(4 years ago)
Commons ChamberI am pleased that the hon. Gentleman mentions that situation, because it has been referred to by those who favoured the Government’s approach previously. However, I gently state to him that if he is referring in particular to provisions against tax avoidance—the example of a general anti-avoidance rule—then, sadly, I believe he is mistaken. In that case, that commitment and the ability to apply such rules was actually a fundamental principle agreed to by this country as part of a multilateral agreement that it concluded with the OECD, so I fear that that example is not as telling as he may wish it to be.
With just three weeks to go until the end of the transition period, the Government published late yesterday afternoon the 116-page Bill that we are discussing now, setting out detailed new rules for tax and customs duties. Members of this House have been given less than 24 hours to scrutinise a major piece of post-Brexit legislation that will impact businesses and individuals across the country, especially in Northern Ireland. Many of the clauses in the Bill, particularly those covering customs and excise duties, require the Treasury to make regulations that will set out the actual detail of its proposals at a later date, so even with the publication of the Bill, businesses and individuals still do not have the information they need to prepare for the end of the transition period.
Earlier today, the Chancellor of the Duchy of Lancaster said there would be “further clarity” forthcoming on these matters, but again without saying when. In fact, the Minister talked a few moments ago about those details coming in due course. His letter to Members spoke about the fact that there would be information on this later; “in the coming days” was the formulation at that time. How can he really expect businesses to plan on that basis—on the never-never up to 1 January?
This last-minute approach was not necessary. It is no use pointing to the complexity of the ongoing negotiations. We know that this Bill could have been published a long time ago because the Government have been floating a Finance Bill for months, so why yet another last- minute scramble? My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) set it out very clearly: because the Conservatives had a not-so-cunning plan to use this Bill as negotiations reached a critical point by threatening to override the withdrawal agreement. At a time when we are seeking to negotiate new trading relationships across the international community, and when the Government are trying to project an image of global Britain to the world, this tactic certainly sent a clear message, albeit not the message the Government intended.
It is welcome that the Government finally saw sense yesterday, although we have already seen damage being done. Both in relation to the provisions in the Bill and more generally, the time is running out to ready our country for the challenges ahead. The Public Accounts Committee was clear last week that:
“Government is not doing enough to ensure businesses and citizens will be ready for the end of the transition period”.
It expressed concern at reports from industry bodies that the Government had not provided the key information needed for businesses to prepare. Indeed, the Committee indicated that more than a third of small and medium-sized enterprises still believed that the transition period would be extended.
The Cabinet Office has admitted that it is well behind in recruiting the customs agents desperately needed for 1 January, despite more than £80 million having been spent so far. Yet again, earlier today, the Chancellor of the Duchy of Lancaster refused to specify exactly how many additional customs agents had been recruited. Overall, £4.4 billion has been spent by the Government on preparations for Brexit and the end of the transition period, yet we are still not ready.
I am terribly grateful to the hon. Lady for giving way. She has criticised the Government for spending £80 million in support of traders and a facilitated approach to the border. Could she tell us whether she thinks that number is too large or too small?
With enormous respect to the Minister, the problem with his Government’s approach is the fact that they do not indicate what they have got with that spending. As I said, £4.4 billion has been spent on preparedness for Brexit and for the end of the transition period, and the £80 million that he refers to, but there is no indication from the Government of how many additional customs officers we have received as a result of that spending. I hoped that he was intervening on me to provide an indication of the additional workforce that has been recruited. It is a matter of regret that he was unable to do so.
(4 years, 6 months ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
(Urgent Question): To ask the Chancellor of the Exchequer, if he will make a statement on the economic outlook for the UK and the Government’s strategy to protect jobs and the economy in light of upcoming changes to the furlough scheme.
Before I start, may I join with all the words that have been said in praise of Jo Cox during the proceedings so far? I know that many more such words will be said today. One thing that colleagues may not know, amid all the many things that they have been told about her, is that she was very fond of visiting Symonds Yat in my constituency in Herefordshire. I look forward to the day when many other people can do that, following lockdown.
From the onset of this pandemic, the Government’s top priority has been to protect the NHS and to save lives, but we have also made it clear that we will do whatever is needed to support people, jobs and businesses through the present period of disruption, and that is what we have done. On Friday, the Office for National Statistics published its first estimate of April GDP and showed the economy contracting sharply by a record 20.4% on the month. It is clear that restrictions introduced during the lockdown, while necessary, have had a severe impact on output.
However, it is important to note that the OECD, the Office for Budget Responsibility and other external forecasters have all highlighted that the cost to the economy would have been significantly higher were it not for the swift and decisive action that the Government have taken. Measures such as the coronavirus job retention scheme—the CJRS—which has protected almost 9 million jobs and more than 1 million businesses, have helped to limit the adverse impact of the crisis. It is also important to note that the OECD forecast the UK to have the strongest recovery of all the large countries that it looked at, with an unemployment rate projected to be lower than that in France and Italy by the end of 2021.
As we are reopening the economy, the Government are supporting putting people back into work. Last month, my right hon. Friend the Chancellor announced that the CJRS would be extended for four months, until the end of October. From July to October, employers currently using the scheme will be able to bring furloughed employees back part-time. That will ensure that the CJRS will continue to support all firms so that no employer faces a cliff edge.
This remains a very uncertain and worrying time for businesses and employees alike. The Government have set out separately the five principles that must be satisfied before we make further changes to the lockdown rules, which we based on advice received from Scientific Advisory Group for Emergencies. However, I can assure the House that the thoughts, energies and resources of the Government are focused increasingly on planning for the recovery. We will develop new measures to grow our economy, to back businesses and to boost skills. I am confident that the United Kingdom can continue to thrive in a post-covid world.
The OECD’s global outlook suggested that the reduction in GDP in the UK due to the current hit of coronavirus will have been the largest out of all developed economies. The enormity of the economic impact appears confirmed by the claimant count and other unemployment data out today. It seems that the slow and confused health response is being followed by a slow and confused response to saving jobs, despite the huge long-term costs of unemployment. Labour has called for an exit strategy, but what we seem to have is an exit without a strategy, including on jobs.
Will the Treasury change its one-size-fits-all approach to the furlough and self-employed schemes, which risks additional waves of unemployment? Will it act to encourage young people to stay in education and training, and out of unemployment? Will it build on previous schemes such as the future jobs fund to support the young unemployed, and provide tailored help for other hard-hit groups such as older workers?
Although more support for apprenticeships is desperately needed, it will not be enough. Will the Treasury act now to create the extra support that cannot currently be delivered by Department for Work and Pensions staff, who are occupied with huge numbers of extra claims? Will the Government catch up with other countries that have already announced their stimulus packages, given that many employers are deciding now on whether to retain staff? Will they apply conditions to Government investment to include requirements to promote upskilling and re-employment? Above all, rather than a limited Budget statement in July, will the Government set out the back-to-work Budget that we need, with a focus on jobs, jobs, jobs?
I thank the hon. Lady for her questions and comments. Of course, the issues that she highlights are of great importance and receive an enormous amount of attention in the Government and in the Treasury, but I am a little surprised by some of the things that she said. I remind her that the OECD report, in addition to forecasting the strongest recovery, also highlighted the quick and comprehensive response that the Government put in place to deal with covid. It also noted the relative robustness of the UK’s public finances relative to those of other countries. Colleagues are entitled to decide whether they accept what the OECD says, but they cannot discount the bits they do not like and accept the bits that they do.
The hon. Lady refers to the Government’s response as “slow and confused”, but I find that very odd. She said to the CBI in April that “this scheme was about preventing mass unemployment”, and “undoubtedly it has prevented a worse situation, there’s no question about that”. She congratulated the Government, business and trade unions, and said that we saw with the job retention scheme “an excellent example of tripartite working”. I think she is right about that, but I do not think she can take the line she takes now and disavow those other things that she said, when Labour was being a bit more bipartisan than it is at the moment, in praise of the Government’s schemes.
Finally, the hon. Lady talks about the Government adopting a one-size-fits-all approach, but I would remind her of what she said in The Guardian on 20 May 2020:
“A more differentiated approach”—
that is, not a one-size-fits-all approach—
“would, admittedly, pose challenges for the government. Hard choices would need to be made, including how to deal with difficult boundary issues”.
She is right. It is also true that the Government have adopted a more differentiated approach than she gives us credit for, as witness all the work we have done with the hospitality and leisure industries.
So I am a little confused, but I do think it is important to focus on the positive achievements of the job retention scheme and the self-employment scheme, which, as the hon. Lady rightly notes, have prevented a much worse alternative and have been brought into place with great speed and ability by Her Majesty’s Revenue and Customs.
(4 years, 9 months ago)
General CommitteesI thank the shadow Minister for her remarks. She raised a range of issues, and touched first on what she described as lack of targeting. Of course it is the nature of the legislation that it is universal in its applicability. It is not designed to be a targeted benefit, and that is not its function. Its job is to improve the national insurance situation of 31 million people, which it does. The question of targeting is better addressed to many other aspects; it is not actually relevant to national insurance contributions, which for years have been legislated for on a universal basis.
I do not think that the hon. Lady is correct that this change is regressive in the way that it will operate. It is certainly not a tax cut for higher earners. All employees earning above £9,500 will benefit by the same amount, and some 1.1 million people will no longer pay NICs as a result. Those are important properties.
I am grateful to the Minister for his generosity in giving way. I do not believe that I used the word “regressive”. I made clear that the impact on those at the higher level of the income distribution will be larger, in terms of the absolute amount that they will not pay, compared with those at the bottom of the income distribution. Surely he is not contesting that.
If we look in full at the 31 million people affected, we will see that those in employment and earning above £9,500 will receive the same amount. The hon. Lady rightly mentions universal credit, and she understands that its effect is to smooth, via tapering, various cliff edges. That is a helpful and good property—I am sure she does not regret it—and it interacts with this measure. The broad picture, however, is the one I describe.
As the hon. Lady has acknowledged, the measure has elements of a contributory scheme, so it will have effects on people who do not have a full contributions record. On the Government’s future ambitions, she will understand that a statutory instrument debate is not the place to unveil such a strategy, and certainly not in the lee of a Budget two days away. It is the Government’s ambition to increase the threshold to £12,500, and decisions will be taken at future fiscal events. Increasing the NICs threshold to £9,500 this year is a first step towards that ambition. The hon. Lady also mentioned additional measures and statutory sick pay. It would be foolish in the extreme for me to comment on that matter two days before a fiscal event, and I therefore think we should leave it for a future discussion in the House.
Question put and agreed to.