Covid-19: Economy Update

Angela Eagle Excerpts

Thursday 22nd October 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend has been right to champion the situation for his local businesses. I know that they will warmly welcome this. I can give him the assurance that we will work as quickly as possible to provide the guidance. As I said, the grant value will be calculated on the number of hospitality, leisure and accommodation business premises, scaled by their rateable value. Added to that will be a 5% discretionary top-up, and then the local authority can use its discretion to allocate the money as it sees fit for its local area.

[Ms Angela Eagle (Wallasey) (Lab)]

It seems the Chancellor’s much-vaunted winter economic plan has not even lasted the autumn. His tinkering with the system demonstrates that he has been behind the curve all along, and it has sowed hardship and confusion. Why is the support he offered in March not being replicated as the virus comes back and we are suffering a second wave in October? Why is he trying to achieve local lockdowns on the cheap?

[Rishi Sunak]

I would not consider that providing £200 billion of total support could ever be accused of doing anything on the cheap. That money has gone to support public services like the NHS, and people’s jobs, livelihoods and businesses. I commit to this House that we will continue to do everything that is required, and continue to adapt and evolve as the circumstances demand.

Covid-19 Economic Support Package

Angela Eagle Excerpts

Wednesday 14th October 2020 Commons Chamber

[Anneliese Dodds]

I will not, because so many Members want to come in on this debate.

We brought this motion to the House today because the Government have not been doing what it takes to support areas under additional local restrictions. Currently, those are in the north of England and parts of the midlands, Scotland, Wales and Northern Ireland, and Members representing those areas know that that is the case. So I appeal to them to put their constituents’ jobs and livelihoods first, and support this Opposition motion. [Interruption.]

[Ms Angela Eagle (Wallasey) (Lab)]

Shut up!

[Mr Speaker]

Order. The hon. Members for Wallasey (Ms Eagle) and for Stoke-on-Trent North (Jonathan Gullis) can both be quiet. I want to get on with the business, and I do not want one person to start to entice others. Let us see whether we can make some progress. Let us have a good, well-mannered debate, as that might be helpful to this House.

--- Later in debate ---

[Rishi Sunak]

The most vulnerable have been at the forefront of our mind throughout this crisis, which is why it is clear from the distributional impact of our interventions, which was published over the summer, that they have benefited those on the lowest incomes the most. It is there in black and white: a Conservative Government making sure the most vulnerable are protected through this crisis.

Any responsible party of government would acknowledge the economic cost of a blunt national lockdown. The Labour party may say it has a plan, but be under no illusion: a plan blind to the hard choices we face—a plan blind to and detached from reality—is no plan at all.

[Ms Angela Eagle]

In the Liverpool city region, which contains my constituency of Wallasey, there is £40 million of unspent support for business that the Chancellor generously granted in the first wave of the pandemic. Given that we are in tier 3, will he say today at the Dispatch Box that he will release that £40 million so that the local authorities in the Liverpool city region can apply that money to help their local businesses during this highest level of lockdown that we are suffering at the moment?

[Rishi Sunak]

I know what a difficult time this is for the hon. Lady and her constituents. With regard to underspends—I will come on to this later—I think it is wrong to think of them in that way. That was the Government giving an advance to local authorities to make payments to businesses. That was done on the basis that every local authority will have a wildly different degree of overspend or underspend, which we true up at the end of the process. We could equally have asked local authorities to make payments themselves and reimbursed them afterwards. There is significant financial support both for her local authority and the businesses in her area that have closed down. That was announced by the Prime Minister and I will come on to address that in detail later. It is right that that support is there.

Let me reiterate our plan. The House will be well aware of the gravity of our economic situation. The latest figures show that our economy grew by 6% in July and 2% in August, but it remains almost 10% smaller than it was before coronavirus hit. Business investment suffered a record fall in the second quarter of this year. Consumer sentiment remains well below its long-run average. Despite the significant support we have provided, the data is beginning to reveal the true extent of the damage that coronavirus has caused our labour market. The latest statistics published just yesterday show employment falling, unemployment rising and welfare claims rising. The revisions that the Office for National Statistics has made to its previous estimates show that unemployment was higher than it thought over the summer.

I have talked about facing up to the difficult truths clearly, and we are facing an economic emergency, but we are acting on a scale commensurate with this emergency as we address my single biggest priority: to protect people’s jobs and their livelihoods. We have put in place a comprehensive plan to protect, support and create jobs in every region and nation of the United Kingdom. Through more than £200 billion of support since March, we are: protecting more than 9.5 million jobs through the job retention schemes; strengthening our welfare safety net with an extra £9 billion for the lowest paid and most vulnerable; granting more than £13.5 billion to those who are self-employed, with further grants to come; and protecting over 1 million small and medium-sized businesses through £100 billion of tax cuts, tax deferrals, direct grants and Government-backed loans.

--- Later in debate ---

[Ms Angela Eagle (Wallasey) (Lab)]

The Government have already conceded that fighting the spread of this dangerous covid-SARS virus in our country requires extraordinary levels of state action and support, but now, just as the fight is intensifying, it is clear that they have lost their nerve. We are not only battling this deadly virus; the Prime Minister is fighting his libertarian instincts and the right-wing ideologues in his party. They are opposed to the collective state action that is necessary to save lives and mitigate the damage from the pandemic. The delay that this fight caused in March left us with a double whammy of the highest per-capita death toll in Europe on top of the largest economic hit in the G7, and now, this unforgivable dereliction of duty looks like it is happening again.

As the Prime Minister dithers, the virus spreads. His failure to take timely and firm action will cost more lives and wreak more damage on our economy. As he courts his mutinous Back Benchers and abandons the science to keep them sweet, all the warning signs are flashing red again. He is behind the curve and he knows it, and since the SAGE minutes were published on Monday night, we all know it, too.

The Government have lost the trust that they need to lead the fight against this deadly threat. Their partisan, high-handed behaviour has made it worse, excluding Parliament completely. There are constant briefings to the media, and an obsession with outsourcing and centralisation has caused the failure of Test and Trace and the scandal of PPE supplier contracts to Tory donors. And:

“We will do whatever it takes”—

has now turned into the inadequate furlough-lite proposals that the Chancellor has recently come up with. Just as the virus returns, he has packed up the safety net.

For my constituents in Wallasey, who are now in tier 3 and facing a local lockdown, vital support disappears at the end of the month. In Wirral, 31,000 people are still on furlough and it will disappear at the end of the month, just as the virus comes roaring back. What replaces it is completely inadequate, as the Chancellor knows only too well, and those who are losing their jobs or their business do not want a lecture from him about how much he has already spent. Those who are excluded completely from this support in the first place—the freelancers, some of the self-employed—do not want that lecture either. They want a Government who will recognise the hardship that the pandemic has caused and be there to help. The least that the Government could have done was to repurpose the £40 million in unspent support allocated to the Liverpool city region, which is now in tier 3, to support local businesses, but again today the Chancellor has refused even that modest request.

Those forced to self-isolate to stop the spread of the virus need the support to do so and not to have to choose between feeding their family and obeying the rules. Wirral Council, which has been at the forefront of the fight against the virus, has not been reimbursed for what this has cost and, like many other local authorities, it is teetering on the verge of bankruptcy.

So what do we need? We need an increase in generosity of the furlough-lite scheme. It has to pay more to those whose jobs are affected. We need wider eligibility; it has to go to businesses that are affected, not only those that close. We need to include the excluded, which means freelancers and the self-employed, and we need to pay adequate sick pay for those forced to isolate. If we do not do that, the virus will roar back, and the economic cost will, in the end, be far greater and the cost in lives will be unbearable.

Public Health Restrictions: Government Economic Support

Angela Eagle Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

I am grateful to my hon. Friend for his question; I think the Chancellor has demonstrated throughout the health pandemic that he has both kept an open mind and consulted widely, with the TUC, business leaders and many others. That is why for hospitality specifically we had a range of measures in the summer, with eat out to help out, the targeted VAT support and cash support measures, and the job support for staff coming back, where the Government helped with some of those labour costs. Of course the Chancellor will keep these things under review, but the key issue for all of us is to get the virus down, and that is the best way of helping our hospitality sector.

[Ms Angela Eagle (Wallasey) (Lab)]

Yesterday, my constituency of Wallasey, as part of the Liverpool city region, was mandated by the Government to go into tier 3 restrictions. Does the Chief Secretary agree that the £40 million of unallocated support that his Government gave to the city region at the start of the pandemic could now be used, given that we are in tier 3, to support local businesses that are in the worst form of lockdown?

[Steve Barclay]

We did address this issue; I recognise that many hon. Members in the House have raised it on behalf of those councils where the initial estimate was at odds with the actual number of grants issued, but for the same reasons I gave earlier I do not think that would be equitable. Where there are pressures with tier 3, as with the conversations that took place for example between the Secretary of State for Housing, Communities and Local Government and leaders in Merseyside, among others, over the weekend, it is right that the needs are addressed pertaining to tier 3, not that the underspend on funding that was allocated in a previous period is then used in that way. If the Government were to agree that, many hon. Members across the House would feel that that was unfair.

Areas with Additional Public Health Restrictions: Economic Support

Angela Eagle Excerpts

Tuesday 6th October 2020 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

I welcome the Minister’s agreeing with my right hon. Friend the Member for Knowsley (Sir George Howarth) to meet local MPs, local leaders and the Mayor to talk about what is happening in the Liverpool city region. The Minister will know that £7 million between nine different local authorities as extra money for the much more severe restrictions being imposed is not nearly enough, so will he promise to keep an open mind about the extra support we need in a region where 20% of our economy is the visitor offer, hospitality and tourism, and where 50,000 jobs and 4,000 businesses are at stake?

[Steve Barclay]

As I said to colleagues earlier, I am happy to meet Members of Parliament across the House, and I am happy to meet the hon. Lady, who brings considerable experience to these issues from her time in government. However, as I pointed out earlier, it is not the case that it is only £7 million of support. It is important to look at the wider package of support that has been offered, but of course we can discuss that in due course.

Oral Answers to Questions

Angela Eagle Excerpts

Tuesday 7th July 2020 Commons Chamber

[Aaron Bell (Newcastle-under-Lyme) (Con)]

What fiscal steps he is taking to protect jobs during the covid19 outbreak.

[Ms Angela Eagle (Wallasey) (Lab)]

What fiscal steps he is taking to tackle unemployment as a result of the covid-19 outbreak.

[Rosie Cooper (West Lancashire) (Lab)]

What fiscal steps he is taking to support people unable to return to work as covid-19 lockdown restrictions are eased.

--- Later in debate ---

[Rishi Sunak]

My hon. Friend is absolutely right. The importance of job matching is critical and the evidence shows us that it works. I know from my time as a Local Government Minister the innovative approach that Councillor Atkins and his team on the county council and the LEP have taken to various economic initiatives. I pay tribute to them for putting this in place with such speed.

[Ms Angela Eagle]

The aerospace sector has already said that 9,000 jobs will go in the UK. The north-west is going to be specifically badly affected if the Government just sit back and allow this export-strong, high-skilled, high-wage sector to be decimated. Germany has put a big package in place. America has put a big package in place. France has put a big package in place. So what is the Chancellor going to put in place to protect and guarantee the future of the aerospace sector in the long term?

[Rishi Sunak]

The interventions in France and Germany related to specific companies, so it obviously would not be appropriate for me to comment on those in this place at this time. The support put in place in the US was primarily to support domestic connectivity. This Government have done that by subsidising considerably our bus network and our rail network to make sure that intra-Union connectivity remains through this crisis.

Coronavirus: Job-Support Schemes

Angela Eagle Excerpts

Tuesday 7th July 2020 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

The coronavirus pandemic has ushered in an economic emergency of gargantuan proportions. The estimates show that £42 billion will be spent on the coronavirus job retention scheme and £10 billion on the self-employment income support scheme. These are very large numbers, but size is not everything, and questions need to be asked about the effectiveness of the packages the Chancellor has announced. Is this massive resource being spent in the most effective way? Is it being spent fairly? Is it helping those who need it most? Is it creating the optimal conditions for recovery when the pandemic finally recedes? The jury is still out on all those questions.

A lifeboat has been launched in the shape of the furlough scheme and the grants or loans made available as the pandemic took hold. It is a leaky and inadequate lifeboat that has prevented the economy going under completely, but it will all come to nothing unless a proper rescue operation is launched to bring the economy back to safety. The Chancellor must make certain that his economic response does not mirror the Prime Minister’s pre-lockdown dithering and organisational incompetence, which is likely to have cost tens of thousands of lives and exacerbated the economic damage wrought by the pandemic.

The Treasury Committee has published a report that deals with the gaps and unfairnesses in the Government’s schemes. We point out that over a million people have been arbitrarily excluded from the scope of various schemes, even though their livelihoods have been affected by the requirement to lock down and there is no reasonable excuse for leaving them out. As the Federation of Small Businesses pointed out, if those who pay themselves in dividends and who have been excluded from accessing support go out of business, they will take a great many employees on PAYE down with them.

We await the formal Treasury response to the Committee’s detailed points, but when questioned in this place, Ministers tend to boast about the size and cost of the schemes they have introduced without addressing the specific issues.

[Meg Hillier]

I want to go back to the point about people who had to use personal service company set-ups in order to get liability insurance. Does my hon. Friend agree that it is a crazy system that led to that behaviour, which in turn has led to people going without money?

[Ms Eagle]

I absolutely agree. This crisis has forced us to look at how our labour market works, and we need to come back to that very strongly indeed.



Tomorrow, I want to hear that the Chancellor is doing something to help the freelancers who power much of our cultural industry but who have thus far been excluded from the help available. I want to see him announce a strategic sectoral approach to job retention to ensure that the economy thrives. The OECD estimates that the UK could suffer the worst covid-19 related damage among the advanced economies, with a decline of 11% in national income and UK unemployment rising to 9% this year. Despite the labour market having been sheltered from a complete meltdown by the furlough scheme, there are ominous signs of a huge strain like a dam waiting to burst. The recent announcement of many thousands of job losses in retail, aviation and leisure could be just the tip of the iceberg if the Chancellor does not take decisive action.

The Government must now switch quickly to a more strategic and tailored response that will enable stabilisation and economic recovery. Certain sectors will continue to be affected because of social distancing rules, and they must be helped. Local authorities and schools, for whom the Chancellor promised he would do “whatever it takes” to fight the virus, should have their costs fully reimbursed. To date, they have received back only a third of what they have spent.

The Chancellor exhorting people to spend, spend, spend, as he did at the weekend, risks entrenching the old debt-fuelled consumer economy in place and squandering the chance to lay the foundations of greener, fairer, more sustainable future prosperity. The Prime Minister blaming everyone but himself, exhorting us to “build, build, build” and trumpeting a Roosevelt-like new deal while promising to spend 0.2% of UK GDP, whereas President Roosevelt spent 40% of US GDP, would be a farcical response to our predicament if we were not in such a perilous situation.

[Mr Baker]

I remind the hon. Lady that she stood at the Dispatch Box 10 years ago accusing us of being Hooverite in our liberalism. Although that was historically questionable, it is where she was 10 years ago. Surely she must feel that the references to Roosevelt are an improvement.

[Ms Eagle]

Clearly somebody in the Conservative party has moved on, but when we look at the difference between 0.2% of national GDP and 40% of national GDP, we can see that a few lessons are yet to be learned.

Coming back to a point made by my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the labour market is key. Many vulnerable people in the labour market have been left with nothing as a result of the effects of coronavirus. Many in the labour market have also been put at great risk of contracting the virus, and perhaps have to think about a choice between earning and being ill, which is why we need to look more closely at how our labour market is regulated—and crucially, at the 46% cut to the Health and Safety Executive, which enforces labour market rules. The Prime Minister exhorting us to “build, build, build” is all very well, but it would be a farcical response to our predicament if the country were not in such a perilous position; the comparison is ridiculous. The Chancellor and the Prime Minister need to drop the hype and begin to deliver. Our future economic prosperity depends on it.

--- Later in debate ---

[Jesse Norman]

I have not gone into the arrangements for pandemic that the Treasury had in 2016, at the time the hon. Lady mentions, so I cannot comment on that. What I can say is that when pandemic struck, the two schemes were put in place with astonishing speed and capability. I do not think that is contested in the Chamber; it is well understood.

The coronavirus job retention scheme was announced by the Chancellor on 20 March and opened for applications just one month to the day afterwards. Six days later, the Government announced the self-employment income support scheme, with a target of making the first payments by the middle of June. In fact, the online portal opened for applications on 13 May, weeks ahead of schedule, with the first grants being paid into bank accounts on 25 May and within six days of application thereafter. That was achieved with more than 80% of HMRC staff working from home. Silos disappeared and timelines were condensed to extraordinarily short lengths of time as officials from across Whitehall came together to solve the problems. In so doing, they set up a kind of exemplar of what a really effective 21st century civil service would look like. It is a model that we are looking at very closely in our thinking about how we might change the tax administration system to make it more resilient in response to the concerns.

The achievements I have outlined have been widely welcomed in this debate, and rightly so. There cannot be any Member who has not walked down their local high street in the past week or two and spoken to those at the shops that are reopening who have had the benefit of the furlough scheme, or to traders who have had the benefit of the self-employment scheme. I am massively proud—we should be proud as a House—of HMRC’s efforts to design and deliver the schemes so quickly and with such effect.

The CJRS—the furlough scheme—has helped 1.1 million employers throughout the United Kingdom to furlough 9.3 million jobs, while 2.6 million self-employed individuals have applied for grants worth more than £7.7 billion. As has been said often, I do not pretend today for one moment—I do not think any one of us does—that the schemes are a panacea. Right hon. and hon. Members have rightly highlighted instances of groups and individuals who are very regrettably and unfortunately not eligible under the scheme rules. It is important to say that under no circumstances and at no point have those people been in any way forgotten by the Government; we have listened carefully to Members, as well as to employers, and refined both schemes to include more people where possible. For example, those returning to work after periods of parental leave and reservists who return to their jobs after active service in the armed forces are now able to access the flexible version of the furlough scheme, and similar accommodations have been made with respect to the self-employment scheme.

Together, the measures I have outlined represent an economic intervention unmatched in recent history. Nevertheless, the practicalities are such that the Government have not—I recognise this—been able to support everyone in exactly the way they would want. If I may, I shall address some of the specific points raised in the debate in a moment, but first it is important to understand the principles that guided the Government’s response.

[Ms Angela Eagle]

It is not that we wish the Minister to support people in the way that they want. He has to recognise that there are 1 million people who have been given no support at all; we want some consideration for them. Their businesses and livelihoods have been affected because of Government decisions that—understandably, for health reasons—closed down the economy. Will he please address that?

[Jesse Norman]

I will be coming to some of the points that the hon. Member raises later in my remarks. We are focusing on the furlough scheme and the self-employment scheme, but of course these schemes have been a small percentage of the overall response, which has included a vast array: £300 billion of loans, tax deferrals, grants, reliefs and the rest of it, as well as support under universal credit and other forms of benefit. It has been a very, very comprehensive system of support, of which we can be proud.

Let me push on. I was talking about the principles involved. The scale and urgency of the crisis were such that the Government’s overwhelming and overriding motivation was to deliver the greatest help to the greatest number of people as quickly as possible. That was the driver behind the schemes. Both were designed to make use of existing processes and verifiable data precisely in order to make the implementation happen in the fastest possible time and to minimise the risk of fraud, error and delay. Any delay would have meant that millions of people who benefited from the schemes would not have received the support when they needed it most.

It has not been possible to extend the self-employment scheme to individuals who became self-employed after 2018-19, because although self-employed taxpayers can file returns for 2019-20, this would have created an opportunity for fraudulent operators and criminals to file fake returns. It does not take an enormous amount of mental mathematics to calculate that a relatively small percentage of additional fraud would equal quite a lot of additional schemes that would have to have been assessed and worked through the system. That is what makes it so difficult. As the House knows, these problems have been highlighted in testimony to the Treasury Committee. It is also important to be clear that these are just two measures within a much larger package of Government support.

I only have one minute left, so let me turn quickly to the points that have been raised. My right hon. Friend the Member for Central Devon raised the question of fairness to individuals. I understand his point. I think he is aware that the schemes are targeted at those who need them most, and the self-employment scheme is most reliant on people’s self-employment income. He has had an explanation of the 95% figure that we have used—that is, those who get more than half their income from self-employment and who could be eligible for the scheme. Of course, many of those people are also entitled to claim other benefits.

The hon. Member for Hackney South and Shoreditch (Meg Hillier) said that it cannot be beyond the wit of the Government to address these issues. Of course, it is true that people have found groups that have been left out, but I put it to her that this has been extraordinarily difficult. We have been able to make changes at the margins but not at the core, precisely in order to deliver the benefits we wanted.

Let me finally say, in response to my hon. Friend the Member for Wycombe, that the OBR has projected some £60 billion in total for the current schemes and £15 billion for supplementary estimates. That may be the order of magnitude that we are talking about. I wish that I could speak for longer.

Economic Outlook and Furlough Scheme Changes

Angela Eagle Excerpts

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

Nothing could silence the hon. Gentleman’s voice; I am glad to have been able to hear his question. I would be very happy to talk to him. I suspect that there are several hundred miles between us, but I will make sure that we find some way to talk to each other.

[Ms Angela Eagle (Wallasey) (Lab)]

I congratulate the Minister on getting through the entire UQ without making a single commitment, although he has made many observations. As a member of the Treasury Committee, I look forward to the Government’s formal response to our report on the 1 million people who are currently missing out on the Government’s schemes. Will he see if he can at least make a commitment before today’s UQ ends? What is he doing as a Treasury Minister to ensure that, as we move from the acute stage of the pandemic to furlough schemes beginning to end, the furlough scheme is not remembered as a waiting room for unemployment rather than the job saving scheme that it should have been?

[Jesse Norman]

The hon. Lady will recall that the topic of the UQ is the job retention scheme and the self-employment scheme, and their relation to the UK economy in the face of covid, and that is what I have focused on. Of course, as a former member of the Treasury Committee myself for five years, I will take its report very seriously, as she suggests. In many ways, it may well be that people will look back on the job retention scheme and conclude, as the shadow Chancellor has, not only that it was considerably better than any possible alternative or inaction, but that it saved an enormous number of jobs.

The Economy

Angela Eagle Excerpts

Monday 27th April 2020 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his thoughtful comments. I know he has put a lot of personal time and energy into thinking about these things, and I welcome his engagement with me. He makes very interesting suggestions. As the Prime Minister said this morning, there will be gradual refinements to the social and economic restrictions, and my hon. Friend is right to highlight that that is exactly how the process will work, whether that is the restrictions or, indeed, how we remove some of the economic interventions that we have put in place.

[Ms Angela Eagle (Wallasey) (Lab) [V]]

The whole House will welcome the Chancellor’s announcement of his micro-loans scheme—the bounce-back loans—that he just made in his statement, but will he admit that the CBILS loans that he announced are still proving slow, overly complex and bureaucratic? Will he look again to see what he can do to simplify that scheme so that more of the £330 billion of potential loans that he set out in his first announcements can actually get to where they need to be to save huge swathes of our economy?

[Rishi Sunak]

The hon. Member is absolutely right. I am striving to make the process as seamless and as quick as possible. We made some improvements a couple of weeks ago—removing guarantees and changing some things on the back end—which have already made a difference. More than 20,000 CBILS loans have now been issued and there are 40,000 applications that the banks are working through. The acceptance rate remains high at over 80%, but there are further tweaks that we have been putting in place over the past week. Information on that will be outlined later. It is largely technical, administrative and regulatory, but I believe those changes will continue to accelerate the pace of CBILS loans and, like the hon. Member, I think we all share that aspiration.

Economic Update

Angela Eagle Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

I appreciate the point my hon. Friend is making. The steps today on insurance are welcome, but he is right to identify that retrospectively changing the situation that insurers would have reserved against could have a very significant impact on their solvency, which would send a ripple effect throughout the insurance market. That is not something that any of us would want to see.

[Ms Angela Eagle (Wallasey) (Lab)]

The Chancellor must surely recognise that those on statutory sick pay are being asked to protect the rest of us, but take only £96 a week in income and live on that, and that those on universal credit, if they can access the system at all, will be asked to live on £74 a week. Millions of people are simply not eligible for either of those deeply flawed structures. He has to do something fast. He has to do it quickly. Instead of talking about the £1 billion he has already put in, will he now realise that he has to move fast to reassure people that if they do the right thing they will not suffer and that they will be able to put food on the table and maintain their housing and their children’s meals?

[Rishi Sunak]

We have provided half a billion pounds specifically to local authorities to provide extra support, particularly to help people with housing costs, notably council tax. That will make an enormous difference to people on the ground.

Tax Avoidance and Evasion

Angela Eagle Excerpts

Tuesday 25th February 2020 Commons Chamber

[John McDonnell]

They pay that much because they earn so much more than everybody else, but the other issue, and it relates—[Interruption.] Let me finish. We have this debate time and again. The hon. Gentleman is referring to income tax, but when we take into account overall taxation we see that the poorest-paid in our country are paying about 40% of their income while the richest are paying around 34% of their income. It is the poorest who are hit hardest, it is the poorest who have shouldered the burden of austerity, and it is the poorest whose life expectancies are being reduced at the moment. That cannot be right; surely to God no one in this House was elected to ensure that life expectancy for the poorest stagnates and for some goes backwards.

[Ms Angela Eagle (Wallasey) (Lab)]

Does my right hon. Friend agree that the other side of this calculation is that those who are best able to pay ought to pay their fair share of tax, and what we have seen over the last few years is the creation and mass-marketing of tax evasion schemes? Those now exist like package holidays—they are package schemes. Does he also agree that the Treasury has been very remiss in not cracking down on this awful emergence of tax schemes that are packaged to make it much easier for people to avoid paying their fair share?

[John McDonnell]

I want to pay tribute to a number of my colleagues in this House who have consistently raised this issue, and my hon. Friend is one of them. When we had the debate very early on—in, I think, 2012 or 2013—a number of hon. Members, including my hon. Friend, started describing what was taking place as tax avoidance on an industrial scale. That is exactly what has happened, and it has not got better; it has got worse consistently.

At the moment, Her Majesty’s Revenue and Customs is saying that the tax gap is about £35 billion, and it defines that as the difference between its estimate of the tax that should be paid and what is paid. But we know, and HMRC accepts this, that that does not include many of the abuses of corporate profit shifting, and HMRC acknowledges

“many sources of uncertainty and potential error”

in its own calculations. So other experts have suggested—this is the point my hon. Friend is making—that the tax gap could be as high as £90 billion overall. So let us look at who we know is not paying their taxes.