Rishi Sunak
Main Page: Rishi Sunak (Conservative - Richmond and Northallerton)Department Debates - View all Rishi Sunak's debates with the Department for Transport
(4 years, 7 months ago)
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Tracy Brabin (Batley and Spen) (Lab/Co-op)
The Chancellor of the Exchequer (Rishi Sunak)
The self-employment support scheme opened last week ahead of schedule and provides support worth up to £7,500 to millions of individuals. I am pleased to tell the House that, at the end of yesterday, there had been more than 2 million claims, with grants worth £6 billion in total being claimed for. Those people will have the money in their bank accounts within six working days of their claim, and of course, I will keep the scheme under review.
Tracy Brabin [V]
I thank the Chancellor for his response. Despite him saying that the self-employment scheme is one of the most generous in the world, tens of thousands are still missing out—new starters, pay-as-you-earn freelancers, those paid through dividends and those earning over £50,000. I have three simple questions for the Chancellor. Will the self-employed income support scheme be extended in line with the job retention scheme? Are there plans to lift the cap on profits? And will he please look again at supporting new starters?
Rishi Sunak
We have discussed these things before, but I do not believe that removing the cap would be the right or socially just thing to do. The average income of those above the cap is £200,000, and 95% of those who are self-employed fall underneath the cap.
Owen Thompson (Midlothian) (SNP)
The Chancellor of the Exchequer (Rishi Sunak)
Our plan to support businesses and individuals is one of the most comprehensive in the world. We have provided tens of billions of pounds in cash grants, tax cuts and discounted loans for businesses; deferred taxes for those who are self-employed, employed and in business; a world-leading job retention scheme to keep as many people in employment as possible; income protection for the self-employed; and a strengthened safety net to protect the most vulnerable in our society.
Owen Thompson [V]
Successful businesses in the tourism and hospitality industries before the lockdown will face a very different reality at the end of it, with overseas visitors gone for the foreseeable future and social distancing in place. These businesses need time to reinvent themselves for the new post-covid environment. What measures will the Chancellor introduce to enable much greater flexibility in the furlough scheme to support them as they prepare for this new reality?
Rishi Sunak
It is precisely because of the time it takes for businesses to ramp up that last week, I announced an extension to the furlough scheme all the way through to October, to provide that runway for growth—in particular, for those who will open later in tourism and hospitality. As I said, we will introduce flexible furloughing in the extension period of that scheme.
Amy Callaghan [V]
Those on fixed-term contracts are in a particularly difficult situation where employers have placed them on furlough but are unwilling to extend it past their contract end date. One employer highlighted to me that that is because they are concerned that if they continue to furlough an employee without formally extending the contract, Her Majesty’s Revenue and Customs will deem the furlough frivolous and seek reimbursement. Can the Chancellor confirm that employers can continue to furlough those whose fixed-term contracts have ended without any financial repercussion?
Rishi Sunak
I am happy to look at the specific example mentioned. It is important for us—and to protect the taxpayer—that we are paying furlough payments to those who are genuinely in employment and have a formal employment contract, but I am happy to look at that example.
Mr Speaker
I welcome the right hon. Member for Wolverhampton South East (Mr McFadden) back to the shadow Front Bench.
Rishi Sunak
The right hon. Member is absolutely right: finance should flow to the industrial base of our country. The investment grade rating, which relates to the corporate financing facility that the Bank of England runs, is important. Because that money is accessed by companies without any additional credit check by the Government, it is right that an investment grade rating is used, to protect the taxpayer. We have taken a flexible and generous interpretation of that, providing companies with the ability to use their bank rating to get access. For those companies for which commercial paper is not the right approach—many of the industrial companies he mentioned—we have a larger coronavirus business interruption loan scheme programme, and I am in conversations with various industry stakeholders to ensure that that is appropriately sized to provide finance to every part of our industrial base.
Alison Thewliss (Glasgow Central) (SNP) [V]
Research by the Chartered Institute of Personnel and Development today released today has found that participants in the furlough scheme would otherwise have made up to 35% of their workforce redundant, rising to half the workers in hospitality, where the uptake of the scheme is particularly high at about 80%. Hospitality and tourism were first out and will be last back. Many of these companies have no income and are building up debt, and may feel compelled to sack workers if they are asked to pay more by the Government at the end of July. How does the Chancellor intend to prevent this and to support this part of the economy in the months ahead?
Rishi Sunak
It is precisely the retail, hospitality and leisure sector that has received the most direct fiscal support from the Government through cash grants of £10,000 or £25,000 and a business rate holiday for the entire year—well beyond the point of reopening. That represents significant support, and the extension of the furlough scheme through to October gives those companies enough of a runway to grow back into a safe space.
Mary Glindon (North Tyneside) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
As I announced last week, the coronavirus job retention scheme has been extended by four months until the end of October.
Mary Glindon [V]
New starters not registered with HMRC before 19 March and agency staff workers are some of those who currently find they are in limbo when it comes to accessing the job retention scheme. What more can the Chancellor do to help these workers now facing hardship?
Rishi Sunak
When I announced the scheme, we said that those who were on real time information and had notified HMRC on 28 February would be eligible. That covers 29.5 million workers in this country. We found a way to extend that to 19 March—the day before the announcement was made. That protects the taxpayer against fraud and enables as many of those people to be included as possible. It brought another 230,000 people into the scheme. It is important to remember that this scheme now covers close to 30 million workers. As of the end of last week, 8 million people from about 1 million businesses are covered by the scheme and having their wages paid by the Government to protect their jobs and their future security.
Mr Speaker
We now head down to the south-west and the Chair of the Select Committee, Mel Stride.
Mel Stride (Central Devon) (Con) [V]
Thank you, Mr Speaker.
The future fund will provide venture capital-backed businesses with vital support, but of course it excludes investments made through the enterprise investment scheme and the seed enterprise investment scheme. It is certainly the case that there is significant public subsidy within those two schemes. However, businesses supported by them still face the challenges of the virus and, where successful, still go on to generate significant numbers of jobs. Will my right hon. Friend therefore take a second look at the qualification requirements for the future fund to see whether EIS and SEIS might be accommodated in some way?
Rishi Sunak
As my right hon. Friend will know well, EIS is a notified EU state aid, and that is what presents the challenge to providing EIS relief for convertible loan instruments into the future fund. That said, guidance was published today, and the fund will be open for applications on Wednesday. I have been crystal clear that should applications exceed the initial £250 million provided, I will be more than happy to expand the scheme. I think this will be a vital part of fuelling our recovery, because, as he said, these companies provide the growth of tomorrow and they deserve our support.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Labour supported the introduction of the furlough scheme, and we have consistently called for it to become more flexible. We recognise that it cannot persist forever. However, according to press reports, the Treasury is considering asking all employers to pay 40% of employee wages on the JRS from 1 August, which risks a massive spike in job losses.
Rishi Sunak
As I think the shadow Chancellor has acknowledged previously, we are in deep consultation with both unions and business groups to ensure that we get the design right for the second part of this scheme. It is right both for the economy and, indeed, for the taxpayer to ask employers to make a contribution to paying the wages of their employees. They will have the benefit of flexibility in furloughing to help offset that. I cannot comment now on this, but I did say that details will be provided by the end of the month.
Anneliese Dodds
I appreciate the Chancellor’s comments, but we really need clarity around whether he is considering evidence from other countries, which, in many cases, are calibrating changes to their salary backfill schemes with the lifting of the lockdown. Is he looking at that evidence, particularly on the potential impact of unemployment, or is he only looking at potentially the introduction of a uniform contribution from 1 August?
Rishi Sunak
As I said, there will be details at the end of the month, but the hon. Lady can rest assured that I speak regularly with my counterparts in countries across the world to learn from their experience and will make sure that our scheme continues to be one of the most generous, comprehensive and effective anywhere in the world.
Dehenna Davison (Bishop Auckland) (Con)