Rishi Sunak
Main Page: Rishi Sunak (Conservative - Richmond and Northallerton)Department Debates - View all Rishi Sunak's debates with the HM Treasury
(3 years, 11 months ago)
Commons ChamberWe have provided unprecedented support worth more than £190 billion to protect public health, businesses and jobs, and the Government remain committed to supporting the economy throughout this crisis. In July, we published our plan for jobs, which announced further support for the economy, with initiatives such as eat out to help out, the £2 billion kickstart scheme and the £9 billion job retention bonus, all of which aim to support, create and protect jobs.
I hear what the Chancellor says, but emergency food parcels for children are up 107% this year and the Trussell Trust now expects to distribute 300,000 more than expected in the fourth quarter. Given that there is a hard Tory Brexit on the horizon and the end to the furlough scheme will certainly push more people into poverty, will the Chancellor do the right thing, adhere to his moral duty and make the £20-a-week increase to universal credit permanent?
Throughout this crisis we have endeavoured to make sure that the most vulnerable in our society get the help that they deserve, which is why results published in July showed that our interventions have meant that those on the lowest incomes have received the most support, through the temporary increase to universal credit, the hardship fund delivered through local councils and, indeed, increases to the local housing allowance to help people with their rental payments.
The events and conferences industry was the first to be affected by lockdown and will be the last to see demand return. Many freelancers, such as my constituent Karen Colvin, have not benefited from support in the same way as other workers. Does the Chancellor have anything new to offer to people such as her?
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.
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?
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.
Many employees, self-employed people and freelancers in sectors such as hospitality, aviation, tourism, showpeople and the arts cannot go back to normal because of the public health measures brought in by the Chancellor’s Government, so will he examine the calls by the Treasury Committee to consider a targeted extension of support for those sectors? If not, why?
The hon. Lady mentions hospitality and tourism, which is an industry disproportionately represented in Scotland. That is why the Government took steps in the summer to support the industry, with a temporary VAT reduction from 20% to 5% and, indeed, the eat out to help out initiative, both of which were targeted at helping to protect the 2 million jobs and 200,000 businesses engaged in the industry.
That is woefully inadequate, as we head into the winter, for many of these industries that have already suffered with a low income. The Chancellor said that he would do “whatever it takes” and that
“if the situation changed”,
he
“would not hesitate to take further action.”
Those excluded from support schemes, the 700,000 made redundant since March and those losing their jobs because of the premature ending of the furlough scheme want to know whether the Chancellor will be true to that commitment or his words are worth nothing.
The hon. Lady claims that it was woefully inadequate; the VAT reduction was the single biggest ask from the UK hospitality industry. Not only was that delivered, but it was delivered with an extra initiative, eat out to help out, which proved to provide an enormous fillip to the reopening of that part of the economy. It is also worth bearing in mind that all the businesses engaged in that industry are not paying any business rates at all until March next year.
The Government have put in place a broad set of policies to support businesses and individuals through this crisis. The coronavirus job retention scheme and self-employment income support scheme have supported more than 9 million and 2.7 million jobs and people respectively. As the economy reopens, we must adjust our support to ensure that people continue to get back to work, protecting the UK economy and people’s livelihoods.
The Institute for Employment Studies is now predicting 450,000 redundancies over the three months to September and a further 200,000 by the end of the year—more than double the levels seen in the 2008-09 recession. Many of those whose jobs are at risk work in the creative industries, performing arts and hospitality, which would be thriving without coronavirus. Why is the Chancellor persisting with a cliff-edge approach, which will inflict the hardship and misery of unemployment on so many people, instead of taking a flexible approach to furlough to save good jobs for the long term?
The furlough scheme, as it is currently constructed, is flexible. It was a key demand from business groups and unions, which we responded to. As the economy is slowly reopening over the late summer and autumn, the furlough scheme has adapted to that, allowing businesses to bring back their employees in a flexible fashion, and that is exactly what they are currently doing.
I congratulate my right hon. Friend on the introduction of the self-employment income support scheme in particular, but does he recognise that it cannot continue indefinitely? Does he also agree that the self-employed are some of the most innovative individuals in our economy, and it is time to release their innovation to kick-start us?
My right hon. Friend is absolutely right. Now that we have begun to reopen the economy, it is right that our support becomes differentiated and the focus shifts to getting people back to work. It is not possible to sustain this level of intervention. I fully agree with him: those who are entrepreneurial and self-employed deserve our support, and they will continue to get it as we drive our recovery out of this crisis.
Hundreds of thousands of people across the country, including many in my constituency, have not been able to get support during this pandemic. The Government have repeatedly said that it is too difficult to get support to people who are not on the coronavirus job retention scheme or the self-employment income support scheme. The Government have had six months to put something in place, so will the Chancellor outline to the House what barriers exist now to getting support to the people who have so far been excluded?
As I have said from this Dispatch Box, we have not been able to help absolutely everyone in the exact way that they would have liked, but that does not mean that support is not available. Through considerable increases to universal credit and local housing allowance, we have provided support to the most vulnerable. Through measures such as mortgage holidays, which one in six mortgage customers have taken up in the past few months, we have ensured that everyone, one way or another, can access some degree of Government support.
Over £33 million of bounce back loans have been granted to businesses in Darlington, but many businesses in my constituency bank with new start-up, online and challenger banks and have faced some issues with accessing bounce back loans. What steps is the Treasury taking to assist with access to bounce back loans for those who need them?
My hon. Friend raises an important point, and we recognise the vital role that alternative lenders can play in providing finance to SMEs. We continue to work with them and the sector to see what more we can do. As he recognises, the bounce back loan scheme has proved enormously successful, and so far we have accredited 28 bounce back lenders, who have provided loans to more than 1 million businesses. In the first instance, I urge businesses in my hon. Friend’s constituency to look online at one of those 28 lenders, and see whether they can provide the loans that that business requires.
The Chancellor, and all of us whose salaries have been paid throughout the pandemic, may find it difficult to grasp the deep sense of unfairness felt by those who, through no fault of their own, are entirely excluded from any support. Perhaps they followed their entrepreneurial dream and left a good job to start their own business, as encouraged to do by this Government, but did not file their tax returns in time. Perhaps they have an event business that has been left to fend for itself without any events. There are thousands of such people in my constituency alone. How can the Chancellor expect the country to come together to fight the virus when so many have been excluded from all support?
I respectfully disagree with the hon. Lady. Most people in the country recognise that the Government have provided unprecedented support at this difficult time to millions of people, as well as to hundreds of thousands, if not millions of businesses. Although people may not have been able to get support in the exact way they would have wanted, across the spectrum, whether through the welfare system and local authorities, or through banks and the provision of credit, we have ensured that some form of support is available to the vast majority of the British public.
It is now been six months during which 3 million self-employed people have been excluded and locked out of the coronavirus support schemes, and it is no coincidence that this week the Trussell Trust announced an unprecedented need for support. Nearly half of those people are first-time users, and if the forecasts are right, the situation will only get worse, with six emergency food parcels being delivered every minute as we get to winter. I implore the Chancellor to tell hon. Members what he will do to support those who are excluded, so that this disaster does not turn into a catastrophe for families around the country.
The hon. Lady is slightly confused. On one hand she speaks about people who were not eligible for the self-employment scheme, but those who were excluded earned more than £50,000 and were in the top 5% of all earners, with an average median salary of £200,000. In the same question she speaks about targeting support to those who cannot afford food. She should figure out which issue she cares about.
When the circumstances change, policies should adapt. Infection rates are growing, local restrictions are becoming more common, and this morning’s figures show levels of unemployment at a two-year high, and rising, particularly among the young. France and Germany have extended their employment support for a further year. Is it time to reconsider the jobs cliff edge that is approaching at the end of next month, and at least to extend employment support to those sectors that cannot yet go back to work, and areas hit by local lockdowns, so that businesses and workers are not punished for doing the right thing?
The right hon. Gentleman is right to highlight the increase in cases, which is why the Government have taken steps to ensure that we remain in control in suppressing the virus. He talks about local lockdowns, and he will have seen the announcement last week about extra business rates support for businesses that find themselves in those areas, with a payment of up to £1,500 per three weeks of lockdown. He mentioned other countries. He is right about Germany and its scheme, but it is worth bearing in mind that Germany has had such a scheme, in co-operation with businesses and through its social security system, for more than a decade.
As you might expect, Mr Speaker, the Public Accounts Committee is already beginning the reckoning of costs, and there is a cost to the Exchequer from all those people who were self-employed, or employed on short-term contracts, and who received no support. Ultimately, the state still has to support those people, and no tax comes in from them. Will the Chancellor go back to the drawing board and consider the long-term issue of the cost to our country of not supporting people who have a good track record with HMRC and who could be supported? They have lived on fresh air for all these months.
I hear what the hon. Lady says and will certainly reflect on it. I refer her to my response to the question from my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) about the importance of a digital taxation system, which I know the hon. Lady’s Committee will have an interest in. As throughout this crisis, our ability to respond in the way that we would want to is often limited by the information that we hold. My right hon. Friend the Financial Secretary to the Treasury has put out a 10-year tax administration strategy that will ensure that our tax system collects in real time the information we need about people and businesses up and down this country, so that, should something like this happen again, the Government can respond in the way that they would want to, as quickly as possible.
This Government’s comprehensive and generous package of support in response to the coronavirus has protected millions of livelihoods and supported hundreds of thousands of businesses up and down the country. Our plan for jobs announced in July will protect, create and support jobs, notably through our recently launched kickstart scheme, as we look to get the UK economy back on its feet.
Scottish Government analysis has revealed that ending the transition period in 2020 could cut £3 billion from the Scottish economy over the next two years—on top of the impact of coronavirus. With the UK Internal Market Bill making the risk of a no-deal Brexit even greater, what reassurances can the Chancellor give to my constituents and the people of Scotland that there will be no real-term spending cuts that will inflict even greater damage on our economy?
The Government and I remain committed to getting a deal and will continue to engage constructively with our European partners in pursuit of that aim. With regard to funding for Scotland, I can tell the hon. Lady that the Scottish Government have received £6.5 billion in advance of it being called for, so that they can provide the support required to their residents.
My hon. Friend is absolutely right. Manufacturing and exports, especially from the west midlands and the Black Country, will play a key part in driving our recovery. I am pleased to tell him that the Exchequer Secretary is shortly meeting with the Mayor, Andy Street. That comes on top of our plans to provide £1 billion to develop the UK supply chain for electric automotive vehicles over the next five years, and £850 million of allocations from the local growth fund for his region.
The Chancellor will be aware of concerns that the UK risks a slower recovery than comparable economies for self-inflicted reasons. Despite the devastating impact on jobs, the Treasury Front Benchers have yet again today—six times—rejected targeted wage support. Economists are concerned about this Government’s inability to get a grip on the public health crisis, which evidence from the Scientific Advisory Group for Emergencies suggests stems in part from a failure to adequately support people who have to self-isolate. Rumour has it that the Chancellor is blocking attempts to improve sick pay, so I put it to him: can he put himself in the shoes of those low-paid workers who often have to choose between paying their rent and bills, and putting food on the table for their kids? If these workers are advised to self-isolate, they get £95.85 a week—and that is if they are even eligible for statutory sick pay. Surely the Chancellor must agree with the Secretary of State for Health that statutory sick pay is not enough to live on.
From the beginning of this pandemic, we have made changes to the operation of statutory sick pay and our welfare system to ensure that those who are isolating in any circumstance receive support from day one, and that we improve flexibility, particularly for the self-employed, through the removal of the minimum income floor. As the hon. Lady knows, we are also trialling incentive payments in local lockdown areas.
I did not ask the Chancellor about the precise details of delivery and I did not ask about the scope; I asked him about the value of statutory sick pay. He needs to get a grip on this issue. If he fails to do so—and the blockage appears to be his responsibility—then we will see additional localised re-impositions of lockdown, with all the implications that has for jobs and businesses. Please, Chancellor, get a grip on this issue.
There are two other reasons why economists are worried about the UK’s recovery. First, of course, there is concern about our future as a trading nation. Both of the Chancellor’s predecessors warn that the threat to override the withdrawal agreement could damage our country’s reputation and prosperity. Why do those former Chancellors appear to be more concerned about our country’s economic prospects than the current one? The second reason for concern stems from the prospect of premature spending cuts or tax rises. According to the Financial Times, it is politics that could drive the Chancellor towards early tax rises, so will he rule them out for the rest of this year?
Order. I do want the Chancellor to answer, but we will have to shorten the questions.
The hon. Lady talks about our place as a trading nation. She may have missed the news last week that this country has concluded an enhanced free trade agreement with Japan. I pay enormous tribute to my right hon. Friend the Secretary of State for International Trade for concluding a deal that will be better for British businesses, particularly in the areas of the economy we do so well on such as digital and services. It will protect more of our great agricultural produce, open up more markets for our businesses to sell to and reduce prices for British shoppers. That is what the future of global Britain looks like.
My hon. Friend makes an excellent point and I thank her for it. She will know that some of the interventions we have already put in place last through into next year, for example the removal of the need to pay business rates for businesses in hospitality, which has been particularly affected. She may be reassured to know that we recently introduced the new business support grant for businesses forced to close as a result of local lockdown, where the Joint Biosecurity Centre gold command has instituted that measure, and those grant payments will be available up to £1,500 per few weekly cycles.
The right hon. Gentleman is absolutely right to highlight the importance of the aerospace industry to our economy. It is, in common with aerospace industries across the globe, suffering a deep depression in demand for all the obvious reasons. He can rest assured that we engage regularly with the companies in that sector. In particular, to support their future success, we are investing heavily in R&D alongside those companies to make sure we remain on the cutting edge of advanced manufacturing capability.
My hon. Friend is absolutely right to highlight the importance of good childcare and he is right to highlight that the Government support people with 20% of their childcare costs up to a cap of £2,000 through tax-free childcare. I can also tell him that, in recognition of the importance of this issue, we made some adjustments to how tax-free childcare operated during the pandemic, so that if someone’s income fell below the minimum income requirement as a result of what was happening they would continue to receive financial support up until the end of October.
The hon. Gentleman is absolutely right to highlight the disproportionate economic impact that this crisis will have on young people. I have spoken about that from the Dispatch Box before, and he is right that we should focus our attention on them. That is why, in our plan for jobs, we outlined the kickstart scheme, which will initially make available fully-funded Government job placements for a quarter of a million young people at risk of long-term unemployment. I am confident that many young people in his constituency, like all of ours, can benefit from that scheme, and I urge him to work with his local businesses to get them signed up to the scheme and take on a young kickstarter.
It is right that companies pay the tax that they owe the Exchequer so that we can fund the public services that all our constituents rely on. That is why this Government instituted the digital services tax for online companies, which came into force this year. We remain committed to that tax, although we work with our partners around the world to replace our unilateral one with a multilateral solution through the OECD that will properly tackle this issue once and for all.