firms needing to continue operating here after the transition period. They have known about that for a while, and it has been warmly welcomed. With regard to specific financial support, I point her to the announcements on input VAT, which will ensure that UK exports of financial services to the EU are not at a competitive disadvantage. Those firms will be able to reclaim input VAT, which will be worth several hundred million pounds in benefit to them, wherever they are in the UK.

The hon. Lady mentioned the ABI. I think that the ABI will warmly welcome the review that we have put in place on Solvency II. The feature of our insurance industry is the prevalence of long-term annuities. The capital treatment of those is not well managed by European rules, and there is an opportunity for us to improve things in that area, which is why the ABI has, I think, warmly welcomed our review of the Solvency II insurance regulations.

Lastly, the hon. Lady talked about the fact that others might wish to use equivalence as a political weapon. As I have set out, that will not be our approach. We will approach equivalence in a technical and outcomes-based way and seek always to provide transparency and stability, because in doing that, we will cement our reputation as the best place to do financial services in the world.

Financial Services Bill

Alison Thewliss Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution & Ways and Means resolution: House of Commons
Monday 9th November 2020 Commons Chamber

[John Glen]

I thank my hon. Friend for his question. As he says, the purpose of the measure is to provide, during the eight-week moratorium—longer for those with a mental health condition—a set of options, and it is key that the Bill will allow us to compel creditors to accept the new repayment terms. He is right to say that it will provide peace of mind to all consumers, with a compulsion under the provision to bring in debts owed across the public and private sector. He asked me to list the hierarchy of debts, which is probably beyond my capacity at this point, but I am happy to write to him to set out in more detail what the provision gives us room to do.

Clause 33 complements the Government’s pioneering Help to Save scheme, which supports people on low incomes to build up a nest egg. These changes will ensure that people can continue to save through a National Savings & Investments account after their participation in the scheme ends.

As I mentioned earlier, there will be some areas where this country will decide that it is right to diverge from EU regulation. Clause 34 is a good illustration of that, making amendments to the packaged retail and insurance-based investment products regulation, commonly known as PRIIPs. That EU legislation was laudable in its aims, although, one might argue, not quite as laudable in its outcomes and achievements. Concerns have been raised by Members across the House, and most tenaciously by my hon. Friend the Member for Basildon and Billericay (Mr Baron), that it is not working as intended and that there is a risk that consumers may be inadvertently misled by disclosures that firms must provide under the regulation. I am pleased finally to be able to address those concerns. The Bill will allow the FCA to clarify the scope of the regulation. It will tackle the issues around misleading performance scenarios and allow the Treasury to extend an exemption from the PRIIPs regime for undertakings in collective investments in transferable securities—UCITS—which are a type of investment fund.

These are some examples of how we intend to take advantage of a new ability to address issues in retained EU law. However, we have no intention of needlessly, ideologically or recklessly diverging from EU legislation. Instead, we will maintain existing regulations where they make sense for the financial services industry in this country. One instance of that approach is clause 35, which finalises reforms to the European market infrastructure regulation, which the UK supported as an EU member state, while clause 36 contains a change that should provide certainty to markets by ensuring the legal validity in the past and in the future of the financial collateral arrangements regulations.

Finally, clause 37 will make the role of the chief executive of the Financial Conduct Authority a fixed five-year term appointment that is renewable only once, in line with other high-profile roles in financial services regulation. That was recommended by the Treasury Committee not so long ago.

I recognise that Members might be concerned that some of the Government’s prior commitments are not included in the Bill. I assure the whole House that our focus on these issues has not wavered. One issue that came up in questions to the Chancellor earlier was access to cash. The Government are committed to ensuring that everyone who needs it has easy access to cash. I have heard representations on the issue from Members across the House in recent weeks, including my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), whom I met recently, and Members from across Scotland and the whole UK.

Earlier this month, we launched a call for evidence, seeking a wide range of views on the subject’s key considerations. Once we have reviewed the findings, we will bring forward legislation as soon as parliamentary time allows.

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the Minister for making that point, because I was not going to make a great deal of it in my remarks. Does he appreciate the fears on the SNP Benches that by the time the Government get around to legislating on this, there will be no banks left?

[John Glen]

I understand the hon. Lady’s anxiety—it is one she has expressed to me a number of times over the past nearly three years.

We asked Natalie Ceeney to do a review last spring. Immediately the review was completed, we put together the JACS process—the joint authorities cash strategy—and brought together the Payment Systems Regulator, the FCA, the Bank of England and the Treasury. We are working closely with LINK and the banks to look at a new way of making cash available. The cashpoint network in this country is not fit for purpose and urgent work is going on behind the scenes to bring forward a cohesive solution.

The prospect of legislation remains, and the call for evidence a week or so ago is another step in moving this forward as rapidly as possible. This problem has been extended and made worse by our recent experience of covid. I assure the hon. Lady that I am committed to getting to the end of this in a positive way.

To conclude, the Bill marks an important moment in the history of the UK’s financial services sector. It is the next step of an ambitious programme of regulatory reform that will be guided by what is right for UK industry. In short, the Bill will support financial stability and high regulatory standards, promote openness between the UK and international markets, and maintain the effectiveness of this country’s financial regulatory framework. I commend it to the House.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

My colleague from the Treasury Committee, the hon. Member for West Worcestershire (Harriett Baldwin), mentioned earlier that some of the Benches in this place are a little empty this evening. I am sure that that is not because this is not a wonderfully exciting Bill—well, perhaps. But we have to look at the reality of the situation that we are in. We are here in London in lockdown and people are being advised not to travel. So I do not hold a grudge against any Member who has decided not to travel today, for their safety or the safety of their constituents and their families. It is important that we consider each other in this place as well as those out there in every street in the country as coronavirus continues to spread.

I thank the Minister for his briefing on Thursday evening. It was a very good distraction from all the events in the United States. I also thank all the organisations that have provided such helpful briefings in advance of the Bill. The financial services are a significant part of the economy in Scotland in terms of the number of businesses, the number of employees and their contribution to the wider Scottish economy, particularly in the growing area of FinTech, where we have much innovation coming out of our universities.

The Bill is, relatively speaking, a wee bit dull and a wee bit functional. Some bits have been taken out of the back of the drawer at the Treasury and presented in the Bill tonight.

[John Glen]

Harsh.

[Alison Thewliss]

The Minister says that is harsh, but he said himself that there are things here that he has wanted to do for quite a wee while and has not found the mechanism to do. It is a portfolio Bill, as he called it generously, of some things that hang together and some things that are a wee bit tacked on.

The regulations are important, and they affect us all in some way or another. The purpose of financial regulations is to protect us as citizens from the worst extremes of the financial inclinations of those who wish to grab the cash a wee bit quicker. We would all live with the consequences of deregulating to an extreme, so we need to be very careful of the regulations that we make.

The Bill’s objective is to enhance

“the UK’s world-leading prudential standards and promote financial stability”,

to promote openness

“between the UK and international markets”

and to maintain

“an effective financial services regulatory framework and sound capital markets”.

I am sure that that is all very laudable. It is what we had as a member state of the EU. Who could really object to any of those aims? We on the SNP Benches will not be opposing this Bill on Second Reading tonight, but we do hope to put together some constructive amendments for the Government to ignore in Committee. If they would like to surprise me and take them on I would be absolutely made up, but we shall see. I shall go ahead and hope rather than look at experience.

I hope that we can have some good discussions on the things that should be put into the Bill to give people greater protection, and where things should be that wee bit tighter. Despite what the Chancellor said earlier about unilateral equivalence, the reality is much more complex and many firms do not yet know what they are preparing for. Whether it is the worst or not quite the worst, it will still cost money, time and resource, at a time when covid affects us all, and it will still be significantly less advantageous than it was under EU membership or even single market membership.

I am nervous, as are many others, about Parliament’s role in the regulatory framework and where that ends up. CityUK has expressed concerns, as has Barclays, about taking back these powers to hand them straight over to the PRA and the FCA. This is hardly taking back control. I worry that with the safeguards that we have, we will not find out that something has gone terribly wrong until it is far too late, and far too far down the line. I worry that Parliament will find out about these things when it is too late, because that has been the experience of the banking crisis and other things. We need to be careful that we do not end up going down those same roads. A statutory limit on the term of the FCA chief executive is not quite taking back control in the same way. This is giving a whole lot of power to these institutions and cutting out Parliament.

I have some questions and I would be grateful if the Minister picked them up. For example, the Bill will allow Her Majesty’s Treasury to revoke the capital regulation in favour of PRA rules, so what happens to those who are already working to the CRR2 EU regulations and what do they now need to do? Will regulatory decisions and implementation be in line with broader public policy objectives and is there a safeguard within that, because Parliament should be satisfied that existing appeals mechanisms are sufficient and, as Barclays says, that they are commensurate with the increased level of autonomy and rule making for those regulators?

The ABI is also concerned about a number of areas. It talks about the need for the Gibraltar authorisation regime, saying:

“We welcome that Government will work with the FCA to ensure that, once the GAR comes into force, individuals and eligible small businesses using financial services sold in the UK by Gibraltar-based firms can refer disputes to the UK Financial Ombudsman Service”.

That protection ought to be there in black and white but it does not appear quite yet to be at that stage. People need to have that protection—that recourse—if something goes wrong.

It is of huge concern to us that the UK regulators have threatened to deviate from EU rules on share trading if Brussels does not deliver market access permissions to the City of London. The ABI has said that the equivalence process has occasionally been used as a political weapon to wield against third countries. It is concerned about where the overseas funds regime sits within this, particularly because it does not know what might happen should there be a negotiating advantage for one side or another when the cost is borne by companies and consumers.

There are further questions on what this means for existing investors if equivalence is withdrawn. What happens if someone has money in a particular fund and then it goes? What are the practicalities there? What do they need to do as an investor in those circumstances? We need urgent clarity for people so that they know where they stand on these issues. Perhaps the Minister cannot give us those answers yet. That is part of the wider problem that people do not know exactly what is going to happen and how they can prepare for it. There could be a risk that people will withdraw from these funds altogether rather than keeping their money there, which would have further knock-on effects.

We support the increased sentences for insider dealing and market abuse. It is quite right that those should be increased. However, as I have said many times in this House, enforcement is key—having the tools in the box to make sure that we can find these frauds, market abuses and insider dealings and then punish those responsible. That is crucial, because if people are felt to get away with these things, then having the rules is really not enough.

On people exploiting rules and general misbehaviour, I want to talk about money laundering. I was on the Committee that considered the Bill that became the Sanctions and Anti-Money Laundering Act 2018 and I worked on it in this House. Clause 31 amends schedule 2 of SAML to ensure that regulations can be made in respect of trustees with links to the UK. Without it, any powers that HMRC sought to exercise to access information on such trusts are at risk of being held invalid under legal challenge. The Government say that this technical change

“will reaffirm the UK’s global leadership in the use of public registers of beneficial ownership, as identified by the Financial Action Taskforce’s Mutual Evaluation of the UK in 2018. This will further support the public and private sectors to efficiently and effectively target their resources towards potential criminal activity using trusts, maintaining the resilience of the UK’s defences against economic crime.”

That does not stack up to me because there have been opportunities to deal with this.

I was on the Committee on the Registration of Overseas Entities Bill, which sought to look at trusts as well. We took lots of evidence on how trusts are an open door for people to move money around, yet the Government are not really acting to deal with that. The Registration of Overseas Entities Bill went through the whole pre-legislative scrutiny process and then just disappeared. The difficulty is that people are moving money around and buying properties, largely in the city of London, where they can launder that money. There are huge buildings sitting empty in the city because people are using that as a means of moving money about. There is a huge homelessness problem as well, so this is a really pernicious problem that the Government need to get their head around.

I do not understand why there is not more to deal with the issue of trusts, or with the issue, as I have mentioned ad nauseum, about Scottish limited partnerships and proper reform of Companies House. The Chancellor mentioned the consultation on that earlier. That consultation has been going on for ever, it feels like, and nothing has yet changed. The Government have this huge, big, wide, gaping loophole in Companies House that allows people to move money around. If they want to do something properly, I would suggest that they deal with that, and do a lot more to take action on trusts and other means of shunting money about. Not doing that makes this country a home for dirty money. Lots of research has been done on this issue by Transparency International and others. The evidence is there; the action, unfortunately, is not.

The debt respite scheme in clause 32 can be enhanced further. I know the Minister is committed to doing this and wants to act on it. I would be curious to find out a bit more about what he has learned from what Scotland has done so far and how the schemes will work together, because we have had the debt arrangement scheme in Scotland since 2004 and the statutory moratorium since 2011. There are always improvements that Scotland can make and the UK can make as well. I would be very interested to hear what more can be done to improve upon that.

I have been contacted, as many other Members might have been, by Macmillan’s duty of care campaign. What conversations has the Minister had with the Financial Conduct Authority on that campaign? Macmillan fears that many people—people with cancer who are struggling —are finding things incredibly difficult. Can he say with certainty that the guidance put out by the FCA is enough? Could more be done to protect people in the most vulnerable of circumstances?

Help to Save customers have enough on their plate at the moment without having to navigate myriad changes to their saving products. We firmly believe that the accounts should continue to earn interest until this crisis is over. Savers who do not withdraw the funds after maturity and whose balance remains in the account do not seem to be eligible for further bonuses and they are also not earning interest. It seems very unfair to expect low-income savers, who are potentially dealing with the risk of redundancy and are worried about the risk of covid, to change financial products at this time to avoid losing interest. Some of this is the UK Government’s fault for not having set an end date when the scheme was introduced. We argue that they should extend the active period of these accounts at least until the end of this pandemic, so that nobody loses that all-important interest.

What is the communications strategy from the UK Government to make sure that nobody loses out? Since the launch of the scheme, more than 222,000 people have opened Help to Save accounts, with some £85 million deposited, I understand. So this is not a small amount of money for people at the very lowest end of our economy and they need to have some certainty that the scheme will not be rolled up and that they will not lose out because of the changes the Government seek to make in this Bill.

I wish to close by discussing a briefing I received from the Finance Innovation Lab, which makes three well made points about the Bill. First, it says that the Bill threatens to introduce a democratic accountability deficit in financial sector policymaking, and I made that point earlier. We cannot be in the situation where we take all these powers back from Brussels and hand them straight over to unaccountable, arm’s length organisations. They might come before the Treasury Committee once every six months or so, when we will ask them some questions, and that is the extent of the scrutiny they get from this House. We do the best job we can to ask them questions—I see some colleagues from the Committee on the Government Benches tonight—but that is not the same.

Secondly, the FIL also argues, as the right hon. Member for Wolverhampton South East (Mr McFadden) did, that the purposes of the Bill should be broadened to economic, social and environmental outcomes. The Chancellor talked a lot earlier about how important those environmental outcomes are, but they are missing from this Bill. I do not know whether that is because one part of the Treasury is not speaking to the other or how else that has come about, but if the Government are now saying today that these environmental aspects are incredibly important and they should be a key part of COP26, as the former Governor of the Bank of England has also argued, they need to be in the Bill. If they are that important, the Government need to put them in the Bill.

Lastly, the FIL suggests that the Bill should help the UK to be a leader in financial regulation that sets high standards. There should be no backsliding on the standards we have built up as part of being in the EU. It is an area in which we had huge and significant influence as a member state in making a lot of these rules. Now if we want to have equivalence and have access, we are going to have to abide by some rules made by other people, rather than being able to make the rules ourselves. I believe firmly that we should not have less power as Members of this House than MEPs have to scrutinise all of those things that come before them, and we should have a bit more than we have in statutory instruments Committees; we cannot vote on those and we cannot amend them either. So we need to have a whole lot more by way of scrutiny of financial services in the future. In those Committees, I have argued regularly to the Minister that we need a plan and a framework, and we need to see the whole spectrum of what this Government propose for financial services. It needs to involve everybody—the people in the sector and Members from across parties in this House—so that we can build something resilient that we can all have trust and faith in. That trust and faith in financial services is what we all need. We need to be able to trust the institutions and that our money will be well managed and we will be protected in the event that anything goes wrong.

This is all about building something new, but there is really not a huge amount that is new in the Bill. The Government need to do a whole lot more on financial services, which have been neglected as part of the Brexit negotiations, put to one side and not prioritised, despite being an absolutely massive sector of the economy in Scotland and the rest of the UK. I hope very much that we will be able to make amendments to the Bill to improve it and that the Government will listen to those amendments and take them forward in good faith.

--- Later in debate ---

[John Glen]

With the leave of the House, I too would like to speak a second time.  I thank hon. and right hon. Members for their contributions and I welcome the broad support that I believe exists across the House on the Bill. Clearly, I will not be able to address all the points that have been made, but I have taken extensive notes and I shall write to colleagues where I feel I can say something meaningful at this point. But I look forward to further comments to address some of these points in Committee.

The right hon. Member for Wolverhampton South East (Mr McFadden) is right to say that the UK is a key player in the global effort to ensure that globally active banks are subject to strong regulation. I have huge respect for him and his experience in Government. I think he set out very clearly and plainly the fundamental challenges with which we are grappling in this industry. The track record we have in the United Kingdom should give him and other Members comfort that this Government have no intention of watering down regulations that have been agreed on the international stage. High-quality, agile and responsive regulation is absolutely key to the continuing success of the UK financial services sector and to addressing the potential challenges raised by my hon. Friend the Member for North East Bedfordshire (Richard Fuller) in his characteristically powerful speech.

On the matter of equivalence, I would like to address the wide-ranging questions from across the House. Equivalence assessments are an autonomous technical process. We have been clear from the beginning that the politicisation of equivalence is in no one’s interests. We are committed to an outcome-based approach. That means acknowledging how different approaches to regulation can achieve the same regulatory objectives.

A number of Members, including the right hon. Member for Wolverhampton South East, raised green finance. While he acknowledges that it is not directly related to the Bill—he wonders why—I hope the measures announced today show that the Government take their commitments in the green finance space very seriously. I look forward to engaging with him on the substantive points about how regulatory oversight works with the announcements made today.

I welcome the comments from the hon. Members for Glasgow Central (Alison Thewliss) and for Aberdeen South (Stephen Flynn) regarding overseas trust. The Government are taking proportionate and effective action to prevent the misuse of trust, through clause 31. The Government also intend to implement a register, the first of its kind, of beneficial owners of overseas entities that own or buy land in the UK.

[Alison Thewliss]

Will the Minister give way?

[John Glen]

I would be very happy to give way, as always.

[Alison Thewliss]

We both know that the Registration of Overseas Entities Bill was a Department for Business, Energy and Industrial Strategy Bill. Does the Minister have any further gen on what happened to it and when it might come back to this House?

[John Glen]

I think I have demonstrated that I have quite a lot to deal with in the Treasury, but I would be very happy to correspond with the hon. Lady further on the status of that Bill. I know she takes a very close interest in those matters.

On the hon. Lady’s words on the duty of care, the Government believe that the FCA, the UK’s independent conduct regulator, is best placed to evaluate the merits of a duty of care. She will know that last year the FCA published a feedback statement on its discussion paper on duty of care and announced that it will undertake further work to examine how best to address potential deficiencies in consumer protection, in particular by reference to its principles for businesses. The Government will continue to engage with the FCA, as I have done during my time in office, on a very regular basis.

The first objective of the Bill is to enhance the UK’s world-leading prudential standards and promote financial stability. On that theme, my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) asked a number of characteristically insightful questions that I expect to cover in detail in Committee. But I will also look to respond to his letter urgently.

Let me address the constructive points made by all Members on the important issue of the democratic oversight of the regulation of the financial services sector. Our independent expert regulators are a key strength of the UK’s existing framework. The right hon. Member for Wolverhampton South East and my hon. Friend the Member for Wimbledon (Stephen Hammond) should be reassured that it is these expert regulators who will be setting the firm-level requirements. We therefore think that they should continue to play a central role in developing and maintaining regulatory standards, in line with their statutory objectives. However, as my hon. Friend the Member for Wimbledon pointed out, that must be balanced with appropriate strategic policy input from Government and parliamentary scrutiny.

This Bill delivers for the specific purposes of implementing the remaining Basel standards and introducing a new prudential framework for investment firms. It introduces an enhanced accountability framework, specifying regulatory principles that the regulators must have regard to, as well as additional consultation and reporting requirements for the regulators when implementing the changes in the Bill. That sits alongside their existing statutory objectives. In addition, I recently issued a consultation on broader reforms to the regulatory framework as a whole: the future regulatory framework review. As I noted in my earlier remarks, this Government are committed to promoting openness to overseas markets. That is the Bill’s second objective.

My hon. Friend the Member for West Worcestershire (Harriett Baldwin), who is one of my predecessors, spoke to our ambitions for building our relationship with the USA in the area of financial services. I value her comments. It is important that we continue to maintain a truly global outlook, and we have well developed regulator-to-regulator relationships. I thank my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) for his intervention concerning the Gibraltar authorisation regime. A number of Members mentioned the overseas funds regime, for which I am grateful, and I hope that the complexity of this technical measure can be fully discussed in Committee.

As our third objective, it is essential that we maintain the effectiveness of the financial services regulatory framework and sound capital markets. I have outlined the measures in the Bill that will help to achieve both those things. Finally, I listened with particular interest to the typically well-informed speech from my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). He covered a lot of important issues, some of which I may have heard before, and I look forward to discussing them further, as I always do; we do discuss these matters further, and we do make progress on some of them.

This Bill is a critical first step in taking control of our financial services legislation. As I said, it has three objectives: to enhance the UK’s world-leading prudential standards and promote financial stability, to promote openness to overseas markets, and to maintain the effectiveness of the financial services regulatory framework and sound capital markets. I am confident that the Bill will succeed in achieving all three, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Financial Services Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Financial Services Bill:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 3 December 2020.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets. Proceedings on Consideration and up to and including Third Reading

4. Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.

Other proceedings

7. Any other proceedings on the Bill may be programmed.—(David T. C. Davies.)

Financial Services Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a))

That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise provision enabling sums payable in respect of a debt in accordance with a repayment plan under the Financial Guidance and Claims Act 2018 to be payable towards costs of operating repayment plans of the debt respite scheme operated under that Act.—(David T. C. Davies.)

Small Breweries Relief

Alison Thewliss Excerpts

Monday 9th November 2020 Commons Chamber

[Liz Saville Roberts]

I entirely agree with the right hon. Member. At this time now, even if the changes were to be introduced in January 2022, we are, none the less, presenting the breweries with uncertainty that they desperately do not need. The timing of this is really significant and now is not the time to be mentioning these changes, let alone to be moving ahead with them.

I wish to move ahead, although I truly welcome all the contributions from the many Members here, because I am sure that we are all doing the best for the brewers in our constituencies.

[Alison Thewliss (Glasgow Central) (SNP)]

Before the right hon. Lady moves on, I wanted to mention Niall Kennedy of the excellent Wee Beer Shop in Pollokshaws Road in my constituency. As a small independent business, it sells lots of the beers that come from these breweries. Does she agree that the Government should look at this more widely, because those small shops have also struggled through coronavirus, and they rely on the beers that come from these companies, too.

[Liz Saville Roberts]

The fortune of these shops—I have a similar one, Stori, in Bala in my constituency—is dependent on the success and the flourishing of the small breweries.

I will, if I am allowed, go back in time to 2002. My understanding is that the Government of the time decided to introduce reduced rates of duty for three reasons, and I think we should pay attention to these. The first was the poor profitability of small breweries relative to that of larger breweries, which enjoyed better economies of scale of production.

Economy Update

Alison Thewliss Excerpts

Thursday 5th November 2020 Commons Chamber

[Rishi Sunak]

My right hon. Friend will know that I replied to him and his Committee with the answers to his question. There does not exist a specific prediction or forecast, which I think is what he is asking, but what we did provide—and the economic evidence that we considered—was the context for the lockdown being imposed and the impact that the initial lockdown has already had so one could make their own assumptions about what would happen thereafter.

My right hon. Friend will know as well as I do that the Office for Budget Responsibility is one of our pre-eminent forecasters, and it is already forecasting that the economy will fall by about 10% this year, that unemployment will reach 12%—an increase of 2.5 million people—and that in the medium term our economy will suffer scarring of about 3%, which represents tens of billions of pounds of less economic output. He will, of course, also know the impact that this is having on our public finances. That is the situation as it exists today, before we enter the new set of restrictions, which will obviously cause additional stress on all the numbers that I have outlined to him, and he will have seen the Bank of England’s comments this morning that the duration of further restrictions will increase their impact of long-term scarring on the economy.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

I am tempted to read out the comments I made on Tuesday, or indeed any of the contributions I have made in the past six months, because it feels like I have been arguing for exactly the same things from the UK Government all this time. The reality is that Scotland, Wales, Northern Ireland and the north of England have been dingied by this Chancellor until he was forced to lock down in England. I am glad that furlough and the self-employment support scheme has been extended to March, but we should be clear that that kind of support is not unique to the UK. Countries of all sizes have been supporting their people, and many of them have done it more competently and more generously than the UK. Can he confirm that the furlough scheme is not tied to any particular tier and it will be available to all who need it at 80%? Will he refrain from cutting it back to 60%, as before, because that cost many businesses and many employees dearly? Many businesses are as good as closed, especially in hospitality, tourism, travel, events and culture, and they need ongoing support.

I return to the issue of those excluded from the support schemes. It is disgraceful and unacceptable that there is still nothing in the statement for them after eight months. Can the Chancellor tell me why he is still choosing to ignore 3 million people across these islands? Many sectors of the economy in which they work are not going back to normal any time soon. I spoke to Scottish hospitality reps this morning and they are deeply worried about the winter months ahead. They are increasingly indebted, and 70,000 to 100,000 jobs are at risk. It would help them immensely if the VAT cuts that the Chancellor previously announced could be made permanent. I welcome the additional £2 billion for Scotland, because Scotland has been able to provide hospitality businesses with rates relief, but we need clarity on the future longer-term funding to plan ahead.

A growing number of businesses cannot afford to pay for redundancies should they go bust, so what provision is the Chancellor making for supporting those who may yet lose their jobs as businesses go to the wall? Will he extend the £20 uprating of universal credit into the year ahead as well? Will he expand it to legacy benefits, because those on legacy benefits are really struggling? Will he enhance statutory sick pay? Will he listen to Maternity Action and Pregnant Then Screwed on their demands for women to be kept safe and their incomes protected?

This has been a complete bùrach, but it does not need to be. Will the Chancellor work with all parties and the devolved institutions? At the very least, could he give the Cabinet Secretary for Finance in Scotland, Kate Forbes, the courtesy of a phone call?

[Rishi Sunak]

I am glad the hon. Lady welcomed the extension of job support through to next year. With regards to Scotland, it is clear, as even the First Minister has conceded, that the generous support currently available in Scotland is only possible and affordable because we have a Treasury that represents the whole of the United Kingdom. I can, of course, confirm that the coronavirus job retention scheme is a UK-wide scheme. We will continue to apply the furlough to each part of the UK equally, treating every citizen, no matter which region of the nation they live in, the same.

The hon. Lady also asked some specific questions and I am happy to provide her with the answers. Scotland will receive an upfront guarantee today worth £8 billion. That is an increase of £1 billion on the previously agreed upfront guarantee. That funding is for the Scottish Government to use as they see fit. The hon. Lady asked many questions about supporting businesses and people. It is, of course, up to the Scottish Government to make those choices on what to do with their extra £1 billion. We look forward to hearing what they plan to do with that additional funding. It is also worth bearing in mind, as we hear from the hon. Lady about the future Scottish Budget, that the Scottish Government have the ability to raise taxes. The Scottish Government have the ability to raise the funds they need to fund the various projects they would like to fund. If those things are important, then of course the Scottish Government will be able to make those decisions on behalf of their people and be held accountable for them.

Lockdown: Economic Support

Alison Thewliss Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Steve Barclay]

My right hon. Friend is right to point to the fact that some were not covered. In fact, that has been an area of much debate within the House. He will understand that there is a distinction to draw between employees who, because their details had not been notified to HMRC at the cut-off point last time, were excluded, and those who because of the furlough extension will be included moving forward, so some of that population cohort are covered.

In respect of the self-employed cohort, my right hon. Friend will be aware that we have so far offered over £30 billion of support to the self-employed, which is generous by international standards. He knows, however, that, within that, there are different cohorts. There is the cohort relating to company directors, where the issue remains the same: what is dividend income and what is not. He will know that another part of that group is those earning above £50,000, and we made a decision to target support below that threshold. He will know that some people are self-employed but that is not the majority of their income—less than 50% is through their being self-employed—and that we targeted funding at those for whom self-employment was their main provision. So there are different cohorts within the excluded population, but those who were employed will be covered by the furlough extension.

[Alison Thewliss (Glasgow Central) (SNP)]

The UK Government continue to lurch around in absolute chaos, with a Prime Minister forced, due to the leak of his plans, to come on TV and, after hours of delay, squeezing in before “Strictly” to announce an English lockdown and the extension of furlough just before it was due to expire. We have been telling them for months that it would need to be extended. While I welcome the action, this late extension will be of absolutely no comfort to those who have already lost their jobs due to the Government’s incompetence, or to the businesses in my constituency who have done their utmost to support their staff and now have no idea where they stand. It is no comfort either to those who continue to be ignored. Those excluded from the initial support schemes face a bleak winter ahead. Will the Chief Secretary ensure that they do not lose out again? There are still many sectors of the economy that cannot go back to normal.

The overwhelming sense, for many of us, is that this is not a Union of equals. When Wales, Northern Ireland, Scotland and parts of the north-east of England asked for furlough to be extended this autumn, they were told that the Chancellor’s magic money tree had lost all its leaves. Yet, when the Prime Minister decided that England needed to go into urgent lockdown, it turned out that the magic money tree was in fact an evergreen.

Yesterday, the Prime Minister gamed his answers on furlough in the House in a pathetic and transparent attempt to make the hon. Member for Moray (Douglas Ross) look good, but he was contradicted on Sky News this morning by the Secretary of State for Housing, Communities and Local Government who said it would be up to the Chancellor to decide if furlough would be available to the devolved nations after 2 December. In an act of further disrespect, the Chancellor is not even here to answer this question. Will the Chief Secretary therefore be clear and honest about whether the Treasury will make furlough and SEISS available at 80% to any part of these islands that requires that after 2 December?

[Steve Barclay]

The hon. Lady started by saying that we were disrespecting parts of the United Kingdom. I was on a call yesterday with the Chancellor of the Duchy of Lancaster, the First Secretary of State and the Home Secretary and others, with the First Minister of Scotland, the First Minister of Wales and the Deputy First Minister of Northern Ireland as part of our regular dialogue. That continues across the United Kingdom and, indeed, at official level. The chief medical officers liaise extremely closely together.

Secondly, the hon. Lady’s various grievances are somewhat both surprising and disappointing when the Government have listened and introduced, for the first time, an up-front Barnett guarantee that has provided the Scottish Government with £7.2 billion of funding at an earlier point than would traditionally be the case, recognising the volatility of the situation with covid. It would be good for her to recognise that that is unprecedented and different. Again, on the call yesterday, I signalled to the First Minister that this week we would update with a further uplift—following our unprecedented action—to give more clarity on the Barnett guarantee and the consequentials flowing from that.

Thirdly—[Interruption.] The hon. Lady keeps chuntering. Many of the schemes are UK-wide ones: we have extended the loans, the coronavirus job retention scheme and the self-employed income support scheme. Those can be delivered through the broad shoulders that the United Kingdom offers. It is true that, through that capacity to act as one United Kingdom, we have been able to protect up to 1 million jobs in Scotland. It is important that we work together. That is why we were engaging with the Scottish Government yesterday. More can be achieved if the Scottish Government and the UK Government work together. That is how, to date, we have protected up to 1 million jobs, and that is the best way forward.

Government Response to Covid-19

Alison Thewliss Excerpts

Tuesday 3rd November 2020 Westminster Hall

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Sir Charles.

I am grateful for the opportunity of this debate on the Government’s response to covid-19, which was not particularly effective. Unusually in debates in this place, there is cross-party agreement that their response was not particularly effective, albeit perhaps not always for the same reasons. Conservative Members and I might not agree on many other things, and we might not agree today, but there is agreement in this room that the UK Government’s response to coronavirus was not particularly effective.

We can see that in the figures, the latest of which appeared today and showed over 1 million cases recorded across the UK and 46,853 deaths. Those figures should chill us and give us cause for reflection. We could always have done more to prevent those deaths and the upset and suffering caused to so many people. My thoughts go out to everybody who has been affected, including my friend the hon. Member for Strangford (Jim Shannon), who spoke of his family circumstances. It diminishes those deaths to say that we should get back to normal. We should not do that. We should try to protect more people in the weeks and months to come.

The UK has among the highest number of deaths and of cases in the world, so we have done something wrong. I fully accept that we did not know what we were dealing with—everyone muddled along and did the best they could—but we have now had many months to get this right. The UK Government spent lots on Serco’s ineffective track and trace system, and money has been thrown at the wrong kind of PPE that could not be used, yet we still do not have a proper plan. We saw the image of the Prime Minister hustling on to the television and disrupting Saturday night’s TV schedules because his plans had been leaked, only for him to announce lockdown not because of Wales, Scotland, Northern Ireland or northern England, which had asked for and needed it given what they were going through, but because the south of England needed it, showing the chaos the Government are in.

The Government were told time and again to plan ahead. Only the other week I asked the Chancellor to plan ahead, to extend the furlough and to accept that things are not going back to normal any time soon. Businesses in our constituencies need that additional support in the weeks and months ahead because we cannot go back to normal.

Sectors of the economy—hospitality, leisure, tourism, transport, culture and the arts, conferences and exhibitions, weddings; the list is endless—cannot go back to normal because it is not safe for them to do so. In many cases, the Government seem to have ignored that reality, but they should not do so.

The other issue raised by my friend on the Treasury Committee, the hon. Member for Wycombe (Mr Baker), is the gaps in support. The Committee highlighted those gaps in its work and offered suggestions on how they might be addressed by the UK Government, who of course have the powers and the money to do so. The gaps remain. Those who run their own businesses—company directors and freelancers—have been advised by the UK Government to take up freelance roles and organise their businesses, only for them now to find themselves with no support and no prospect of it, because following the Prime Minister’s announcement at the weekend it does not seem as though those gaps will be plugged. The Government know about this. They have been told about this. They have been offered solutions, yet still they ignore a significant group of at least 3 million people. How the Government expect those people to pay their bills and feed their kids I do not know, because they cannot.

The hon. Member for Strangford mentioned the financial pressures of people on the minimum wage, who cannot survive on two thirds of their wages—nor should they be asked to do so. People on benefits are struggling. There has been no guarantee that the welcome £20 uplift to universal credit will be extended. It was not extended to people on legacy benefits—many millions across the UK—who are struggling and need that additional support.

I welcome the announcement made today by the Secretary of State for Work and Pensions on extending the minimum income floor to April, I believe. If that extension has been made and the DWP has accepted that there needs to be a change to the minimum income floor, why not to everything else? Why pick this one aspect that needs additional support and extend it to April, but nothing else? The furlough for the self-employment scheme runs until December. Why not extend it? Why not look at the reality we face? If the Government do not need to use it, that is fine, but it would be in place if it was needed. That is crucial in enabling families and businesses to plan.

I was disappointed to hear the comments made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski). He accused devolution of being about division, and the Mayors—particularly Andy Burnham—of grandstanding. They are not. They are representing the people who elected them. That is their job. That is their duty. That is their role. It is the UK Government’s role to listen. If the UK Government had listened and reacted in kind, there would have been no need for that grandstanding, and no need for those Governments to be calling for more. It would have been something that would have been put in place in partnership. It should not be that these things have to be conducted in the media. These things should have been agreed well ahead of that having happened. The Government failed by not listening to those directly elected Mayors and devolved institutions, and that is why we have ended up in this situation.

I dispute the point made about the ten years of austerity that we have seen. I read an article on the website of the British Medical Association, which said that austerity had actually made the UK more vulnerable to coronavirus and its effect. In an article about experiences from the front line, it described austerity as “covid’s little helper”. That should also give cause for thought.

[Daniel Kawczynski]

You always run out of other people’s money.

[Sir Charles Walker (in the Chair)]

Order.

[Alison Thewliss]

It is all of our money. The Member talks about other people’s money. It is all of our money. We all pay in and we all deserve to have things when we need them. Part of the situation we are in is because of that. I shall wind up, Sir Charles, because I can see the clock.

There is much talk of scientists and different scientific opinions, and that is fine. Scientists are the experts in many ways on this. We should not judge them too harshly, because we have been finding out more all the time. Those scientists have the experience and qualifications that most of us in this room do not. We can have our opinions on which scientists we want to believe, but in the end we have to take the best possible evidence, do the best we can, and try to prevent any more people from losing their lives to coronavirus in the weeks and months ahead.

[Sir Charles Walker (in the Chair)]

Ms Hayes, if you take 10 minutes and the front Bench takes 10 minutes, Mr Drax will get two minutes at the end and we will have landed this thing perfectly.

Covid-19: Economy Update

Alison Thewliss Excerpts

Thursday 22nd October 2020 Commons Chamber

[Rishi Sunak]

My right hon. Friend is absolutely right. The Opposition referenced the SAGE minutes but seemed to forget about that part of them, which rightly struck a balance between protecting jobs and protecting lives. He can rest assured that the Government will always do that. I may spare the chief economist the pleasure of attending the press conferences, but my right hon. Friend is right to say that that analysis is taking place. I have presented some of it at the press conferences, and I am happy to talk more about it at the Dispatch Box.

Fundamentally, my right hon. Friend knows, as I do, that our economy faces enormous strain. Almost three quarters of a million people have already lost their jobs, and, sadly, more will. That is why a regional, targeted approach is the right one. It allows us both to protect lives and to protect livelihoods.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

This is the third statement from the Chancellor in the space of a month, but that is not a sign of good management; it is a sign of panic and chaos from this Government. None of this should be coming as a surprise to them. It is telling that the Government have put out more under embargo today than they gave out to the Opposition spokespeople—a sign of real disrespect to the other parties in this House.

We in the Opposition have called for more certainty and a plan, because the evidence is that we are not coming out of this coronavirus crisis any time soon. The Chancellor has not listened or responded, so I ask again for three things. I ask him to listen and to act; to extend furlough and the self-employment income support scheme at the rates from earlier in the year to protect jobs and livelihoods; and to fill the gaps and help those who are excluded completely from his support schemes. He knows that that is a problem, and he is choosing to ignore it.

I ask the Chancellor to keep the £20 uplift to universal credit and extend it to legacy benefits, including for those who have disabilities. Two thirds of the minimum wage is not enough to live on, and not everybody is entitled to universal credit. Huge gaps remain: carers, asylum seekers, those with disabilities and those with no recourse to public funds have all been left behind by this Government, with a cold, long winter ahead.

Significant sectors such as culture and the arts, hospitality, food and drink wholesalers, tourism, transport and aviation, and many more are not going back to normal any time soon, and they deserve Government support. Will the Chancellor align his support scheme with the Scottish Government’s public health proposals and those of the other devolved institutions?

UK Government support for Scotland does not go far enough to mitigate the local lockdowns that we have faced. The UK Government must now provide clarity on the Barnett consequentials to help us to plan and protect businesses and our people. The Scottish Government need this now—today—not in three months’ time, not eventually and not at some point in the future. We need it now, and the Chancellor should give clarity on it today so that the Scottish Government can act.

The Chancellor’s scheme has been full of holes. Time and time again, he comes here in a knee-jerk reaction, full of panic, rather than planning ahead for a situation that we told him would arise. This is nowhere near “whatever it takes”. I ask him to go further today, and to work with all the Opposition parties and the devolved institutions to get this right.

[Rishi Sunak]

When we outlined the original job support scheme, it was actually very warmly welcomed not only by various business groups, including the CBI, the Federation of Small Businesses and the chambers of commerce, but by the trade unions, because everyone at that moment recognised that it was a significant and generous intervention to protect the jobs and livelihoods of the British people. But the situation has changed. The health restrictions are having an impact, particularly in the hospitality sector, which the hon. Member for Oxford East (Anneliese Dodds) mentioned. That is why we have taken the steps that we have today. We are providing the certainty that she asked for, as this scheme will last for at least six months through to next spring. There is certainty over that. The grants we have outlined today will work on a monthly basis for as long as businesses are either in tier 2 restrictions or are closed under tier 3. Businesses can plan on that basis.

With regard to the Barnett consequentials, the Government will always ensure that people will benefit from this support wherever they are living in the United Kingdom. That is why we have provided an up-front guarantee to devolved nations worth £14 billion, which will help them also to plan at what is, I understand, a difficult time for everyone.

Oral Answers to Questions

Alison Thewliss Excerpts

Tuesday 20th October 2020 Commons Chamber

[Rishi Sunak]

[Alison Thewliss (Glasgow Central) (SNP) [V]]

[Rishi Sunak]

[Alison Thewliss]

[Rishi Sunak]

Areas with Additional Public Health Restrictions: Economic Support

Alison Thewliss Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

The Chair of the Treasury Committee raises an extremely pertinent point, which I know my right hon. Friend the Chancellor has heard loud and clear. That is why we have seen repeatedly in the measures that the Chancellor has brought forward a targeting—particularly, as the Chair of the Select Committee says, in areas such as the hospitality sector, which have been acutely hit—with a package of measures, such as the cut in VAT and the package over the summer. For specific areas such as the independent cinema sector, there has been the £30 million of funding for the British Film Institute. That is an individual measure, but it does not address the much wider part of the cinema sector and the major chains. It is about looking at targeted measures of support in response to the issue that the Select Committee Chair raises.

[Alison Thewliss (Glasgow Central) (SNP)]

Local lockdown is a reality, and there is a potential for a national lockdown of some kind as we go into the months ahead. Livelihoods have been disrupted once again and the viability of businesses is being threatened by these restrictions, which are necessary to protect public health.

Kate Nicholls of UKHospitality told the Treasury Committee this morning that sector-specific restrictions require sector-specific support. What sector-specific support is the Minister going to bring forward for sectors such as hospitality, events, tourism, funfairs, culture and the arts? The Chancellor earlier seemed to suggest that people should just go and get another job, which is deeply offensive to many in those sectors.

Failing to support and sustain businesses right now risks putting those businesses over the edge so that they will not be there for a recovery in the future. The Minister must speak to the Chancellor today, extend the furlough in the self-employment support scheme and fill the gaps for those who have not had a single penny from the Government since lockdown began. People are depending on this UK Government, with the economic levers that they have. The Government are failing in their duty to protect those jobs and livelihoods right now. They are letting millions of people down and accepting the harm of mass unemployment that will follow.

The Scottish Government are limited in how much they can spend and in how much they can borrow, which is very limited. They do not even have the certainty of a UK Budget to know how much they will receive in the months ahead. If Scotland needs to lock down on public health grounds, how much money will come in support?

[Steve Barclay]

The hon. Lady says that she seeks targeted measures, but then seems to ignore the £1.57 billion that the Chancellor announced for the arts—exactly the sort of targeted package that she was referring to. She then says that that is not enough, but it is unclear how long the SNP would want to extend schemes such as the furlough, how targeted that would be on specific sectors and what that would mean for the supply chains for those sectors. We think that it is right to be honest with the British public and ensure that we target support beyond the eight months of the furlough, in the way that the Chancellor set out, with the job support scheme and the extension of the self-employed income support scheme.

On certainty of funding for the Scottish Government, I have had regular discussions with the Scottish Finance Secretary. I would have welcomed the hon. Lady’s acknowledgement that we had done something unprecedented in guaranteeing the Barnett consequentials in order—as the Scottish Government had requested, and responding to their wishes—to give them confidence in the funding pipeline. That had not been done before. The Government did it to give the Scottish Government confidence on the Barnett consequentials. An acknowledgement by the hon. Lady of that point would have been welcome.

The Economy

Alison Thewliss Excerpts

Thursday 24th September 2020 Commons Chamber

[Rishi Sunak]

I thank my right hon. Friend for his comments; I am sure he will see in much of what we have announced today some of the thinking in his latest report. I thank him and his Committee members for all the input they have provided in helping us to think about the next phase of our economic response. He is right that this package focuses on employment and, indeed, on supporting businesses with their cash flow.

With regard to the self-employed, I am glad my right hon. Friend welcomes the extension of the existing support grant. Virtually no other country in the world has done that, and it comes on top of the most generous support for our self-employed of almost any country throughout the response to this crisis. Of course, I will be happy to meet him, but I know he will also be pleased to learn that the measures today to defer income tax self-assessment will be of particular importance to our self-employed small businesses.

[Alison Thewliss (Glasgow Central) (SNP)]

Scottish National party Members are glad that the Chancellor has accepted the need to extend support, but it comes very late in the day and is little comfort to those who have already lost their jobs due to the impending end of the furlough scheme. Industry, trade unions, the Treasury Committee, people across the country and hon. Members across parties in this House have been pleading with him for months now, and it feels as if it is only the latest spike that has prompted his action.

Coronavirus is not done with us yet. The furlough scheme has saved jobs and kept people paying their bills and mortgages. It has been incredibly important and it is a shame that the Chancellor is ending it at the end of next month. Hospitality, travel and tourism, aviation exhibitions, culture and performing arts, even travelling showpeople, and a host of others cannot go back to normal work because the Government have placed restrictions on their businesses.

Those jobs and those businesses are viable—it is not for the Chancellor to decide the viability of businesses. Ending the scheme put 61,000 Scottish jobs at risk. His measures on the pay-as-you-grow scheme recognise that many businesses have deferred payments and have mounting debt. However, the problem for many businesses is not income deferred, but income lost completely, so will he go further and convert those loans to grants and equity, to give companies a bit more certainty about their future? We welcome the hospitality and tourism VAT cut, but will he reassess that in March and perhaps consider keeping it in place permanently to help those businesses pick up, hopefully, through an improved situation next summer?

There is nothing here, nothing whatsoever, for those who have been excluded from existing support schemes—for freelancers, the Forgotten Ltd, the pay-as-you-earn employees, the new starters, the women on maternity and all those who have had not one penny piece from this Government for six months. The Chancellor cannot say he does not know that that is a problem, although he still refuses to meet them. How dare he say that these 3 million people should be left high and dry with nothing?

Will the Chancellor introduce further conditions to prevent unscrupulous employers from exploiting the new schemes as BAE and others have done? Will he support the fire and rehire Bill from my hon. Friend and colleague the Member for Paisley and Renfrewshire North (Gavin Newlands), which would prevent that exploitation in future?

The Chancellor did not have the courtesy to lift the phone to the Cabinet Secretary for Finance in the Scottish Government, Kate Forbes, or her counterparts in Wales and Northern Ireland, to let her know that he plans to scrap the autumn Budget. They found out on Twitter. It is not the first time this Government have had a lack of respect for the devolved institutions, because that happened last year, too. Does he appreciate the very difficult situation he has created? With no access to the fiscal levers and no clarity on the funding settlement, he has tied both of Kate Forbes’s hands behind her back. What does he intend to do about that?

[Rishi Sunak]

I think the hon. Lady is continuing to ask for an extension of the furlough scheme, but fundamentally I do not believe that that would be the right thing to do. At this stage of the economic recovery it is better that our support is targeted and focused on supporting viable jobs in our economy, and that means a new approach. Extending the furlough and allowing people to be at home full time is not the right approach in this phase of the economic crisis. Our new scheme will ensure that we provide support to those who need it most and protect as many viable jobs as possible in many of the industries she mentioned.

The hon. Lady asked about conditions. I agree with her that there should be conditions on larger companies accessing support from the Government for wage protection. There will be conditions on capital redistributions and on the ability to provide redundancy notices to employees while they are on the scheme, and, in the first place, limiting the eligibility for large companies to those that are most in need.

On dialogue with the Scottish Government, I am pleased to say that the Chief Secretary to the Treasury speaks regularly with his counterparts, as I believe he will be doing very shortly. There is a well worked process for how devolved nations’ budgets are set. There is absolutely no requirement for a UK Budget to be done beforehand. Indeed, that was not the case earlier this spring. We will have Office for Budget Responsibility forecasts later this autumn. On the basis of those forecasts, the normal work will be done with our counterparts in the devolved authorities to ensure that they can set the budgets they need.