Lockdown: Economic Support

Mel Stride Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Mr Speaker]

Let us enter Central Devon with the Chair of the Select Committee on the Treasury, Mel Stride.

[Mel Stride (Central Devon) (Con) [V]]

I broadly welcome the new measures that the Government have brought forward to support jobs and, in particular, the increase in support for the self-employed from 40% to 80% under the self-employment income support scheme arrangements. However, as my right hon. Friend will know, the Treasury Committee produced a report earlier this year in which we identified more than a million individuals—the self-employed in particular—who were missing out on support. Will he update the House on whether, under the new measures, any of those identified in the report will receive support where they were not before? If the answer is no, why is that the case?

[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.

Covid-19: Economy Update

Mel Stride Excerpts

Thursday 22nd October 2020 Commons Chamber

[Mel Stride (Central Devon) (Con) [V]]

I welcome my right hon. Friend’s statement. Once again, he has listened to businesses. When it comes to lockdowns—I have to say that I agree with the remarks he has just made about circuit breakers—may I draw his attention to the minutes of the Scientific Advisory Group for Emergencies meeting on 21 September, which state:

“Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment. This work is underway under the auspices of the Chief Economist.”?

Will my right hon. Friend update the House on the progress that has been made by the chief economist? Does my right hon. Friend agree that, to ensure a balanced public debate, the chief economist or a similar economic expert should join the epidemiologists for No. 10 covid press briefings?

[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.

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 20th October 2020 Commons Chamber

[Rishi Sunak]

[Mel Stride (Central Devon) (Con) [V]]

[Rishi Sunak]

Public Health Restrictions: Government Economic Support

Mel Stride Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

indicated assent.

[Mel Stride (Central Devon) (Con)]

My right hon. Friend and the Chancellor of the Exchequer have done a great deal to support the economy, but there has to be a careful balance struck between protecting against the virus and avoiding further economic destruction. With that in mind, what scientific evidence has the Treasury received that closing pubs at 10 pm gets that balance right?

[Steve Barclay]

We have to balance the evidence that the Government receive from a range of quarters. My right hon. Friend will recall that when the initial advice from the Scientific Advisory Group for Emergencies was put forward, the Government came forward with a range of measures, such as the rule of six and the curfew. Indeed, if we look at the projections that were made at that time, we see that we could potentially have had 49,000 or so daily cases by 14 October when in actual fact the figure on that date was 12,872. That indicates the fact that the package of measures put in place by the Prime Minister and the Chancellor of the Exchequer have had an influence. However, listening to the SAGE advice, it is recognised that we need to go further and that is why the tiered approach has been set out.

Areas with Additional Public Health Restrictions: Economic Support

Mel Stride Excerpts

Tuesday 6th October 2020 Commons Chamber

[Steve Barclay]

The shadow Chancellor almost implies that the resurgence of the virus is unique to the United Kingdom, yet anyone who looks across the continent will see that many other countries, as we come out of the summer period, are seeing exactly the same trend and are dealing with it in in many of the same ways as we are in the United Kingdom.

The hon. Lady says that support has not been offered to those suffering from economic harm, but that ignores, for example, the announcement that I made in the Chamber some weeks ago about the £1,500 of support for businesses for every three weeks of closure as the result of a local lockdown—[Interruption.] Hon. Members should let me answer, rather than chuntering from a sedentary position.

The hon. Lady also ignores the fact that my right hon. Friend the Chancellor has extended many of the measures that we introduced in our initial response, including the package of loans, the tax deferrals and pay as you grow. Those are universal offers to support businesses, irrespective of whether they are in areas of acute lockdown or otherwise.

As I said at the start, and as my right hon. Friend the Chancellor said yesterday, we will keep listening, and we will keep striving to be creative in response to the challenges that we face. Where we can, he will act. That shows our willingness to adapt. The package of measures that my right hon. Friend the Chancellor brought to the Chamber just a few days ago, with the winter plan, illustrates that willingness to listen, to evolve and to respond to the virus, as the economic needs of the country dictate.

[Mel Stride (Central Devon) (Con) [V]]

Local restrictions are inevitably impairing many thousands of businesses in those areas, but some businesses are not just being impaired: because of the regulations, they are simply unable to trade. I am thinking about many companies in the hospitality sector—events companies, hotels, nightclubs and many more. Would my right hon. Friend recognise that and come forward with a specific set of support packages for those businesses, which the regulations basically stop dead in their tracks? In that way, the many thousands of jobs in those businesses, which are otherwise entirely viable, can be saved.

The Economy

Mel Stride Excerpts

Thursday 24th September 2020 Commons Chamber

[Rishi Sunak]

I thank the hon. Lady for her comments. On the question of continued support for jobs, however, I had hoped that she would have welcomed strongly today’s measures, if for no other reason than that she has previously asked for something similar. However, her position on this matter has been somewhat changeable. At different points in the last few weeks and months, she has said that furlough should not go on for ever, and then changed her mind and said that we should extend it. Then she changed her mind and said it should be replaced, and then only yesterday the Leader of the Opposition said it should be extended again. That is not the kind of certainty that British businesses or British workers need.

To address the specific questions, this scheme absolutely does incentivise shorter time working. The company will pay its workers for the time that they are in work, and the Government and the employer jointly will subsidise the time the worker is not working. The conditions will be set out in guidance, which will be published shortly, and then over the next few weeks the further details will be worked through with businesses and unions, as we did with the furlough scheme.

I can reassure the hon. Lady that the new scheme does indeed have the conditionality that is appropriate for this stage of our response. Notably, this scheme will be available only for larger companies that are seeing a decline in their revenues as a result of coronavirus, ensuring that our support is targeted where it is most needed. Similarly, there will be restrictions on larger companies in capital distributions to shareholders while they are in receipt of money for their workers under this scheme. Indeed, they will not be able to give redundancy notices to those workers who are on this scheme throughout its duration.

We have increased training both for post-16 at the Budget and, indeed, in the recent plan for jobs, providing increased access for school leavers to level 2 qualifications across the board. Notably, one of the hallmarks of our skills system is our successful apprenticeship programme. What we announced in July was a significant increase in the incentive payment to businesses for taking on a new apprentice: a £2,000 cash incentive to businesses to take on an apprentice and provide that valuable in-work training that we know makes such a difference to young people’s futures. So we are committed to providing especially our young people with the opportunities that they need to succeed in the future.

The hon. Lady talked about jobs. In July, we outlined a £30 billion plan for jobs—to support, create and protect jobs across every part of our United Kingdom. Chief among the initiatives was the kickstart scheme, where right now employers—small, medium-sized and large—are rushing to put in applications to take on a young kickstarter later this autumn, to provide them with the opportunities that they need at an incredibly difficult time. I can assure this House and the country that my No. 1 economic priority is to protect people’s jobs, and that is what this Government will continue to do.

In conclusion, the Opposition wanted the furlough extended, but they never said for how long. Then they wanted the furlough replaced, but they would not say what with. Then they wanted the furlough targeted, but they would not say on whom. I do stand ready to work with the hon. Lady, if she knew exactly what she wanted. Today, the Government stand with the British people and British business, with the CBI, the British Chambers of Commerce and the Trades Union Congress, in bringing much-needed support to the economy. Yesterday, the Leader of the Opposition called for a plan B for the economy. The Labour party does not even have a plan A.

[Mel Stride (Central Devon) (Con)]

The devil, of course, will be in the detail, but from what I have heard, I broadly and warmly welcome this statement. I am encouraged by the job support scheme and the fact that it is targeted, for which I and my Committee have been calling for some time. I am encouraged by the announcements on loans and the pay-as-you-grow scheme, particularly to help small and medium-sized enterprises, and I am encouraged that the self-employed will have their scheme extended.

However, my right hon. Friend will know that there was considerable concern that many self-employed people fell through the gaps of the support provided. Will he say something about whether some of those gaps will be ameliorated or ironed out as a consequence of the new measures, and will he meet me in fairly short order to discuss the options that might be available?

[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.

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 15th September 2020 Commons Chamber

[Rishi Sunak]

Many self-employed people have received the second of the self-employment income support grants—almost 3 million people have now received support through that scheme—but the hon. and learned Lady is right that the best way to provide support for people in that industry is slowly and safely to reopen those bits of our economy. My colleague the Secretary of State for Digital, Culture, Media and Sport Secretary of State is engaged with that industry to start piloting the return of business conferences and events. The situation remains under review.

[Mel Stride (Central Devon) (Con) [V]]

My right hon. Friend has done a tremendous amount to support jobs in our country, but does he agree that many thousands, perhaps even hundreds of thousands, of jobs are going to be viable after covid is dealt with but will not make it unless they are provided with further targeted support after the end of October?

[Rishi Sunak]

As ever, I am grateful for the advice from my right hon. Friend. He is right that businesses do need support, which is why many of the interventions that we have put in place—for example, the business rates holidays and, indeed, our support for the economy and jobs through initiatives such as our stamp duty cut to catalyse the housing market—last through to next year. I hope he will be reassured that throughout this crisis I have not hesitated to act in creative and effective ways to support jobs and employment, and I will continue to do so.

Economic Update

Mel Stride Excerpts

Wednesday 8th July 2020 Commons Chamber

[Mel Stride (Central Devon) (Con)]

My right hon. Friend’s plan for jobs is characteristically thoughtful, creative and bold, and I firmly welcome it. He has rightly said that we look to businesses to grow the jobs of the future, yet we know that many hundreds of thousands of small and medium-sized enterprises will emerge from this crisis saddled with significant amounts of corporate debt, and we will look to them at that moment to be investing in jobs and growth, rather than being concerned about de-leveraging and shoring up their balance sheets. So may I ask my right hon. Friend whether he has given this particular issue specific thought, and if he has, what solutions he might have to bring to this House?

[Rishi Sunak]

I very much welcome my right hon. Friend’s support, and thank him for that. I also thank him for the advice he has provided to me over the past few weeks and months. He is right to highlight the issue of leverage; it was good that, on coming into this crisis, levels of corporate indebtedness in the UK were the lowest for around a decade and ranked very favourably when compared with most OECD countries, but he is right that we want to make sure that that is not a drag on our recovery. I am currently looking at proposals from a range of people, including my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami), TheCityUK and others, and I look forward to discussing those with my right hon. Friend.

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 7th July 2020 Commons Chamber

[Mr Speaker]

I call the Chairman of the Select Committee, Mel Stride.

[Mel Stride (Central Devon) (Con) [V]]

Guidance has recently appeared on Her Majesty’s Revenue and Customs website that suggests that those who take covid-19 tests, as provided by their employer, will have to treat the cost of those tests as a taxable benefit in kind, which is very unfortunate, particularly in respect of those frontline workers who may be involved. Will the Chancellor look into this matter, please, as a matter of urgency?

[Rishi Sunak]

I am delighted that my right hon. Friend has raised this issue with me, and of course we will look into it very quickly.

Coronavirus: Job-Support Schemes

Mel Stride Excerpts

Tuesday 7th July 2020 Commons Chamber

[Mel Stride (Central Devon) (Con)]

May I begin by thanking the Backbench Business Committee for allocating time for this important debate? I say that it is an important debate because, of course, Her Majesty’s Revenue and Customs is seeking an additional £52 billion as part of the main estimates, those being attributable to the principal job support measures that the Government have brought forward—about £42 billion for the furlough scheme and a further £10 billion for the self-employed income support scheme. Those are vast sums. Even as a proportion of the entire amount that the Government are spending to support businesses and individuals and the economy during this period, those are very sizeable sums indeed. As we know, the amount that has gone into supporting those on furlough is around the equivalent, on an annualised basis, of the day-to-day spending of our national health service.

I think that, in the round, the Chancellor should be applauded for having come out with these measures to support the economy, individuals and businesses, and for both the scale of what he and the Government have delivered and the pace with which it has been delivered. It is important for me to express on the record my satisfaction with both those points.

However, when we come forward with measures of that scale and at that pace, it is almost inevitable that there will be hard edges to policy and, indeed, gaps through which people fall. There are people whom one would normally want to have support who have not yet received that support. That has been the focus of the considerable amount of work that the Treasury Committee has undertaken, with 12 inquiry sessions and a first call for evidence that received a near-record 16,000 responses from self-employed people and those working in businesses up and down the land who are very concerned about these gaps in provision.

I shall focus briefly on two groups in particular. The first is those who are self-employed and choose to work through a limited liability company, paying themselves both by way of pay-as-you-earn income and through dividends received through that company. The problem arises when it comes to calculating the furlough entitlement for those individuals: it is based solely on their PAYE income and does not take into account in any way the income, albeit self-employment income, that they receive by way of dividend.

Of course, when we had the head of HMRC before our Committee, we asked him about that. I have to say that Jim Harra is a very capable head of HMRC; I worked with Jim when I had strategic responsibility for HMRC as a Minister at the Treasury some time ago, and he is a very capable man. However, he did not give the answer that the Committee wanted to hear on that occasion. He did not allude to the problem being anything to do with the expense involved; he talked about the administrative difficulties of differentiating between income received by self-employed people by way of dividend and other income received by way of dividend, perhaps in respect of passive investments, for example.

I recognise that there is a complication there. However, the question has to be: is it an insurmountable complication? Our Committee’s investigations suggest that it is not. HMRC could adopt an approach of basically paying out on the furlough scheme, having a clawback arrangement in place in the event that mistakes are made, and perhaps having a penalty regime alongside that, first to discourage erroneous claims and secondly to help fund the activity involved in policing those arrangements.

The reality is that we estimate that there are some 700,000 people in that situation who, for the last four months, have not had the support, or the full level of support, that many millions of others up and down the country have received. That cannot be right. It cannot be right because the Government, when they set out their strategy to resolve and tackle the crisis, stated that right at the heart of their mission would be fairness towards individuals and groups. I do not believe that that has been demonstrated in the case of the 700,000 individuals who are not getting the support that they should be.

The second group are the new starters: those who took up employment typically around March this year. There was originally a deadline or cut-off point of 28 February for the receipt of furlough—people had to have been employed prior to that date. That was then shifted, for which the Committee was duly grateful, to 19 March. Yet there will still be many individuals who joined businesses before 19 March but, because there was not an electronic communication regarding that employment between the employer and HMRC prior to 19 March, they do not qualify for furlough support. The Committee believes the Government should look more closely at that. Our recommendation in that respect has been to push the date back to the end of March.

There are a number of other categories of employed and self-employed, such as freelancers, those on short-term contracts and many others, who are not receiving the support we believe they should be entitled to. If we total all of them up, our estimate is that certainly more than 1 million people are falling through the gaps. There are others who estimate that figure to be nearer 2 million or 3 million people.

[Steve Brine (Winchester) (Con)]

As ever, I am listening very carefully to my right hon. Friend. I have followed the work of his Committee and the very sound things he has said on this matter. He alluded to this, but the heart of this issue, whether it relates to people who are new to self-employment, new to employment or take the majority of their employment through dividends from limited companies, is that we made the bad the enemy of the good. The vast majority in this space who missed out on help were not trying anything on; they were just doing their thing as entrepreneurs in the British economy and were then left out. What we should have done was get help to them to do whatever it takes. HMRC, as we both know, is not averse to taking back what it thinks has been wrongly taken. We really should have got help out there and then claimed it back if needed. Does he agree that the two schemes fell down on the universality of doing whatever it takes?

[Mel Stride]

I thank my hon. Friend for his intervention and I think he is entirely right. It is simply the case that those who choose to take their income through limited companies by way of dividend are operating entirely within the rules. I do not think there is anybody, HMRC included, who would dispute that, and that lies at the heart of why they should be treated fairly.

Perhaps I could just address two further points in relation to the Government support schemes and ask the Minister if he could comment on them in his wind-up. The first relates to lockdowns. One has already occurred in Leicester, but there may be further lockdowns, unfortunately, across the country. They will be localised, and it is very sensible that they should occur. Undoubtedly, however, they will impose very considerable further economic and social hardship on communities. I have written to my right hon. Friend the Chancellor to ask him what measures he may be considering bringing forward to provide further assistance to those communities in those circumstances. It occurs to me, for example, that the Minister might like to comment on the specific suggestion that businesses in such an area might have more flexible access to the furloughing of staff and be freed from some of the current restrictions in that respect. I would be interested in my right hon. Friend the Financial Secretary’s comments on that.

Secondly, in Treasury questions this morning a number of Members asked whether there would be some kind of targeted support when the wholesale nature of the support schemes ends at the end of October. I think the Chancellor is signalling that he is quite resistant to that. I would want to push back on that and say that we should keep our powder dry and wait and see. The Chancellor rightly said that people talk about sectors but often do not explain exactly which sectors. Part of the reason for that is that it is not clear at this stage, because things are unfolding in such an uncertain manner and it is not absolutely clear where the different parts of the economy will be in autumn. However, I think it only prudent that the Treasury keeps a very close eye on the sectors that are still damaged and inhibited as a result of social distancing, but, critically, still have the ability to grow and thrive once we come through the crisis.

That is the kind of business where I think some targeting of these schemes would be appropriate.

I notice from the clock that I have reached 10 minutes, Mr Deputy Speaker, so in line with your earlier exhortation, I will conclude. I thank the Backbench Business Committee for giving us this opportunity. I ask the Minister please to look closely at the gaps that the Committee has identified. Finally, I wish the Treasury well in the enormously important and difficult decisions that it will have to take in the weeks and months that follow.

--- Later in debate ---

[Mr Steve Baker (Wycombe) (Con)]

I begin by referring Members to my declared shareholding in Glint Pay. I thank HMRC for what it has done to put these schemes in place. It is the most extraordinary achievement that it has managed to put in place the coronavirus job retention scheme and the self-employment income support scheme. Normally, such things would take months and years and often be marred by IT failures and delays, and yet HMRC staff have successfully delivered this. I would far rather that they had successfully delivered than failed and left everyone without support. It is the most tremendous achievement, and the staff involved deserve our praise for what they have done, but I think we can see why it normally takes months and possibly years to deliver such schemes, because that time is required to deal with what have become hard edges.

Before I go any further, I would like to put into context the scale of the spending that we are talking about. If we look at page 355 of the estimates, there is £52 billion listed for covid-19. When I look up and down the detailed entries for the Department for Work and Pensions, I can see only one sum that is higher than the covid provisions for HMRC. Rounding to the nearest billion, the figures listed are £33 billion for universal credit inside the welfare cap, £13 billion for personal independence payments, £17 billion for housing benefit inside the welfare cap, just £5 billion for universal credit outside the welfare cap and £102 billion for the state pension outside the welfare cap. To see £52 billion appear in the estimates for HMRC is quite extraordinary, and I will return to that figure in my concluding remarks.

[Mel Stride]

My hon. Friend is making an extremely important point. These are just the main estimates, not the supplementary estimates, and the schemes have been extended and modified since those figures were put together. Does he agree that it would be useful to hear from the Minister what additional funds might be sought through the supplementary estimates?

[Mr Baker]

Yes. I hope that the Minister will give us a detailed explanation of how these figures break down, because the figure to which I just referred is different from the one on the Order Paper. I refer Members to page 357 for the resource to cash reconciliation, which I am sure my right hon. Friend will be fully able to break down in detail if he wishes to.

I want to come on to some of the things that the Chair of the Public Accounts Committee said. In my constituency, there are plenty of people who, in one way or another, work in the arts and are in quite desperate straits. To reinforce her point about tronc, it has been a real disappointment to me that we have not dealt with the issue of people in the hospitality sector receiving perhaps half their income through tips, for which HMRC has PAYE information. I will never forget one particular email from a new father who was shocked to discover that he would be not on 80% of his normal pay but 40%. That is a dramatic difference, and it is because HMRC and the Government have not taken into account tronc payments, which they should. The freelancers issue is important and profound. On dividends and directors, we should recognise that sometimes we are talking about make-up artists, for example, who are paid through dividends.

--- Later in debate ---

[Mel Stride]

I will be brief, Madam Deputy Speaker, because I realise that there is another debate to follow. I think that we largely agree across the House about what is working and the fact that the Government have come out with a major programme at considerable pace, which has been laudable. However, that is not the same as saying that everything is perfect or that it cannot be fixed. It seems to me that the Government and the Chancellor have in the past taken an iterative approach to some of these schemes, as the Minister has just been setting out, and our question will be: why can he not take an iterative approach to some of the gaps?

When the head of HMRC appeared before the Treasury Committee, he used an expression to the effect that HMRC has discovered in this process of rolling out these programmes that it has been capable of doing things that it did not think it was capable of doing. I say to HMRC and the Government: let us have that same approach adopted now in respect of the gaps, and let us look after and support those million-plus hard-working people up and down the country who are worthy of it.

Question deferred until Thursday 9 July at Five o’clock (Standing Order No. 54).