Oral Answers to Questions
Rishi Sunak Excerpts(3 years, 10 months ago)
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Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The Chancellor of the Exchequer (Rishi Sunak)
The Government have taken unprecedented steps to keep as many people as possible in their existing jobs, support viable businesses to stay afloat and protect the incomes of the most vulnerable. We are now carefully and safely reopening our economy.
Dave Doogan [V]
I have previously raised the issue of the 3 million taxpayers being excluded from Government support with the Prime Minister, the First Secretary of State and the Leader of the House, all of whom have repeated details of the Government support provided to other groups. To be clear, it is understood that 2.6 million self-employed people were supported and 9 million people were furloughed. What remains an issue, though, is the 10% of the workforce who have received no meaningful support to help navigate covid. Specifically on the 3 million excluded, will the Chancellor provide an eleventh-hour lifeline such as that provided for the arts, or is he planning to cut 3 million workers adrift? It is one or the other, and it is now or never.
Rishi Sunak
I have said previously that, although we have not been able to help everyone in exactly the way that they would have liked, I am confident that the breadth and scale of the interventions we have provided ensures that everyone is able to access some support. We have also strengthened our security net, with welfare through universal credit, among other things, and our self-employment scheme remains one of the most comprehensive and generous anywhere in the world.
Margaret Ferrier [V]
The economic impact of coronavirus has not been distributed evenly across the UK economy, yet the Scottish Government have extremely limited borrowing powers to stimulate demand and aid recovery in key sectors. A one-size-fits-all approach should no longer be the norm. Will the Chancellor bring forward the review of the fiscal framework, lift the caps on borrowing and give the Scottish Government the tools that they need to invest in Scotland’s future?
Rishi Sunak
My right hon. Friend the Chief Secretary to the Treasury is in constant dialogue with his counterpart, the Finance Minister in Scotland, on these issues, but the people of Scotland are able to benefit from the strong measures that we put in place for the entire United Kingdom. Whether it be our loan schemes or, indeed, our furlough scheme, everyone in every part of this country is able to benefit.
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.
Alison Thewliss (Glasgow Central) (SNP)
To follow up on the question asked by my hon. Friend the Member for Angus (Dave Doogan), the ExcludedUK all-party group launched this morning with more than 150 Members of this House signing up as members, cheered on by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). Will the Chancellor tell me why he has decided that 3 million people are not worthy of support, and why will he not put something in place to protect their incomes?
Rishi Sunak
Everyone in this country has benefited one way or another from what we have been able to do. Although people have not been able to be helped in exactly the way they would have liked, we have been able to put in place measures unprecedented in scale and speed, and that meant we did have to make some difficult decisions to implement those policies. None the less, I do believe that, because of the measures that we have taken to strengthen our safety net, for example, everyone, no matter where they are, has access to more support than they did before this crisis began.
Alison Thewliss
If the Chancellor listened to the evidence from groups such as ExcludedUK, he would know that that is simply not the case. To turn to some of the rhetoric of the past few days, the Government seem to be trying to imitate the rhetoric of President Duterte of the Philippines and President Roosevelt on the new deal, but the measures do not meet the scale of either of those gentlemen’s ambitions. Does he agree with the SNP that we need a stimulus package of at least £80 billion, including a 2% cut to employers’ national insurance contributions and a reduction in VAT for the hospitality sector, as demanded by the Scottish Government? If he does not believe that those steps should be taken, will he allow the Scottish Government to have the full suite of financial powers that they require to meet that challenge?
Rishi Sunak
The hon. Lady talks about scale of ambition. I am proud of what this Government have put in place and the speed at which we have done so. The jobs of 9 million people have been protected through our furlough scheme; 2.7 million self-employed people have had their income supported; and millions of companies have received access to loans, grants, tax deferrals. In sum, this represents £130 billion of support—one of the most comprehensive and generous support packages available of any country anywhere in the world.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
The Chancellor knows that different sectors of our economy face very different challenges in the months ahead, so will he listen to the businesses right across our country that have called again and again for the job retention scheme to have the flexibility to meet those different challenges?
Rishi Sunak
On the job retention scheme, our policy is clear. We have extended the scheme all the way through to the autumn, at which point it winds down gradually and in a way that asks for very modest contributions from employers. None the less, I do recognise that different sectors have faced a different circumstances during this crisis, particularly those in the hospitality, leisure and retail sector, which is why we cut business rates for the entire year for those sectors and, indeed, provided cash grants of £10,000 or £25,000 to almost 1 million businesses up and down the country.
Martin Vickers (Cleethorpes) (Con)
Rosie Cooper (West Lancashire) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
Through the coronavirus job retention scheme and the self-employment income support scheme, the Government have protected 9.4 million jobs and supported the incomes of 2.7 million self-employed. I remain committed to helping the unemployed return to work and supporting those who are most vulnerable to job loss. We will continue to monitor economic conditions to ensure our labour market policy response is both appropriate and effective.
Sarah Champion [V]
In his announcement of the self-employment income support scheme, the Chancellor told self-employed people that they have not been forgotten and no one will be left behind, but the Treasury Committee has found that more than a million people have been unable to benefit from either that scheme or the job retention scheme. That is certainly what I am finding in Rotherham. Will he commit to acting to ensure that, true to his word, no one is left to face this crisis alone?
Rishi Sunak
Some 95% of those who are majority self-employed are able to benefit from the self-employment scheme. In its design, its duration, the breadth of its coverage and the generosity of its support, the scheme remains the most generous and comprehensive self-employment support scheme in the world.
Anna McMorrin
We are facing the worst economic recession in history and a climate crisis. Despite the warm words yesterday, the green finance announcement does not go far enough. Germany is investing between £40 billion and £50 billion, France £13.5 billion and South Korea £11.5 billion, so £3 billion just does not cut it. Given that half a million 16 to 24-year-olds are currently unemployed, will the Chancellor commit to properly financing a green jobs guarantee to give our young people a future?
Rishi Sunak
The hon. Lady mentioned plans from other countries. It is worth bearing in mind that those plans relate to spending commitments over many years and are actually better compared with what we outlined at Budget, where we set out a £600 billion investment programme over the remainder of this Parliament, including many initiatives such as carbon capture and storage, the nature for climate fund and improvements in air quality. Conservative Members wholeheartedly believe in a green revolution, and we will provide the capital to make that happen.
Lee Anderson
I pay tribute to all the small business owners in Ashfield and Eastwood who have worked really hard to get ready for the reopening of their businesses last weekend in a covid-secure manner—places such as the world-famous Diamond Club, the Dog and Parrot, the Bus Stop Café, St Joseph’s Social Club and the outstanding Teversal Camping and Caravanning Club site. Although I am grateful to the Chancellor for all the financial support he has provided, does he agree that the only way to protect jobs and businesses in the long term is by safely reopening the economy?
Rishi Sunak
My hon. Friend is absolutely right. No support scheme can substitute for safely reopening our economy. I enjoyed seeing his Facebook page with his tour of Sutton, Eastwood and Huthwaite, and all the establishments that he mentioned—including a candle shop, I believe—and I pay tribute to all his local businesses for following the guidance and implementing safe measures so that they can welcome their local communities back with open arms.
Bambos Charalambous
The Government’s intervention to provide financial support to the arts is welcome, but freelance creative workers have received little or no support from the furlough scheme or the self-employment scheme for over 100 days. What specifically will the Chancellor do to correct this in the rescue package announced for the creative industries?
Rishi Sunak
Those in the creative arts, like others, can benefit from the self-employment scheme and other interventions that we have put in place, but it is important to know what happened yesterday: a £1.5 billion support package for our cultural institutions up and down the country, from our crown jewels—our globally recognised assets—to our local community theatres. They will all be able to benefit from the support we have put in place and preserve what is so special about our cultural heritage.
Aaron Bell
I thank the Chancellor for all he has done so far, and I look forward to his statement tomorrow. He mentioned unemployment, and we are aware that it is rising, so one of the most important things we can do is to get people back into work as quickly as possible. In Newcastle-under-Lyme we are benefiting from the Stoke-on-Trent and Staffordshire local enterprise partnership redundancy and recruitment triage service. Will he welcome that? There are areas where employment is growing, and if we can get people who have been made redundant into those jobs as quickly as possible, we will minimise the devastating effects of this coronavirus.
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.
Rosie Cooper [V]
Will the Government abandon their one-size-fits-all wind-down of the furlough and self-employed schemes and adopt a targeted strategy that acknowledges that hotel workers, chefs and self-employed lighting technicians cannot and should not be treated in the same way as workers in sectors that are already back at full capacity?
Rishi Sunak
The most important thing for all these sectors is for them to be safely reopened. That is why I am delighted that last weekend we were able to meet the target set out in our reopening plan. The Prime Minister has spoken about reopening our remaining closed sectors in the coming weeks, which is welcome news. The hon. Lady is right that these sectors have faced hardship. That is why, as I said, they have received considerable extra support from the Government in the form of business rates holidays and cash grants.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Thousands of jobs losses have been announced in recent days, and many more are expected if the furlough scheme is withdrawn from all sectors at the same time. With young people facing the most difficult labour market conditions for a generation, and many otherwise viable businesses in trouble because of social distancing rules, does the Chancellor accept the case for employment support being aimed directly at the sectors most likely to be hit by job losses in the coming months?
Rishi Sunak
Those who call for a sector-specific approach are not always able to articulate exactly how they would define those sectors and also the supply chain that they serve. The most important thing is to have provided broad, generous and swift coverage to protect 9 million jobs, as this Government have done, and now to reopen these sectors so that we can get as many of those people back to work as quickly as possible to the jobs that they have.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Henry Smith (Crawley) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
Four months on from the onset of coronavirus, we have slowly and carefully reopened much of our economy, and we can now begin our national recovery. Throughout this crisis, I have repeatedly made it clear that, while we cannot protect every single job, we will do all we can to make sure our businesses and people have the tools they need to get through this and emerge stronger on the other side.
Henry Smith [V]
To help the aviation and travel sectors recover from the negative impact of covid-19, will my right hon. Friend consider suspending air passenger duty until at least the end of summer 2021?
Rishi Sunak
My hon. Friend, as always, is a champion for the industry, and he knows how important it is to the UK economy. I can tell him that, at the Budget, we committed to a consultation on aviation tax reform. We remain committed to that, and will bring forward the timing in due course.
Anneliese Dodds (Oxford East) (Lab/Co-op)
The Chancellor stated earlier that the job retention scheme is being wound down from the autumn. It is actually being wound down from the start of next month across all sectors at the same time, and we are already seeing the impact of that in very substantial redundancies. The Resolution Foundation called this week for a targeted continuation of the scheme for the hardest hit industries and those areas affected by additional lockdowns. The Chancellor has said he does not want to pick winners, but this health crisis has involved Governments designating losers, quite rightly, for public health reasons, so why is he persisting with the one-size-fits-all removal of the job retention scheme, when this will inevitably lead to additional redundancies?
Rishi Sunak
This is not about picking winners or losers. This is about protecting people’s health, and where it is incumbent on the Government to step in and make sure that we can protect people’s health through targeted intervention, that will remain the right thing to do. With regard to economic support, my right hon. Friend the Health Secretary has made it clear that support has been provided to the local council when this has been the place to do so. With regard to the furlough scheme, we are of the belief, rightly, that this is a universal scheme, it is generous, it has been extended to October and it is winding down in a gradual and temperate manner.
Anneliese Dodds
I have to say that it is disappointing to hear that the Chancellor is not budging from this position. As mentioned, it is already leading to additional waves of redundancies—avoidable redundancies in many cases. Labour has repeatedly called on the Government to match the ambitions of Labour’s previous future jobs fund in developing support for unemployed young people, so may I ask the Chancellor why, put together, the traineeship fund and green jobs challenge fund—just announced—amount to less than a quarter of the size of the future jobs fund? That hardly reflects a focus on jobs, jobs, jobs.
Rishi Sunak
I am not quite sure that is right. In reality, the future jobs fund was around £1 billion. We announced yesterday the £2 billion green home grant to provide home efficiency upgrades for hundreds of thousands of homes and create tens of thousands of jobs up and down the country. Not only will households save money on their electricity bills and save carbon, but we will create good local jobs in the process.
Laura Farris (Newbury) (Con)
Rishi Sunak
My hon. Friend is absolutely right: young people are more likely than not to work in affected sectors and more likely than others to be furloughed, and we know from all the evidence that the impact of scarring on young people is very significant, which is why they remain uppermost in my mind. I give my hon. Friend the reassurance that they will be prioritised as we think about our recovery and our labour-market interventions.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP) [V]
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Rishi Sunak
I am glad that the announcement we made yesterday was warmly welcomed across the cultural sector, by institutions large and small. I can assure the hon. Lady that the support package is not just for large institutions; it will find its way to all our local cultural institutions that play such an important part in our local communities. The Culture Secretary and his team will be here just after Question Time to answer further questions.
Chris Grayling (Epsom and Ewell) (Con)
Rishi Sunak
I wholeheartedly agree with my right hon. Friend that we should put reaching our net zero commitments at the heart of our recovery. He will have heard our recent announcement about green homes grants, which shows our commitment in this area. I know that he has a lot of experience in hydrogen transportation, and I look forward to hearing his thoughts on that so that they can be incorporated into our future plan.
Karin Smyth (Bristol South) (Lab)
Rishi Sunak
I agree with the hon. Member about the importance of post-16 education and further education, which is why I was delighted to announce at the Budget a £400 million increase in post-16 education funding, a record increase in per-pupil funding compared to the last several years, and indeed the Prime Minister has talked about our commitment to upgrading the entire FE college estate across the United Kingdom.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
Rishi Sunak
I know that my hon. Friend is a proud champion of his local theatre, the Lyceum in Crewe, and that he has warmly welcomed our announcement. The Culture Secretary and his team will be here just after Question Time. We share his ambition to ensure that the support reaches all relevant institutions as quickly as is prudently possible.
Kate Osamor (Edmonton) (Lab/Co-op) [V]
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Rishi Sunak
These young people have absolutely not been forgotten, and we remain indebted to them for their dynamism in helping to power our recovery. I am delighted that our start-up loans scheme has recently been expanded and is able to provide cash loans to those budding entrepreneurs in her constituency and others. I urge them to have a look at it to see whether it will help fund their plans.
Mr Speaker
In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for five minutes.
Financial Services Regulation
Rishi Sunak Excerpts(3 years, 10 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
The Working Group on Sterling Risk-Free Rates (RFRWG), the Financial Conduct Authority (FCA) and the Bank of England published joint statements on 25 March[1] and 29 April[2] relating to LIBOR transition. These statements underline the need for firms to continue to migrate away from LIBOR as a reference in their financial contracts and reiterate that firms cannot rely on the benchmark’s continued publication as the current voluntary agreement between the FCA and LIBOR panel banks will expire after end-2021 (as announced in 2017[3]). The Government have followed these and related global regulatory developments closely, including the Tough Legacy Taskforce report[4] published by the RFRWG.
The Government share both the regulators’ pragmatism in recognising the interim timetable for transition has been slowed by Covid-19 and their urgency that the market must continue actively transitioning away from LIBOR. It is in the interests of financial markets and their customers that the pool of contracts referencing LIBOR is shrunk to an irreducible core ahead of LIBOR’s expected cessation, leaving behind only those contracts that genuinely have no or inappropriate alternatives and no realistic ability to be renegotiated or amended. The Government recognise, however, that legislative steps could help deal with this narrow pool of ‘tough legacy’ contracts that cannot transition from LIBOR.
Unlike many jurisdictions, the UK has an existing regulatory framework for critical benchmarks such as LIBOR. The Government therefore intend to legislate to amend and strengthen that existing regulatory framework, rather than directly to impose legal changes on LIBOR-referencing contracts that are governed by UK law. The legislation will ensure that, by end-2021, the FCA has the appropriate regulatory powers to manage and direct any wind-down period prior to eventual LIBOR cessation in a way that protects consumers and/or ensures market integrity. The Government therefore intend to:
Amend the UK’s existing regulatory framework for benchmarks to ensure it can be used to manage different scenarios prior to a critical benchmark’s eventual cessation. In particular, the Government will introduce amendments to the Benchmarks Regulation 2016/1011 as amended by the Benchmarks (Amendment) (EU Exit) Regulations 2018 (the ‘UK BMR’), to ensure that FCA powers are sufficient to manage an orderly transition from LIBOR.
Extend the circumstances in which the FCA may require an administrator to change the methodology of a critical benchmark and clarify the purpose for which the FCA may exercise this power. New regulatory powers would enable the FCA to direct a methodology change for a critical benchmark, in circumstances where the regulator has found that the benchmark’s representativeness will not be restored and where action is necessary to protect consumers and or to ensure market integrity.
Strengthen existing law to prohibit use of an individual critical benchmark where its representativeness will not be restored, while giving the regulator the ability to specify limited continued use in legacy contracts.
Refine ancillary areas of the UK’s regulatory framework for benchmarks to ensure its effectiveness in managing the orderly wind down of a critical benchmark, including that administrators have adequate plans in place for such situations.
The Government intend to take these measures forward in the forthcoming Financial Services Bill. Following engagement with industry and global counterparts, the FCA will, where appropriate, issue a number of statements of policy relating to its approach to a range of new powers provided by the legislation before it exercises those new powers. The FCA may consider, among other factors, international impacts before exercising its new powers, given LIBOR’s global usage.
The Government agree with the RFRWG’s Tough Legacy Taskforce that active transition of legacy contracts remains of key importance and provides the best route to certainty for parties to contracts referencing LIBOR. Parties who rely on regulatory action, enabled by the legislation the Government plan to bring forward, will not have control over the economic terms of that action. Moreover regulatory action may not be able to address all issues or be practicable in all circumstances, for example where a methodology change is not feasible, or would not protect consumers or market integrity. This reinforces the importance of parties who can transition away from LIBOR doing so on terms that they themselves agree with their counterparties. The Government, the FCA and the Bank of England will continue to work closely to encourage market-led transition from LIBOR and to monitor progress.
[1] https://www.fca.org.uk/news/statements/impact- coronavirus-firms-libor-transition-plans.
[2] https://www.fca.org.uk/news/statements/further-statement- rfrwg-impact-coronavirus-timelinefirms-libor-transition-plans.
[3] https://www.fca.org.uk/news/speeches/the-future-of-libor.
[4] https://www.bankofengland.co.uk/-/media/boe/files/ markets/benchmarks/paper-on-theidentification-of-tough-legacy-issues.pdf?la=en&hash= 0E8CA18F27F75352B0A0573DCBBC93D903077B6E.
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Financial Services Update
Rishi Sunak Excerpts(3 years, 10 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Leaving the EU means the UK has taken back control of the rules governing our world-leading financial services sector. The UK has always championed and remains committed to the highest international standards of financial regulation. The financial services sector plays a crucial role in supporting the wider economy, creating jobs across the UK, supporting SMEs, contributing taxes, driving regional growth and investment, tackling climate change and embracing technology and innovation. The UK’s financial services sector has also been at the forefront of our response to the economic impact of covid-19, extending more than £35 billion of credit to provide fundamental support to businesses and offering crucial forbearance on mortgages and consumer credit products. Frontline staff have worked to keep bank and building society branches open throughout the pandemic, ensuring that people all across the UK could access the vital financial services they need.
The future success of the UK financial sector will be underpinned by a world-class environment for doing business. In turn, our future legislation will be guided by what is right for the UK, to support economic prosperity across the country, to ensure financial stability, market integrity and consumer protection, and to continue to ensure the UK remains a world leading financial centre. An enduring future relationship with the EU would help complement the UK’s leading global role in financial services. The Government continue to believe that comprehensive mutual findings of equivalence between the UK and the EU are in the best interests of both parties and we remain open and committed to continuing dialogue with the EU about their intentions in this respect.
There are now a range of important regulatory reforms in the process of being implemented at the international and European level that the UK needs to address before the end of the transition period on 31 December 2020. The purpose of this written ministerial statement is to set out how the UK intends to approach these, as well as a limited number of discrete areas for review to ensure relevant regulations remain appropriate for the UK financial sector. Today I would like to update Parliament on how the UK intends to approach these in the immediate term.
Last year, HM Treasury launched the Financial Services Future Regulatory Framework Review, a long-term review looking at how the UK’s regulatory framework needs to adapt to the future and in particular to the UK’s position outside of the EU. The next phase of the review will look at how financial services policy and regulation are made in the UK, including the role of Parliament, the Treasury and the financial services regulators, and how stakeholders are involved in the process. HM Treasury will consult on its approach to the next phase of the review in the second half of this year.
In the Queen’s Speech on 19 December 2019, the Government also announced their intention to bring forward a Financial Services Bill in order to deliver a number of existing Government commitments and to ensure that the UK maintains its world-leading regulatory standards and remains open to international markets. The Financial Services Bill will deliver our commitments to: long-term market access between the UK and Gibraltar for financial services firms based on shared, high standards; and simplified process which allows overseas investment funds to be sold in the UK.
In general, consistent with the UK’s position as a major international financial hub, the Government intend to implement immediate reforms in line with existing expectations of the industry and the approach of the EU and other international partners where relevant. Naturally there will be some defined areas where it is appropriate for the UK—as a large and complex financial services jurisdiction—to take an approach which better suits our market, while remaining consistent with international standards.
Today’s announcements provide clarity to all stakeholders about the UK’s legislative plans for the near future in relation to these forthcoming reforms, in relation to updating prudential requirements; maintaining sound capital markets; and, managing future risks.
Updating prudential requirements
The features that distinguish the UK as a leading global financial centre—openness, safety and transparency, innovative and resilient markets—are also in part anchored in international standards for financial regulation that the UK has had a significant hand in designing. Through organisations such as the G20, Financial Stability Board (FSB), and the Basel Committee on Banking Supervision, the UK has led the way in a number of key reform areas. Harmonised international standards are key to promoting the openness and resilience underpinning the UK’s sector.
The UK played a pivotal role in the design of EU financial services regulation. The Government remain committed to maintaining prudential soundness and other important regulatory outcomes such as consumer protection and proportionality. However, rules designed as a compromise for 28 countries cannot be expected in every respect to be the right approach for a large and complex international financial sector such as the UK. Now that the UK has left the EU, the EU is naturally already making decisions on amending its current rules without regard for the UK’s interests. We will therefore also tailor our approach to implementation to ensure that it better suits the UK market outside the EU.
The Government have previously announced their intention to use the Financial Services Bill to legislate to enable the implementation of a new prudential regime for investment firms and to update the regulation of credit institutions, including the implementation of the international Basel III standards. HM Treasury has today set out more detail on our legislative approach to prudential regulation in the document “Prudential standards in the Financial Services Bill: June update”. In particular, the Government intend to introduce updated prudential standards in a flexible and proportionate manner, as called for by industry and the House of Lords EU Affairs sub-committee. The Government intend to do this by delegating responsibility for firm requirements to the relevant regulator—the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA)—subject to an enhanced accountability framework to ensure that the regulators have regard to competitiveness and equivalence when making rules for these regimes. Both the PRA and the FCA will set out further details on the substance of the proposed regimes in due course.
To minimise uncertainty, the Government and the Regulators propose to introduce the new Investment Firms Prudential Regime (IFPR) and updated rules for credit institutions in line with the intended outcomes of the EU’s Investment Firms Regulation and Directive, and the second Capital Requirements Regulation respectively for the IFPR, the June update further clarifies that the Government and the PRA do not intend to require PRA-designated investment firms to re-authorise as credit institutions, unlike the EU regime. It also clarifies that the Government do not intend to require FCA-regulated investment firms to comply with the requirements of the fifth Capital Requirements Directive (CRDV) in the period until the new IFPR applies. A consultation on our transposition of CRDV will take place in July.
During the transition period, and under the terms of the withdrawal agreement, the Government will implement EU legislation that requires transposition before the end of 2020. This includes the transposition of the fifth Capital Requirements Directive (CRDV), and the Bank Recovery and Resolution Directive II (BRRDII) by 28 December 2020. BRRDII makes amendments to the original 2014 Bank Recovery and Resolution Directive (BRRD) provisions, in order to update the EU’s resolution policy and minimum requirements for own funds and eligible liabilities (MREL) framework.
However, HM Treasury is considering how best to implement aspects of files that do not come into force until after 31 December 2020. Given some of these changes do not come into force until the UK has left the transition period, it is right that the UK exercises its discretion when implementing these files.
For example, while we are committing to transposing most aspects of BRRDII, HM Treasury has considered how to ensure that it suits the UK market and we have today published a consultation document setting out more detail on this. In our transposition of BRRDII we are not intending to transpose the requirements in the directive that do not need to be complied with by firms until after the end of the EU Exit transition period, in particular Article 1(17) which revises the framework for MREL requirements across the EU. MREL is the minimum amount of equity and debt that a firm must maintain to absorb losses and provide for recapitalisation, in the event of resolution. The purpose of MREL is to ensure that investors and shareholders, and not the taxpayer, absorb losses when a firm fails. The UK already has in place a MREL framework in line with international standards. BRRDII states that the deadline for institutions and entities to comply with end-state MREL requirements shall be 1 January 2024. Given this is after the end of the transition period, it is right that the UK exercises its discretion about whether to transpose those requirements.
The Government also plan to bring forward a review of certain features of Solvency II to ensure that it is properly tailored to take account of the structural features of the UK insurance sector. The review will consider areas that have been the subject of long-standing discussion while the UK was a member state, some of which may also form part of the EU’s intended review. These will include, but are not limited to, the risk margin, the matching adjustment, the operation of internal models and reporting requirements for insurers. The Government expect to publish a call for evidence in autumn 2020.
Maintaining sound capital markets
Under the terms of the withdrawal agreement, the Government will implement EU legislation that comes into force before the end of the transition period. The EU is in the process of implementing a range of provisions on capital markets, with some aspects applying before and after the end of the transition period. HM Treasury has considered how to take forward this legislation in the way that is to the benefit of the UK sector, while maintaining high regulatory standards
The Government are committed to regulation that supports and enhances the functioning of UK capital markets. It will therefore consider the future approach to the UK’s settlement discipline framework, given the importance of ensuring that regulation facilitates the settlement of market transactions in a timely manner while sustaining market liquidity and efficiency. As such, the UK will not be implementing the EU’s new settlement discipline regime, set out in the Central Securities Depositories Regulation, which is due to apply in February 2021. UK firms should instead continue to apply the existing industry-led framework. Any future legislative changes will be developed through dialogue with the financial services industry, and sufficient time will be provided to prepare for the implementation of any new future regime
Additionally, the UK will not be taking action to incorporate into UK law the reporting obligation of the EU’s securities financing transactions regulation for non-financial counterparties (NFCs), which is due to apply in the EU from January 2021. Given that systemically important NFC trading activity will be captured sufficiently through the other reporting obligations that are due to apply to financial counterparties, it is appropriate for the UK not to impose this further obligation on UK firms.
In addition to these measures set out above, HM Treasury will continue to maintain a global outlook on regulatory best practices, regardless of where those practices come from. This approach will continue to be guided by a commitment to maintaining high standards and achieving the same or better prudential outcomes as today, in the way that works best for the UK. HM Treasury plans to set out further detail on upcoming legislation in due course, which will include:
Amendments to the Benchmarks Regulation to ensure continued market access to third country benchmarks until end-2025. HM Treasury will publish a policy statement in July 2020;
Amendments to the Market Abuse Regulation to confirm and clarify that both issuers and those acting on their behalf must maintain their own insider lists and to change the timeline issuers have to comply with when disclosing certain transaction undertaken by their senior managers (‘Persons Discharging Managerial Responsibilities’);
Legislation to improve the functioning of the PRIIPs regime in the UK and address potential risks of consumer harm in response to industry and regulator feedback. HMT will publish a policy statement July 2020; and
Legislation to complete the implementation of the European Market Infrastructure Regulation (REFIT) to improve trade repository data and ensure that smaller firms are able to access clearing on fair and reasonable terms.
Managing upcoming risks
HM Treasury has today also published a written statement relating to LIBOR transition. The statement sets out detail on the Government’s approach to legislative steps that could help deal with ‘tough legacy’ contracts that cannot transition from LIBOR before end-2021. In particular the Government will use the Financial Services Bill to introduce amendments to the Benchmarks Regulation 2016/1011 as amended by the Benchmarks (Amendment) (EU Exit) Regulations 2018 (the ‘UK BMR’), to ensure that FCA powers are sufficient to manage an orderly transition from LIBOR.
[HCWS309]
Contingent Liability
Rishi Sunak Excerpts(3 years, 10 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
The Monetary Policy Committee (MPC) of the Bank of England decided at its meeting ending on 17 June to ask for an expansion in the maximum limit of purchases that may be undertaken by the Asset Purchase Facility (APF). This will encompass up to £100 billion of further purchases of gilts to support the economy.
In light of the latest economic conditions, the MPC judged further asset purchases financed by the issuance of central bank reserves should be undertaken to enable the MPC to meet its statutory objectives, and thereby support the economy. I have therefore authorised an increase in the total size of the APF of £100 billion. This will bring the maximum total size of the APF from £645 to £745 billion.
In line with the requirements in the MPC remit, the amendments to the APF that could affect the allocation of credit and pose risks to the Exchequer have been discussed with Treasury officials. The risk control framework previously agreed with the Treasury will remain in place, and HM Treasury will keep monitoring risks to public funds from the Facility through regular risk oversight meetings and enhanced information sharing with the Bank.
There will continue to be an opportunity for the Treasury to provide views to the MPC on the design of the schemes within the APF, as they affect the Government’s broader economic objectives and may pose risks to the Exchequer.
The Government will continue to indemnify the Bank and the APF from any losses arising out of, or in connection with, the Facility. If the liability is called, provision for any payment will be sought through the normal supply procedure.
A full departmental Minute has been laid in the House of Commons providing more detail on this contingent liability.
[HCWS303]
Coronavirus Job Retention and Self-Employment Income Support Schemes
Rishi Sunak Excerpts(3 years, 11 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Following my announcement last week, I am pleased to share more detail on the next steps for the coronavirus job retention scheme (CJRS) and self-employment income support scheme (SEISS).
CJRS was launched to protect jobs and help employers through this unprecedented crisis. By midnight on 31 May more than 8 million jobs had been protected which would otherwise have been at risk. More than 1 million firms have benefited from this support.
I announced on 12 May that the CJRS would be extended until the end of October. This means the scheme will now be in place for a full eight months, giving businesses the vital support that they need during this unprecedented time. As we now begin to reopen the economy, it is right that state support is slowly reduced and the focus shifts to getting furloughed employees back to work.
From 1 July, employers will have the flexibility to bring back their furloughed employees for any amount of time and any shift pattern, giving businesses more flexibility to respond to demand as the economy reopens. Employers will be able to claim the furlough grant for the proportion of the employees’ normal hours they are not working. Employers must pay their employees for the hours they are working, subject to their employment contract, and will be required to report data on hours worked by an employee and the usual hours an employee would be expected to work in a claim period under the scheme for furloughed employees.
As a result, from 1 July, there will be no minimum furlough period; that is, no minimum amount of time that an employee can be on temporary leave. However, any furlough arrangement agreed between employer and employee and reported in a claim to HMRC must still cover a period of at least one week.
To enable this change on 1 July, the CJRS will be closed to new entrants on 30 June. This means employees furloughed for the first time must be placed on furlough on or before 10 June in order to access flexible furlough, in order for the three week minimum period to have been completed by 30 June. All employers planning to claim a grant from 1 July must have completed their first claim (for the period ending 30 June) by 31 July.
In June and July, nothing will change for employers and the Government will continue to pay 80% of people’s salaries. From August, the level of the grant will be slowly reduced and employers will be required to top up the Government payment to ensure employees receive 80% of their normal pay, up to a monthly cap of £2,500, throughout. In August, employers will be asked to pay employer NICs and pension contributions; in September employers will also pay 10% of wages to make up the 80% total, up to a cap of £2,500; in October, employers’ contribution will increase to employer NICs and pension contributions and 20% of wages, up to a cap of £2,500.
An early assessment of CJRS claims suggest that around 40% of employers have not made a claim for employer NICs costs or employer pension contributions and so will be unaffected by the change in August if their employment patterns do not change.
Detailed guidance on these changes will be published on 12 June.
The SEISS opened on 13 May—days ahead of schedule—and eligible individuals will still be able to apply for the first grant until 13 July. By midnight on 31 May, 2.5 million self-employed individuals had already applied for grants, worth £7.2 billion in total.
The SEISS will be extended and eligible individuals could now qualify for a second and final grant.
The extension of the SEISS now means eligible individuals whose businesses are adversely affected by coronavirus will be able to claim a second and final taxable grant when the scheme reopens for applications in August. Individuals will be able to claim a taxable grant worth 70% of their average monthly trading profits, paid out in another single instalment covering three months’ worth of profits, and capped at £6,570 in total. This is in line with changes to the CJRS as the economy reopens and the eligibility criteria remain the same for this final grant.
An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by coronavirus in this later phase.
Further guidance will be published on 12 June.
[HCWS267]
Treasury
Rishi Sunak Excerpts(3 years, 11 months ago)
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Rishi Sunak
My right hon. Friend the Chief Secretary to the Treasury speaks regularly to his counterparts in the devolved Administrations, and we engage with them regularly. I am pleased to say that more than £8 billion of Barnett consequentials has been provided to devolved Administrations across the UK as they have also responded to the virus, and that will continue to be the case. We will get through this as one nation, all together.
[Official Report, 12 May 2020, Vol. 676, c. 147.]
Letter of correction from the Chancellor of the Exchequer:
An error has been identified in the response I gave to the hon. Member for Newport West (Ruth Jones).
The correct response should have been:
Rishi Sunak
My right hon. Friend the Chief Secretary to the Treasury speaks regularly to his counterparts in the devolved Administrations, and we engage with them regularly. I am pleased to say that more than £6.8 billion of Barnett consequentials has been provided to devolved Administrations across the UK as they have also responded to the virus, and that will continue to be the case. We will get through this as one nation, all together.
Covid-19: Economic Package
Rishi Sunak Excerpts(3 years, 11 months ago)
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Anneliese Dodds (Oxford East) (Lab/Co-op) [V]
To ask the Chancellor of the Exchequer if he will make a statement on the Government’s economic package in response to the covid-19 outbreak.
The Chancellor of the Exchequer (Rishi Sunak)
Thank you, Mr Speaker, for your warm wishes.
This Government’s plan is one of the most comprehensive anywhere in the world. We have provided billions of pounds of cash grants, tax cuts and loans for over 1 million businesses, tens of billions of pounds of deferred taxes, income protection for millions of the self-employed, and a strengthened safety net to protect millions of our most vulnerable people. These schemes speak to my and this Conservative Government’s values. We believe in the dignity of work, and we are doing everything we can to protect people currently unable to work.
Yesterday my right hon. Friend the Prime Minister set out our plan for the next phase of the public health response, and today I can confirm the next stage of our job retention scheme. This scheme has been a world-leading economic intervention, supporting livelihoods and protecting futures. Seven and a half million jobs have been furloughed—jobs we could have lost if we had not acted—and nearly 1 million businesses supported who could have closed shop for good.
As we reopen the economy, we will need to support people back to work. We will do so in a measured way. I can announce today that the job retention scheme will be extended for four months, until the end of October. By that point, we will have provided eight months of support to British people and businesses. Until the end of July, there will be no changes whatsoever, from August to October the scheme will continue for all sectors and regions of the UK, but with greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part time. We will ask employers to start sharing with the Government the cost of paying people’s salaries.
Full details will follow by the end of May, but I want to assure people today of one thing that will not change: workers will, through the combined efforts of the Government and employers, continue to receive the same level of overall support as they do now, at 80% of their current salary, up to £2,500 a month.
I am extending the scheme because I will not give up on the people who rely on it. Our message today is simple. We stood behind Britain’s workers and businesses as we came into this crisis and we will stand behind them as we come through the other side.
Mr Speaker
I now call Anneliese Dodds, who is speaking virtually. I ask her to speak for no more than two minutes.
Anneliese Dodds
Thank you, Mr Speaker, for granting this urgent question. I would also like to wish the Chancellor many happy returns.
As a constructive Opposition, we want to work with the Government to ensure that people’s jobs and incomes are protected and the furlough scheme is a critical element of that. Many of the more than 6 million people who are currently furloughed were taken aback by comments made in the media by Government spokespeople suggesting that, for example, people needed to be weaned off an addiction to the scheme. There were many intimations that changes might have been announced to that scheme by the Chancellor, potentially in the media, without the opportunity for proper scrutiny.
I have only heard about these changes in the last few seconds. We will look at them very carefully, but there are some critical principles that the Chancellor surely must follow as he redesigns the scheme.
First, we must acknowledge that people did not want to be furloughed. It occurred through no choice of their own and through following the Government’s advice about the closure of sectors. It is critically important that they are not penalised for that choice.
I welcome the flexibility mentioned. We have asked for that repeatedly; it applies in many other countries. It has been a long time coming, but I welcome the fact that it is occurring now.
That flexibility includes an employer contribution, so the Chancellor needs to provide more information about that employer contribution now. He also surely needs to provide more information about alternatives to the scheme. Other countries have job creation, training schemes and redeployment schemes. We do not have those yet. Will the Chancellor work with me, trade unions, businesses, local authorities and further and higher education institutions to create the support that is so desperately needed?
Rishi Sunak
I thank the shadow Chancellor for her warm wishes and for the constructive support for today’s announcement. I will address two specific points that she raised. First, the word addiction is not one that I have ever used and it is not one that I agree with. Nobody who is on the furlough scheme wants to be on the scheme. People up and down the country believe in the dignity of their work, of going to work and providing for their families. It is not their fault that their business has been asked to close. It is not their fault that they have been asked to stay at home. That is why I established the scheme to support those people and their livelihoods at this critical time. I wholeheartedly agree with the shadow Chancellor in that regard.
On the next steps, I am pleased to tell her that I have already been talking to the TUC and, indeed, the CBI about the future; helping those people to get back into work who, unfortunately, may lose their jobs through this period. That issue weighs heavily on my mind. Every person who loses their job through this difficult period is a person the Government are determined to stand behind, whether that is with new skills, new training or indeed through supporting businesses to create new jobs. We are determined to make sure that that happens. I look forward to continuing my conversations with Opposition Members and with the trade unions, the CBI and other business groups as we look forward to a brighter future. As we get through this crisis, people can come back to work and we can create the jobs and opportunities, and a brighter future for tomorrow.
Mel Stride (Central Devon) (Con) [V]
I broadly welcome the statement the Chancellor has made relating to furlough and, in particular, the additional flexibilities that he has outlined, most notably about part-time working. However, as we come through this crisis, many businesses will be saddled with significant debts just at the time that we are looking to those businesses to invest and to grow the economy. Does he therefore agree that it is vital that the Government come forward as soon as possible with a clear plan as to how they are going to assist those companies with that indebtedness in terms of debt forbearance and equity finance so that they can fire up the economy and grow the jobs that the country will so desperately need?
Rishi Sunak
As always, my right hon. Friend makes an excellent point. I agree that debt is not the answer to all businesses’ problems at this time, which is why we have provided business with unprecedented degrees of direct cash support, with cash grants of £10,000 or £25,000 for up to 1 million businesses and 750,000 businesses benefiting from a cut in their business taxes and tax deferrals. All of that will help. With regard to equity in supporting the future, I hope he will agree that the Future Fund that we have announced will be part of that solution, with the Government matching essentially quasi-equity investments in early-stage companies to ensure that they are here to power the growth and innovation we will need as we recover from this crisis.
Alison Thewliss (Glasgow Central) (SNP) [V]
I wish the Chancellor a very happy birthday. The coronavirus job retention scheme has kept people from unemployment at a cost to other parts of the UK Government’s spending and to the economy as a whole. I welcome his commitment to extend it to October and to look at flexibility in the scheme, because that is something that many, including the Scottish National party, have been calling for. We await the details of that, which I hope we will see before too long. Does he recognise that removing or reducing wage support levels in the furlough scheme prematurely would increase universal credit claims, force workers back to work before it is safe for them, and risk a second peak? The Scottish Government have been clear that the stay-at-home advice has not changed, so will the Chancellor commit today to ensuring that the job retention scheme will remain in place in Scotland, Wales and Northern Ireland if our lockdowns continue longer than in England? Lastly, will he commit to looking at the gaps within the scheme for new starters, and will he look at those businesses who are still waiting for money under the scheme, because he said that he would do whatever it takes, and if he does not fill those gaps, that will ring very hollow?
Rishi Sunak
I thank the hon. Lady for her warm wishes as well. To clarify, there will be no reduction in the level of support for those on the scheme. That is the commitment that I made earlier, so I am not entirely sure whether I understood her question right. It is crystal clear that those on the scheme have the reassurance that the level of support they will receive will not be changed. Those wages and support will now be shared by the Government and employers, but the levels and percentages of support will not change. I committed to bringing forward further details by the end of this month, while we work through some of the technical details of implementing part-time furloughing. As I said at the outset, this is now an extension for four months to the end of October, which will provide eight months of support in total to all regions and all sectors of the United Kingdom. I think it provides a good, generous runway for businesses and firms to plan against, so that they can start getting back to work when the time is right, as per the Prime Minister’s plan that was outlined on Sunday and Monday.
Ben Everitt (Milton Keynes North) (Con) [V]
We know that international comparisons should be made carefully, but I note that polling released yesterday showed that the UK is considered the best in the world for supporting businesses and jobs during the crisis, so what steps is the Chancellor taking to ensure that this success is continued for companies in Milton Keynes and elsewhere as we gradually come out of the lockdown?
Rishi Sunak
I thank my hon. Friend for mentioning that. He is indeed right. I was pleased to see polling that showed that people in this country felt that businesses were well supported, as compared with almost any other developed country. Indeed, the full scale of the economic intervention that we have put in place as a percentage of GDP stands as one of the most comprehensive anywhere in the world. I am very happy to continue listening to my hon. Friend to see what more we should be doing to support his businesses in Milton Keynes as they look forward to a future where they can start to reopen, start to get their employees back to work and start to rebuild our economy as we emerge from this crisis.
Caroline Lucas (Brighton, Pavilion) (Green) [V]
I welcome the continuation of the furlough scheme and its new flexibility to allow part-time work. That is vital for businesses in Brighton, particularly those in tourism and hospitality. Will the Chancellor consider further support to that sector by a reduction in VAT on tourism? It is a policy that many of his Government MPs support. Will he consider revising the self-employed scheme by including small business owners who take their income in dividends, as well as those who combine PAYE with freelance work?
Rishi Sunak
Those who work for their own companies can indeed avail themselves of the coronavirus job retention scheme for the PAYE part of their income already. With regard to support for the hospitality and leisure sector, I agree that it is the sector that has been most impacted by what we are all going through, which is why it is the sector that has received the most support, with cash grants of up to £25,000 for those businesses—almost a million are eligible—and an entire business rates holiday worth almost £12 billion for the entire 12 months of this financial year. I believe that to be considerable support, but, of course, as we emerge from this crisis I keep all economic measures under review.
James Daly (Bury North) (Con) [V]
May I thank the Chancellor for the speed with which he has managed to get so much money out to help my constituents in Bury? Does he agree with me that the coronavirus job retention scheme is one of the most generous in the world? I express my gratitude to him for supporting so many jobs in my constituency and throughout the country, many of which would have been lost without these schemes.
Rishi Sunak
I thank my hon. Friend for his support, and he is absolutely right. In Bury, as elsewhere, businesses have benefited from the support that the Government have put in place. They have been able to retain their employees through using the scheme. That means that Bury, when we get through this crisis, can be in the forefront of making sure that our economy bounces back as strongly as it can. I look forward to hearing from him what more we can do to support his constituents and his businesses through this crisis.
Kate Green (Stretford and Urmston) (Lab) [V]
The Mayor of Greater Manchester’s United We Stream initiative has raised thousands of pounds for our creative industries, which make a vital contribution to our economy and to socioemotional wellbeing. With the sector likely to be among the last to exit lockdown, and with many artists working on a freelance or self-employed basis, will the Chancellor confirm that full support will be given to that vital sector for as long as is needed?
Rishi Sunak
I know that my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport has engaged extensively with that sector as part of planning for a future where people can get back to work and sectors can reopen in a responsible and safe way. That work is already ongoing. Of course, many people in that sector are benefiting already from our self-employment income support scheme, which opens this week for applications. People will start receiving their lump sum payment as early as next week, and I know that will make an enormous difference to the many tens of thousands, if not hundreds of thousands of people who work in that sector and will benefit from that scheme.
Mrs Natalie Elphicke (Dover) (Con) [V]
May I too welcome the Chancellor’s announcement today on furlough? P&O and many ferry operators are benefiting from millions of pounds of support that the Chancellor has provided for furlough and freight. However, P&O, which is headquartered here in Dover, last night announced redundancy plans for more than a thousand jobs after its Dubai owners failed to provide the support that the company needs. Does the Chancellor agree with me that companies and their investors, such as Dubai, cannot simply rely on taxpayer handouts, but need to play their full part, investing and supporting British businesses and British jobs at this time?
Rishi Sunak
My hon. Friend is an excellent advocate for the freight industry and the importance of the port in her town, which does so much to help fuel the growth of our country. That is why I was pleased to extend support to the sector, to maintain our vital freight links.
My hon. Friend is absolutely right: as I said at the outset of this crisis, we are in this together—everyone has to play their role, and that means employers and companies as well doing their bit to support and protect their staff to the best of their ability and pitch in to help get through this crisis. I would be happy to talk to her further if there is more that she thinks we can do.
Shabana Mahmood (Birmingham, Ladywood) (Lab) [V]
Women are considerably more likely to be furloughed than men, and the disproportionate impact of covid-19 on our black, Asian and minority ethnic communities is already being investigated from a health perspective by Public Health England. Has the Chancellor assessed the equality impact of all his package of economic measures on women and our BAME communities? If so, will he publish that impact assessment?
Rishi Sunak
What is clear and emerging is that the sectors and people most impacted by the lockdown are disproportionately women, as the hon. Member mentioned, and those in lower-paid sectors, who probably are financially less resilient. That is why the scheme is so important in providing job and income security to millions of people. That is why today I have made the decision to extend the scheme, to maximise the possibility that those people will have a job to go back to. The hon. Member can rest assured that I keep a very careful eye on all the impacts of the scheme. I do believe that it is benefiting some of the most vulnerable in our society today.
James Sunderland (Bracknell) (Con)
The Chancellor will be aware of widespread concern about the future of our commercial airlines—not least in constituencies such as mine near Heathrow, Gatwick and other major hubs. The CEO of International Airlines Group appeared yesterday before the Transport Committee and made it clear that job losses at British Airways were only being considered as a direct result of the pandemic. What further support might be available from the Government for UK aviation?
Rishi Sunak
Companies in the aviation sector, like all others, can benefit from the considerable range of support measures already announced—indeed, I know that many companies in the sector are benefiting currently from the jobs retention programme. Of course, individual companies have the opportunity to engage with the Government on a bilateral basis, where that is appropriate, but it obviously would not be right for me to comment on those conversations.
Sir Edward Davey (Kingston and Surbiton) (LD) [V]
May I give the Chancellor a small birthday present by welcoming the extension of the furlough scheme and the greater flexibility for employees coming off furlough—not least because the Liberal Democrats have been campaigning for an almost identical package? But may I urge him yet again to look at those employees and self-employed who have not been helped at all and are in dire straits—people who have moved jobs, who were not on their employer’s payroll by mid-March? Will he consider the new starter scheme that I proposed in early April? Will he please review his refusal to properly help those self-employed people who operate from limited companies and who have just been cut adrift?
Rishi Sunak
The self-employment scheme in this country remains one of the most generous and comprehensive anywhere in the world. It was designed to provide support to those people who have a different pattern of working. As I have explained previously to the right hon. Gentleman, there is a difficulty in distinguishing the dividends that company directors earn from the dividends that anyone might earn through earning a passive share portfolio.
I have seen the proposals that the right hon. Gentleman and others have sent. Of course, my team and I have considered and are considering those, but that does not take away from the fact that what has opened this week is a scheme that will support millions of those in self- employment and enable them to receive the same level of support as those in employment, starting with cash coming into their accounts as early as next week.
Dame Cheryl Gillan (Chesham and Amersham) (Con) [V]
I congratulate my right hon. Friend on his announcement today, and also, in particular, on his handling of this crisis and the support he is providing to businesses and individuals during it.
Many of my constituents in Chesham and Amersham work for British Airways, which despite furloughing nearly 23,000 staff has been threatening to make over 12,000 staff redundant. Can my right hon. Friend send a clear message to British Airways today that with this extension it should now remove all threat of redundancy, which has been adding to the anxiety and stress of so many of its hard working and in many cases long-serving staff?
Rishi Sunak
Like my hon. Friend the Member for Bracknell (James Sunderland), my right hon. Friend the Member for Chesham and Amersham (Dame Cheryl Gillan) is right to advocate for and support her constituents employed by the airline industry, and she is right to urge employers to do the right thing at this difficult time. The Government have provided considerable support to companies to help them get through this crisis, and she knows what will benefit her constituents. I will continue to support her in those efforts to make sure that we can protect as many of those jobs as possible.
Kevin Brennan (Cardiff West) (Lab) [V]
Prynhawn da, Mr Speaker. The Chancellor has said that he is doing everything he can, but has he seen the New Starter Justice campaign for people who started or were due to start a new job after 28 February and are still cut adrift from any help from the Chancellor and his schemes? Why has he thrown this particular group of hard-working British people under the bus?
Rishi Sunak
When we announced the job retention scheme, I said clearly that it would apply for those of whom HMRC was aware on 28 February. We were able, while protecting the taxpayer against fraud, to extend that date to 19 March, the day before I made the announcement, which is reasonable, in the sense that without HMRC or the Government knowing whether someone was actually employed the scope for fraud would be considerable. I did not think it appropriate to expose the taxpayer to that.
That change to 19 March brought in 230,000 of the 350,000-odd people that the hon. Gentleman talks about. Yes, that left a number of people who could not be covered, but for a reason that I believe is defensible. The scheme is able to cover the 29.5 million people who were notified to HMRC on that date; indeed, 7.5 million of them are benefiting from it. We should not lose sight of that. The scheme is doing an enormous amount for several million people up and down this country.
Saqib Bhatti (Meriden) (Con) [V]
Time and again, the Chancellor has stepped up to ensure that our businesses have what they need to get through this difficult period, and I welcome the measures announced today. The bounce- back loan scheme is another example of the unprecedented interventions that the Chancellor has made and this has been unequivocally welcomed by organisations such as the Federation of Small Businesses. Can my right hon. Friend confirm that work is continuing to be done to ensure that we increase the number of accredited lenders that provide bounce-back loans so that we can make sure we are getting funds to those businesses that need them, wherever they may be?
Rishi Sunak
I thank my hon. Friend for his advice as we looked to design and improve our lending scheme. I very much value his direct links with business and his relaying that to me. If you will allow me Mr Speaker, I can update him and the House on the number of loans that have now been approved. I am pleased to say that more than a quarter of a million bounce-back loans have been approved—267,000—with over £8 billion of capital benefiting small and medium-sized companies up and down the UK. On top of that, 35,000 CBILS loans worth more than £6 billion have now been put out. Hundreds of thousands of businesses are benefiting from the loan schemes that my hon. Friend helped to implement, ensuring that they worked well and quickly for businesses.
Rosie Cooper (West Lancashire) (Lab) [V]
As a result of the loss of income through both fundraising and small service charges, many small and local charities will be struggling financially despite being heavily involved and active in the covid-19 response and in supporting constituents. When will the Chancellor issue guidance to local authorities on providing grants to charities that are in receipt of local charitable rate relief but have up to now been excluded from securing the £10,000 grants from the small business grants fund?
Rishi Sunak
Just over a week or so ago, we outlined plans for a top-up fund for local authorities worth more than £600 million nationally so that they could distribute further rate relief to the businesses that they thought were appropriate. Indeed, it would be up to those local authorities to make the decisions and they could well use the money for that purpose if they so wished.
We also unveiled a £750 million package to support charities through this crisis. They are an important part of the social fabric of our country. Charities are impacted in the same way that businesses and the rest of us are, and it is important that we maintain them through this crisis, not least for the valuable work that they do on the front line, but also for the contribution they make to our civic society as we come out of this.
Bob Seely (Isle of Wight) (Con) [V]
The Isle of Wight is Britain’s festival island, and we have a unique tourism sector that is supported by events in the arts, music and sport. Will the Chancellor confirm that the furlough extension will help islanders in that devastated part of the economy? Will Ministers meet me, and others, to discuss how we can further protect the visitor and festival economy, which relies on specific parts of the year, and sometimes only on weekends, to generate an entire annual livelihood?
Rishi Sunak
Let me start by conveying the thanks of the whole House, and certainly of the Government, to my hon. Friend’s constituents for the role that they are playing in trialling the new app. That will be important as we look to gain control of this virus in the second and third phase of our approach to tackling it. Will he please pass on our thanks to all his constituents? I reassure him that they are very much in our minds. We know that the sector he mentioned is struggling and will need support. The document that the Government published yesterday spoke about creating an industry taskforce, and I look forward to working with my hon. Friend, and others, as we chart a future for those in the leisure, hospitality and tourism sectors.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP) [V]
The all-party group for disability, which I chair, believes it is crucial that the Chancellor accelerates efforts to include people with disabilities in the economic recovery plan, enabling a disability-inclusive covid-19 response. Will he address that issue by undertaking an impact assessment of the economic recovery plan, based on equalities principles?
Rishi Sunak
The Government and the Treasury will, of course, undertake all appropriate equalities and disabilities assessments for policies as they are unveiled and as is required. I have talked about this issue in the past with the hon. Lady, and the Budget outlined something that she and I care very much about, which is the Changing Places campaign for those with complex disabilities. We created a fund to help local authorities and businesses to adapt or build new changing places that will benefit hundreds of thousands of those, especially young children, who suffer with complex disabilities, and who require different types of facilities so that they can enjoy time with their families out and about. I hope we can continue to work closely on that issue.
David Johnston (Wantage) (Con) [V]
I support the Chancellor’s bold move to extend the furlough scheme to October—[Inaudible.]
Judith Cummins (Bradford South) (Lab) [V]
Has the Treasury made an assessment of how many employers are currently topping up the wages of furloughed workers to full pay? If the Government reduce the amount they are contributing, many employers may struggle to top up wages. What will the Government do if employers cannot top up wages?
Rishi Sunak
As well as the furlough scheme, the Government have provided direct cash support to businesses in the form of cash grants or tax cuts, and allowed them to defer taxes such as VAT. We have also provided them with access to discounted and attractive loans to ease cashflow. I believe that in sum that represents a considerable amount of support for business, and we have now stretched and extended the furlough scheme to cover eight months. Sitting alongside the plan that the Prime Minister outlined, that will provide businesses with a generous and sufficient amount of time to help bring their employees back to work. Indeed, they will also benefit from the part-time flexibility to ramp up their operations.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I welcome the world-leading package of measures that we are providing to support livelihoods and businesses through this pandemic, which is helping a huge number of people in Runnymede and Weybridge. Aviation is crucial to my constituency due to our proximity to Heathrow, and many constituents have contacted me who are employees of not just BA but logistics firms and others associated with the aviation industry. Getting our planes flying again is crucial to our economy through air freight and just-in-time supply lines. Does my right hon. Friend agree that, in addition to direct support for the carriers and industry, we need to get planes flying again as soon as possible?
Rishi Sunak
I know that my hon. Friend is rightly focused on that issue for his constituents, given the location of his constituency. Of course, aviation has been impacted considerably by this, but he is right; the best way to help, in the end, is for us to find a way to control this virus, live with it and reopen those parts of our economy that are currently closed. That is the best long-term way to provide the support to the industry and his constituents that we all want to see.
Helen Hayes (Dulwich and West Norwood) (Lab) [V]
The extent of Government support available is of cold comfort to those who are still not receiving any support. New starters are being abandoned simply by accident of the date on which they happened to change jobs. Those workers could be helped if the Government would accept evidence of their employment in the form of a contract of employment. Many of these workers have paid taxes for years. Will the Chancellor reconsider his approach and take further action so that new starters are not left behind?
Rishi Sunak
I do not have much more to add to my previous answer, but for those who do not benefit from this scheme or others, we have taken significant action, investing several billion pounds in strengthening our safety net in this country. Whether it is through tax credits, universal credit, the local housing allowance or the hardship fund provided to local authorities, the most vulnerable in our society through this crisis are seeing considerable extra support from Government to help them get through.
Damian Green (Ashford) (Con) [V]
Like others, I am grateful to the Chancellor for his extension of the furlough scheme, which is a reverse birthday present from him to workers and firms in my constituency. He will want our brilliant creative industries to come out of this crisis intact, and he knows that many people working in them are freelancers or on short-term contracts. Can he give some hope to those producing world-class work, often in precarious circumstances, that their sector will survive and flourish again after this is all over?
Rishi Sunak
My right hon. Friend is absolutely right; the creative industries play an incredibly important part in our economy in this country, and they are also one of our great exports around the world and add to our soft power. He is right that we should do everything we can to preserve the jewel that is that industry. As I said, I am talking to my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport, who is engaged with that industry to find the safest way for those workers to get back to work. We all want to see that happen in a measured and safe way. He can rest assured that I am also thinking about it from an economic perspective and seeing whether our support schemes and everything else are optimised for that industry as we emerge from this recovery.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) [V]
The furlough scheme is hugely welcome, but it needs greater flexibility. I hear what the Chancellor says, but the Opposition have set out ways in which the furlough scheme arrangements could be adapted to include new starters who have just missed out without risking fraudulent payments. Will he give those proposals urgent and serious consideration?
Rishi Sunak
We did give consideration to proposals that we received and worked with our systems, which is why we were able to extend the date from 28 February to 19 March, the day before I made the announcement. To me, that is a reasonable and defensible date to choose. It is important not to underestimate the operational challenge of creating these schemes and ensuring that they work for people. As I said at the time, from announcement to the scheme going live was a matter of weeks. Thousands of people worked their socks off to make that happen, and several million people’s pay packets are now being supported because that all works. These things are not straightforward to do, and changing them and adding complexity to them will simply make it more likely that they do not work and that people have to wait a lot longer to get the support they desperately need at this time.
Jacob Young (Redcar) (Con) [V]
I welcome the fantastic announcement about the coronavirus job retention scheme, and thank my right hon. Friend for all that his Department is doing to support businesses in Redcar and Cleveland, with the CJRS, the coronavirus business interruption loan scheme and the new bounceback loans. Will he reassure me and employers in my constituency that this support will be kept under review so that it reaches the businesses that need it most?
Rishi Sunak
I can give my hon. Friend and constituency neighbour exactly that reassurance. I thank him for all that he is doing to support his businesses and constituents at this time. I very much welcome the advice that he has given me, as he has fed back what he is hearing on the ground from businesses in the north-east. He and I have a shared ambition to make sure that Teesside drives our economic recovery as we come out of this situation, and I look forward to continuing those conversations with him.
Kirsty Blackman (Aberdeen North) (SNP) [V]
Aberdeen has been hit by the double whammy of covid-19 and a massive drop in the oil price. Will the Chancellor tell us when he last had a conversation with the industry, and will he please give consideration to announcing sector-specific support in order to protect my constituents and those in other regions where employment is centred around oil and gas?
Rishi Sunak
Regardless of the industry in which companies operate, they are able to benefit from our furlough scheme. That is something that we were keen to do. It is not necessarily replicated by every scheme around the world, but we thought that that comprehensive approach was the appropriate one. Many of the companies that the hon. Lady mentioned will be able to benefit from that scheme. Beyond that, my right hon. Friend the Business Secretary engages regularly with all sectors regarding their particular concerns, and I will continue to liaise closely with him.
Neil O’Brien (Harborough) (Con) [V]
I strongly welcome the extension of the job retention scheme. It is the most generous in the world, and is saving a huge number of jobs here in Harborough, Oadby and Wigston. One of the great successes of policy in recent years has been a huge reduction in youth unemployment, but the virus is inevitably going to disrupt a lot of apprenticeships and work placements. Is my right hon. Friend thinking hard about how we can limit or stop any rise in youth unemployment?
Rishi Sunak
My hon. Friend is absolutely right. I know that he has put a lot of thought into this particular issue, and I look forward to hearing his ideas on it. As we emerge from this situation, we need to be cognisant of having the right support available for those who are most affected by this issue, especially those who are young and entering the labour force for the first time who will face this challenge, but also younger people who work in the disproportionately affected sectors of retail and hospitality; and that support might include skills, retraining and a dynamic labour market. This is about the economic impact on us all, and especially on those individuals; not having a close connection with the labour market at that early stage in their life is very damaging for their long-term prospects. I look forward to working with my hon. Friend to ensure that that does not happen.
Jack Dromey (Birmingham, Erdington) (Lab) [V]
If 800,000 businesses have benefited from the welcome job retention scheme, the 800,000-strong world-class automotive industry will be key to recovery, including Jaguar Land Rover, whose Jaguar factory lies at the heart of my constituency of Erdington. Does the Chancellor recognise that the continuation of the job retention scheme for as long as is necessary, together with welcome measures to help companies that are deeply in debt and battling with liquidity, will be crucial for the future, providing the necessary certainty upon which businesses, workers and trade unions can plan to rebuild?
Rishi Sunak
I think I find myself in agreement with the hon. Member. He is fortunate to have such a fantastic company locally to him. I know that that company and its workers will be pleased that the Government, and their representative, are advocating on their behalf. We have extended some of our loan schemes for larger companies—not Jaguar Land Rover specifically—and many companies in the automotive supply chain, for example, will now be able to benefit from our larger CBILS programme, which went live last week and is already lending billions of pounds. The hon. Gentleman is right; these various schemes are important and the industry that he mentions is critical to the UK. I look forward to ensuring that it can have as strong and swift a recovery as possible.
Mr Mark Harper (Forest of Dean) (Con) [V]
I, too, welcome the announcement the Chancellor has made today. It will be particularly welcome to the businesses in the leisure, hospitality and tourism sector, which are very important in my area and have been very hard hit. I welcome the fact that the Chancellor has extended the scheme to October. Should businesses plan on that scheme coming to an end in October if we are able to stick to the timetable set out by the Prime Minister in the Government’s recovery strategy, or is there any chance that the Chancellor will be able to extend the scheme? I think some certainty for businesses will be helpful.
Rishi Sunak
We will of course keep everything under review, but my expectation is that by then the scheme should end. As I have said before, we have stretched and strained to be as generous as possible to businesses and workers. That is why we have made the decision we have made today, which is important to me personally, but of course as I have also said the scheme is expensive. It is the right thing to do—the cost of not acting would have been far higher—but it is not something that can continue indefinitely into the future. Eight months of total support is a considerable amount of time. Now that we have a plan from the Prime Minister, with a path to reopening those parts of our economy that are closed, I believe we can get the country back on track and get people back into work. This scheme will help them to do it in a measured and phased way, and protect as many jobs as possible.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC) [V]
Diolch yn fawr, Lefarydd. May I take the opportunity to wish penblwydd hapus to the Chancellor? In Wales, workplace restrictions have not been changed as many parts of the country have not yet passed the peak of infection. The economic taps must not therefore be turned off in Westminster before the public health emergency has subsided in Wales. Will the Chancellor ensure that the furlough scheme remains in place for as long as necessary and in such a form as to enable expert-led public health guidance to be followed in each nation?
Rishi Sunak
As I have just said, and have said previously, this is a UK scheme. It applies equally to all regions, nations and sectors of the country. It is generous in its length, extending all the way to October, and I believe that provides sufficient runway and support to businesses wherever they might be in this country. But I thank the right hon. Lady for her warm wishes.
Rob Roberts (Delyn) (Con)
I commend my right hon. Friend and the Treasury team for bringing together the economic support package that has given businesses and families across the UK the support they need during the lockdown. Obviously, it is one of the most comprehensive packages in the world and my constituents are pleased that when they needed help this United Kingdom Government had their back. Can my right hon. Friend assure me that the work is in progress so that businesses, particularly in the tourism sector, are prepared for when the lockdown restrictions are eased, as it is a significant element of Delyn’s economy?
Rishi Sunak
May I start by thanking my hon. Friend for everything he is doing not just for his constituents but in providing advice to me, using his own experience about how best we can support the economy and businesses at this time? I very much appreciate all the time and effort he has put into that and hopefully he can see the fruit of some of that work in the announcements that have been made. I can also give him that assurance on the tourism sector. That work is under way. The report talked about setting up a taskforce. I look forward to hearing his thoughts. I know how important it is to his constituency and others. The Culture Secretary and I look forward to engaging with him, creating a plan to make sure as many businesses as possible can safely open as soon as they can.
Richard Burgon (Leeds East) (Lab) [V]
Many minimum wage workers have been furloughed. They are now expected to get by on just 80% of the minimum wage, even though rents, bills and food prices have not fallen. Will the Chancellor implement guarantees, so that no furloughed worker is ever forced to live on less than 100% of the national minimum wage?
Rishi Sunak
The scheme, as it is designed, does provide income support of 80% of those wages. Indeed, where those wages are variable the scheme allows an average to be taken to benefit the employee. We have also strengthened the safety net, as I mentioned earlier. Crucially, employees who are furloughed are then able to work elsewhere as well to supplement their incomes. That flexibility is often unnoticed, but it is very helpful. I know many people are taking advantage of that to boost their incomes during this time and I think the scheme, as it is designed, provides the required support especially to those on the lowest pay.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op) [V]
The Chancellor has spoken about freelancers, who often work on short-term contracts or for personal service companies. In answer to the right hon. Member for Ashford (Damian Green), he talked about optimising the existing mechanisms for those people, but will he come forward today with the suggestion that there are concrete proposals in place? These are people with clear financial records and they often have accountants, so there is a track record. Will the Chancellor support these different types of self-employed people?
Rishi Sunak
They are being supported. The scheme to support them goes live tomorrow, ahead of schedule. Those who are self-employed whose returns and earnings we are aware of will be contacted, and are already being contacted. They are able to apply from tomorrow and will receive cash in their accounts for a three-month grant as early as next week. The scheme is one of the most generous in the world for those who are self-employed.
Steve Brine (Winchester) (Con)
Excellent birthday work on the furlough scheme from the Chancellor; the flexibility that is being added to it is very welcome. When he announced the original furlough scheme, many of us in this House and outside in the country talked about the self-employed and asked for parity. He then acted but, notwithstanding the issues that he knows I have with the people left out of the self-employment support scheme, that scheme will come to an end very shortly. To return to the call for parity, can we assume that he is working on an extension to the self-employed income support scheme? Many people will be listening carefully to what he says about that today.
Rishi Sunak
My hon. Friend has spoken passionately about this issue before, and I look forward to continuing conversations with him. I am of course keeping those measures under review. As I said at the time, there is of course parity in the level of support, but the nature of the schemes is different in the sense that employers who have been closed and have to make employment decisions, potentially 45 days in advance in respect of redundancies, do need to be treated slightly differently in that regard. I will of course continue to keep all things, including that scheme, under review.
Ellie Reeves (Lewisham West and Penge) (Lab) [V]
Women who are eligible for the self-employed income support scheme but have taken a period of maternity leave since 2016 could receive up to one third less financial support. This discriminates against women on lower incomes in particular, penalises families with young children, and exacerbates the gender pay gap. Will the Chancellor therefore exempt periods of maternity leave from the self-employed income support scheme calculations?
Rishi Sunak
People have ups and downs and variations in their earnings for all sorts of reasons, whether because of maternity, ill health or something else. To deal with that, we have provided an average of income over up to three years on a look-back basis, to smooth out all the ups and downs in all people’s incomes. That was something that stakeholder groups were keen to see at the beginning, it is something that we delivered, and I believe it provides the fairest way to treat everybody, on a level playing field, whatever their circumstances. A three-years averaging of earnings seems to me to be a reasonable approach to take.
Felicity Buchan (Kensington) (Con)
Does my right hon. Friend agree that we need an economic strategy that balances getting some businesses support when they cannot reopen with encouraging others to go back to work, and that today we have got that balance right?
Rishi Sunak
My hon. Friend is absolutely right: the plan that the Government and the Prime Minister have outlined does exactly what she says. For those who can go back to work now, they should do so in a safe way, as the Secretary of State for Business, Energy and Industrial Strategy will talk about later. As the rest of our economy reopens, people will have the benefit of a furlough scheme that extends all the way to October and provides for part-time flexibility. The combination of all those things means that my hon. Friend’s local businesses and many others can take the time that they need to get firing on all cylinders again.
Zarah Sultana (Coventry South) (Lab) [V]
It is estimated that the economic impact of the pandemic will hit the west midlands the hardest. It was announced this week that a manufacturer and supplier to Jaguar Land Rover in Coventry South has gone into administration, putting 600 jobs at risk. Will the Government therefore step up efforts to protect manufacturing jobs, especially in the automotive industry, and invest in them to provide green sustainable jobs for the future?
Rishi Sunak
I am very sorry to hear about the potential job losses in the hon. Member’s constituency. To me, every job lost during this period is heartbreaking, which is why I am doing my absolute utmost to provide the support that I can to protect as many as possible. I have said that clearly I cannot—and nor could any of us—save every single job or business, but the loans, the cash grants and the job retention scheme will all play a vital role in saving many millions of jobs and businesses, particularly in the automotive supply chain. The hon. Member is right that that is an important part of our economy, and it deserves our support to ensure that it can be a strong part of our recovery.
Andrew Griffith (Arundel and South Downs) (Con) [V]
The generous and unprecedented schemes that my right hon. Friend has put in place are doing a tremendous job, protecting thousands of employees, small businesses and the self-employed in my constituency. Many in West Sussex work in aviation, so in addition to heartily welcoming today’s extension of the excellent job retention scheme, may I ask him at least to consider temporarily suspending air passenger duty as well as testing passengers on arrival as an alternative to the 14-day quarantine, to help this vital sector of the economy?
Rishi Sunak
I thank my hon. Friend for his support and for the advice he has provided to me, with his extensive experience of business and of his constituency. He knows that I care deeply about the aviation sector. My right hon. Friends the Transport Secretary and the Foreign Secretary are considering the issues he raised. In particular, the Government have been clear that further detail on the quarantine measures will be outlined in due course, but I will pass on his suggestion.
Wendy Chamberlain (North East Fife) (LD) [V]
In North East Fife, much of the economy is seasonal and workers, who had contracts often agreed months in advance, face no income and no access to existing support. Fundraising for some golf caddies in St Andrews is under way and, although I applaud local community efforts and their generosity, rather than have the seasonal workforce rely on charity, what support can the Chancellor offer them this year so that they can return next year?
Rishi Sunak
Those who were in seasonal work can use an average of their earnings over a period for furlough payments, or indeed the same month on a year-over-year basis if that is a more generous way to calculate their eligibility. That is the most generous way to treat those in seasonal employment under the scheme and ensure that we reflect their earnings appropriately.
Mike Wood (Dudley South) (Con) [V]
These measures are exactly what manufacturing firms in Dudley South have called for as they start to reopen. Will the Chancellor undertake to work with our excellent Mayor, Andy Street, to ensure that the needs of west midlands manufacturing and its employees are fully considered as they start the task of rebuilding our economy?
Rishi Sunak
I can give my hon. Friend that reassurance. I look forward to speaking further to him and the excellent Mayor, Andy Street, as we all work together to drive the west midlands economy as part of the economic recovery plan. He, the Mayor and his businesses can play a leading role in that.
Marion Fellows (Motherwell and Wishaw) (SNP) [V]
I am glad that the Chancellor has confounded recent worrying rumours regarding the job retention scheme that caused grave concern to my constituents. Will he liaise with the Department for Business, Energy and Industrial Strategy to ensure that workers are not forced back to work in dangerous conditions, bearing in mind that the Health and Safety Executive has issued no enforcement actions as yet and that employers may struggle to pay the 20% he asks for while ensuring employee safety?
Rishi Sunak
My right hon. Friend the Business Secretary will be here shortly to provide a fuller answer to the hon. Lady’s question, but it is right that employees should not work in unsafe environments and we have put in place measures to ensure that that will not be the case, with updated guidance, risk assessments and increased resources for the Health and Safety Executive. The Business Secretary will update the House in more detail.
Craig Whittaker (Calder Valley) (Con) [V]
Mr Speaker, I hope you and your family are well.
About 19% of Calder Valley residents work in the manufacturing sector, and thousands of them are incredibly grateful for the Chancellor’s ingenuity around the furlough scheme. Will my right hon. Friend, on his birthday, confirm how today’s announcements on furlough will be a massive help to those manufacturers as they phase the return to work and deal with social distancing in the workplace?
Rishi Sunak
Manufacturing organisations in particular were keen to have the flexibility to bring employees back in shifts on a part-time basis while being able to furlough them for the remainder of the time as manufacturers ramp up operations, so I am pleased that we could deliver that flexibility today for the second part of the scheme. I think that that will be valuable to manufacturers in my hon. Friend’s constituency and help them get back up to speed as quickly as possible in a way that they can afford as well.
James Murray (Ealing North) (Lab/Co-op) [V]
Ranjith Chandrapala lived in Hanwell in my constituency, and he drove the 92 bus until three weeks ago, before he died of covid-19, leaving behind a loving family, including his daughter, Leshie. A week before Ranjith died, the Government announced a life assurance scheme for the families of health and care workers on the frontline during the covid-19 outbreak. Will the Chancellor commit to extending the scheme to other frontline workers and, in particular, to the families of bus drivers such as Ranjith?
Rishi Sunak
My heart goes out to the family of the hon. Gentleman’s constituent for what they have suffered. They, like many others up and down the country, are losing loved ones who are serving on the frontline. They deserve nothing but our admiration, respect and gratitude. I know that my right hon. Friend the Health Secretary has put in place a scheme to help those families who have lost loved ones during this crisis.
Aaron Bell (Newcastle-under-Lyme) (Con) [V]
I thank the Chancellor for all the schemes that he has introduced so far. In particular, I welcome the extension of the job retention scheme today. I wonder whether he is willing to look at a couple of aspects of the other schemes. There are two schemes in particular that would benefit from the introduction of a taper as, currently, there are cliff edges in support for both business grants and the self-employed income support scheme. It means that, in the case of two people in broadly equivalent positions, one could be entitled to support and one not. Would he be willing at least to consider the idea of a taper with these schemes?
Rishi Sunak
Introducing new measures to the schemes at this point would not be possible or desirable because it would just delay their operation. The problem with tapers is that there is still always an end point at the other end of the taper. With regard to the self-employment scheme, this covers 95% of all those who are self-employed, which is pretty comprehensive coverage. The 5% who are not covered have an average income of £200,000. Of course, there will be hard cases just the other side, but, on average, this is a group with relatively high earnings.
Mrs Flick Drummond (Meon Valley) (Con) [V]
I thank the Treasury for a very comprehensive set of measures for businesses and employers across the country, including those in my constituency of Meon Valley. Will my right hon. Friend tell me when further guidance on the discretionary grant funding will be announced because some councils are not happy with using their discretion? I believe, though, that the Treasury has made it perfectly clear from the start that the list was not exhaustive and that councils should use their own discretion.
Rishi Sunak
I thank my hon. Friend for her support. I think I am safe in saying that the guidance will be issued imminently. Of course there will be some broad guidelines on whom we think that support should be targeted at, but of course local authorities will have the ultimate discretion.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
Although I welcome the announcement on furlough, the Chancellor knows that the Government’s covid response would have completely stalled without local government, yet our councils are now financially on the brink. The extra funding does not cover all the costs, which is something that Ministers promised. Will he ensure that our councils are fully reimbursed for all covid-related costs and lost income and protect the sector that has protected us?
Rishi Sunak
In a moment of nostalgia, let me say that the hon. Gentleman and I have a shared passion for local government and an admiration for the work that they do, and I know that he will remain an advocate of theirs. They have been provided with more than £3 billion of extra support. Of course, we are in constant dialogue with local government, whether in social care or others, to ensure that they get the financial resources that they need.
Nigel Mills (Amber Valley) (Con) [V]
I thank the Chancellor for his announcement today, which is exactly what Amber Valley businesses have been asking for. Is there any way he can allow them to bring back some employees part-time, earlier than his extension, so that they can perhaps reopen their businesses next month rather than having to wait until a later date?
Rishi Sunak
That is a very fair question and one that I have looked at. There is an issue of operational complexity in designing the part-time aspect of the scheme in consultation with business and unions to ensure that we can enforce it properly. I think that the earliest that we can reasonably do it is in the extension period, as I mentioned. Of course, if there are ways for us to do that sooner, we will, but I would not want to commit to that today as it is a complicated thing to get right.
Ruth Jones (Newport West) (Lab) [V]
Yesterday I asked the Prime Minister about engagement with the devolved Governments in Wales, Northern Ireland and Scotland. I would like to try again today, and I hope receive a more detailed response from the Chancellor. Can he please outline what specific conversations he had with the devolved Administrations about these changes and when those conversations took place?
Rishi Sunak
My right hon. Friend the Chief Secretary to the Treasury speaks regularly to his counterparts in the devolved Administrations, and we engage with them regularly. I am pleased to say that more than £8 billion[Official Report, 2 June 2020, Vol. 676, c. 4MC.] of Barnett consequentials has been provided to devolved Administrations across the UK as they have also responded to the virus, and that will continue to be the case. We will get through this as one nation, all together.
Covid-19: Job Retention Scheme
Rishi Sunak Excerpts(3 years, 11 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
The Government’s economic plan is one of the most comprehensive in the world.
We have provided:
Billions of pounds of grants and loans for businesses
Tens of billions of pounds of deferred taxes
Income protection for millions of the self-employed
And a strengthened safety net to protect millions of the most vulnerable people.
These schemes speak to my and this Conservative Government’s values. We believe in the dignity of work. And we are doing everything we can to protect people currently unable to work.
Yesterday, my right hon. Friend the Prime Minister set out our plan for the next phase of the public health response. Today I can confirm the next stage of our jobs retention scheme.
The scheme has been a world-leading economic intervention, supporting livelihoods and protecting futures. Some 7.5 million jobs have been furloughed—jobs we could have lost if we had not acted. Nearly a million businesses who could have closed shop for good. And as we reopen the economy we will need to support people back to work. We will do so in a measured way.
I can announce the job retention scheme will be extended, for four months, until the end of October. By that point, we will have provided eight months of support to British people and businesses.
Until the end of July, there will be no changes whatsoever. From August to October the scheme will continue, for all sectors and regions of the UK, but with greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part time. And to change their incentives, we will ask employers to start sharing, with Government, the costs of paying people’s salaries.
Full details will follow by the end of May, but I want to assure people today of one thing that will not change: workers will, through the combined efforts of Government and employers, continue to receive the same overall level of support as they do now, at 80% of their current salary, up to £2,500. I am extending this scheme because I will not give up on the people who rely on it.
[HCWS229]
IMF’s Poverty Reduction and Growth Trust
Rishi Sunak Excerpts(3 years, 11 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
The Government have today augmented the UK’s 2010 agreement to lend to the International Monetary Fund’s poverty reduction and growth trust by a total of 2 billion special drawing rights (approximately £2.2 billion) to support economic recovery and response to covid-19 in the most vulnerable countries. This takes the total UK agreement to up to 4 billion special drawing rights (approximately £4.4 billion). A copy of the agreement will be deposited in the Libraries of both Houses in due course.
[HCWS228]
The Economy
Rishi Sunak Excerpts(4 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
Thank you, Mr Speaker, for giving me the opportunity to update the House on our economic response to the coronavirus. Let me say at the outset that I am grateful to Members from all parts of this House, including the hon. Member for Oxford East (Anneliese Dodds), the new shadow Chancellor, for their contributions to this debate.
We should be in no doubt about the seriousness of the economic situation. The Office for Budget Responsibility has published a scenario showing that the coronavirus will have very significant impacts, both at home and in the global economy. More than 1.5 million new claims have been made to universal credit, over 4 million jobs have now been furloughed, and survey evidence suggests that a quarter of businesses have stopped trading. These are already tough times and there will be more to come.
Although our interventions have saved millions of jobs and businesses, we cannot save every job and every business. I understand and share people’s anxiety, but right now the most important thing that we can do to protect our economy is to protect the health of our people. As my right hon. Friend the Prime Minister said this morning, we are making progress. We are beginning to turn the tide but, if we lose control of the virus again, we risk seeing a second spike, which we all want to avoid. The goal of our economic strategy is to provide a bridge over what will be a sharp and significant crisis by keeping as many people as possible in their existing jobs, supporting viable businesses to stay afloat and protecting the incomes of the most vulnerable. In other words, it is to maintain the productive capacity of the British economy, so that, once we are able to refine the public health restrictions, we can as quickly as possible get people back to work, businesses reopening and the self-employed trading again.
The Office for Budget Responsibility has been clear that, if we had not taken the actions that we have, the situation would be much worse. The International Monetary Fund has said that our approach has been “aggressive” and “right”. Taken together, I believe our response has been one of the most comprehensive of any country anywhere in the world. Working closely with the Bank of England, business groups, trades unions, banks, charities and many others around the country, we have developed a plan to protect public services, people and businesses.
Let me address each of those areas in turn. Public services such as the NHS are on the frontline of the fight against coronavirus. I repeat today that, whatever resources our NHS needs, it will get. At the Budget in March, I announced a coronavirus emergency response fund, initially allocating £5 billion. We have now provided more than three times that initial amount, with the NHS and public services receiving £16 billion so far.
We are also providing extensive support for people’s jobs and incomes. Our most important and far-reaching policy is the coronavirus jobs retention scheme to keep people in employment. The scheme launched on schedule last week, and I am pleased to report that the first grants have just been paid. Around half a million employers have already applied for help to pay the wages of over 4 million furloughed jobs—jobs that might otherwise have been lost.
Her Majesty’s Revenue and Customs is also on track to deliver the self-employed income support scheme, as promised in early June, and we will publish detailed guidance this week. Alongside those new interventions, we have strengthened our existing safety net with increases to universal credit, the local housing allowance and statutory sick pay. We have reinforced our social fabric, too, with £750 million for the charity sector.
Of course, the best way to support people is to protect their jobs, and that means supporting the businesses that employ them. Our plan to help businesses means the following: almost half of all business properties in England will pay no business rates this year; almost 1 million business premises can now receive cash grants of up to £10,000 or £25,000; and more than 2 million businesses have been offered a VAT deferral, saving them an average of £30,000.
Another 2.7 million people will be able to defer their self-assessment payments; almost 60,000 people and businesses have put “time to pay” arrangements in place with HMRC; up to 2 million employers will be able to access the statutory sick pay rebate, up to £48,000 per firm; more than £14 billion of lending has been issued through the Bank of England’s financing facility and more than 20,000 coronavirus business interruption loans have now been approved. Of course, all that is on top of our furlough scheme, with payments now arriving.
Taken together, our plans are protecting millions of people and businesses across our country, through a set of interventions in the economy on a scale that we have never attempted before, and they are working. However, I know that some small businesses are still struggling to gain access to credit. They are, in many ways, the businesses most exposed to the impact of the coronavirus, and often find it harder to access credit in the first place. If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through this crisis. Some businesses will not want to take on more debt, which is why our focus has been on cash grants, tax cuts and tax deferrals, but for others, loans will be part of the answer.
Today we are announcing a new micro-loans scheme, providing a simple, quick, easy solution for those in need of smaller loans. Businesses will be able to apply for new bounce-back loans, for 25% of their turnover, up to a maximum of £50,000, with the Government paying the interest for the first 12 months. I and the Economic Secretary to the Treasury have been in close talks with the banks, and I am pleased to say that those loans will be available from 9 am next Monday.
There will be no forward-looking test of business liability, and no complex eligibility criteria; there will be just a simple, quick, standard form for businesses to fill in. For most firms, loans should arrive within 24 hours of approval. I have decided that, for this specific scheme, the Government will support lending by guaranteeing to the lender 100% of the loan.
Let me address that point directly. I have heard calls for the Government to underwrite all our loan schemes with 100% guarantees, but I remain unconvinced by the case for doing that universally. We should not ask ordinary taxpayers of today and tomorrow to bear the entire risk of lending almost unlimited sums to businesses that in some cases may have very little prospect of paying those loans back, and not necessarily because of the impact of the coronavirus. I do not think it is appropriate to provide 100% guarantees on all of our schemes. Instead, these new bounce-back loans carefully target that extraordinary level of state support at those who need it most. The £50,000 cap balances the risk to the taxpayer with the need to support our smallest businesses.
Right now, the most important thing for the health of our economy is the health of our people. We are making progress in our fight against the virus, but we are not there yet. Our strategy is to protect people and businesses through this crisis, by backing our public services and NHS with increased funding, strengthening our safety net to support those most in need, and supporting people to stay in work and keep their businesses going. Our response is comprehensive, coherent and co-ordinated. It is, I believe, the right approach. I hope I can continue to rely on the support and advice of all right hon. and hon. Members as I commend this statement to the House.
Mr Speaker
I now welcome the new shadow Chancellor, Anneliese Dodds, who has five minutes to respond.
Anneliese Dodds (Oxford East) (Lab/Co-op)
I am grateful to the Chancellor for advance sight of his statement, and to all the Treasury civil servants, and those in HMRC and the Department for Work and Pensions, who have been working incredibly hard to get these schemes running. I fully appreciate that the Chancellor’s job has not been an easy one, but it is our job as a constructive Opposition to point to problems that we are hearing from the frontline, and to indicate solutions. It appears that at least some of those problems are more acute in our country than in many others.
The Purchasing Managers’ Index figures that came out last week indicated a sharp fall in business confidence. Sadly, that was not a surprise. It has been clear for some time that the economic slowdown we are currently experiencing is sharp and deep. It was, however, unsettling that those figures suggested that business confidence has taken a stronger hit in the UK than across the eurozone. I have heard from small business owners who put their life and soul into their firms, but have less than two weeks of cashflow left, and they are devastated. We all need to work together to get the different support schemes working for our country. We must fix this.
I am well aware that many of the conditions for shifting out of lockdown are not within the Chancellor’s grasp. However, his Government need to be open about blocks on progress and how they will remove them. That applies to the test, track and trace regime, which must be in place before key sectors can open again. It also applies to the creation of a national tripartite system to ensure that workers and employers have confidence that they can return to work safely when the right time comes.
The Chancellor is directly responsible for the economic package, and he knows that we supported him in creating the furlough scheme; indeed, we called for it. But the evidence is that some other key elements of the economic package are failing, so, in a constructive spirit, I want to ask the Chancellor whether he would countenance solutions in three areas—first, on CBILS. It is a relief to hear from the Chancellor that he has listened to calls from the Opposition, business and others that we need a full guarantee for at least some loans—he has stated those of up to £50,000—but we need to be clear that the UK has an enormous mountain to climb. Switzerland has a population of under 9 million, yet it approved four times as many loans in its first week as the UK has done in a month. We are running out of time, so how will the Chancellor ensure that the bounce-back loans get to the businesses that need them? How will they get out of the door, and what plans does he have to ensure that the banks will have the capacity to provide those loans?
Secondly, recent figures suggest that one in 10 in our workforce looks set to be unemployed as a result of this crisis, with all that that entails for people’s future prospects, incomes, and their and their families’ health. Again, I say to the Chancellor that we will work with him. We have indicated many of the gaps in existing schemes to protect incomes, and will continue to push for them to be filled. However, we must be clear: the reason that those gaps are such an income-crushing, insecurity-producing crisis for so many is that, in most cases, the only alternative to coverage by these schemes is universal credit, which pushes people right down to an average of 10% of the income of the rest of the workforce. The DWP has made some welcome changes, but failure to change the initial loan into a grant threatens to create even more of a debt crisis among households. Apparently the Government are sympathetic to changing the loan into a grant, but we are told that the computer system just will not allow it, so my second question is: will the Chancellor knock heads together and get the computers to say yes to switching UC loans into grants?
Finally, as the Chancellor knows, before this crisis we had an economy that simply did not work for so many. Around a quarter of all families lacked just £100 in savings, even before the crisis began. The UK is the most regionally unequal country in Europe, and we have just had the longest squeeze on living standards—not just in a generation, but in eight generations. The recovery from this crisis must be faster and wider to ensure that as many people as possible have a job to come back to. We need a flexible furlough scheme. The Chancellor told me previously that it cannot currently be made more flexible, but other countries have done so. Will he work to amend the furlough scheme to allow workers to come back on a part-time basis, and will he do as so many other countries are doing, from Germany to New Zealand, and talk about how those hit hard by the crisis can be supported not just now, but in the future, with employment-boosting redeploying retraining schemes? The aftermath of the pit closures tells us that an approach where the Government shrug their shoulders will scar our economy for generations to come, so my last question is: will the Chancellor work together with me, trade unions, businesses and local authorities to develop a plan to offer the hope of work to those who have already become unemployed, and get our economy moving again?
Rishi Sunak
May I welcome the shadow Chancellor to her place, and thank her for the constructive dialogue that I have had with her over the past two or so weeks? Let me address her questions directly and swiftly. First, I turn to her question about the loan guarantee programme and the banks’ operational capacity. Obviously, this is something that the Economic Secretary and I, working with the banks, have spent a lot of time on over the past few weeks. I am grateful to the banks for re-engineering their entire systems to offer this brand new bounce-back loan. I am assured that it will be available from next Monday morning. There will be a very simple application process, and the banks will not have to conduct more than the customary fraud and anti-money laundering checks, which of course would be reduced for their existing customers. If someone has an existing business account with a bank, the process should prove incredibly rapid, and they should have the cash in their bank account within a day or two. The banks are readying their systems for that launch date as we speak.
I hear a lot from many commentators that we should copy what was done in Switzerland. Now, Switzerland does have 100% guaranteed loans—I absolutely agree that it does—but it is worth bearing in mind that it does not provide very much else in the way of direct fiscal support for their businesses. Indeed, after extensive dialogue with the Swiss Government, it is very clear that, for them, the loan guarantee scheme is the primacy of their direct fiscal support to businesses. In this country, we have provided tens of billions of pounds in direct cash support—in tax cuts through reducing business rates, in cash grants of £10,000 or £25,000, and by paying people’s statutory sick pay bill. These very direct cash impacts, I believe, are more generous than asking companies to take on a loan, which is why I believe that the Switzerland comparison is not analogous. Secondly, the Switzerland furlough scheme requires employers to contribute a fifth of the payment to the scheme, whereas in this country, our furlough scheme removes that very considerable cash burden from businesses.
As I always say when I am at this Dispatch Box or answering questions elsewhere, it is important to look at the totality of all our economic interventions. When measured as a percentage of GDP, it is very clear to me, as has been empirically shown by others, that the sum total of our fiscal intervention to support businesses and people through this crisis is one of the most comprehensive and generous, in terms of scope and scale, anywhere in the world.
Turning to the next question—on universal credit and support for the most vulnerable—I firmly agree that during this crisis, we must of course look after the most vulnerable in our society, and from the Budget onwards, I have strived to do exactly that. We have invested extra funds into tax credits and into universal credit, improved eligibility for statutory sick pay, improved employment support allowance, improved how these schemes work for the self-employed, improved the local housing allowance and, indeed, created a brand new hardship fund for local authorities to help people with their council tax bills. All these investments have a sum total of over £7 billion of investment by this Government to strengthen the safety net to help the most vulnerable in our society through this difficult period.
Lastly, with regard to the future, I wholeheartedly believe that the best way out of this is to ensure that as many people as possible can return to the job that they had. That is the best way to protect people and to protect their livelihoods, their families and their household incomes, which is why all our support has been conducted with that aim in mind—how can we help to support businesses? How can we help them to keep their employees attached to that business? I believe that our furlough scheme stands at the centre of that. All the other interventions will help to support that aim so that as we emerge from this crisis, we can bounce back as quickly as possible to the life that we once knew.
Theresa Villiers (Chipping Barnet) (Con) [V]
The Government’s support package for jobs and wages is providing a vital lifeline for millions of families, but every day that the full lockdown continues, further damage is done to the economy, so can I ask the Government to publish a road map to release from the lockdown so that businesses can start to prepare for a phased modification and a safe exit from the current emergency measures?
Rishi Sunak
I agree with my right hon. Friend that, of course, the economic damage that is happening at the moment is severe, which is why we have taken the unprecedented measures that we have to try to mitigate as much of that as we can. Of course, I share with her—and indeed, the Prime Minister shares with her, as he said this morning—a sense of urgency to want to restart our economy, not least so that we can get people back into work and start creating the tax revenues that we need to pay for our public services, but we are not there yet. That is why we must remain disciplined and united around our aims and meet the tests that we have set to emerge from this phase of the crisis, but the Prime Minister also said this morning that we are making considerable preparations, and have been for a while, for phase two. In phase two, as he said, we will be able to gradually “refine” our
“economic and social restrictions and one by one…fire up the engines of”
our “vast UK economy”. I can assure my right hon. Friend that that work is ongoing. I remain committed to it and, as the Prime Minister said, the Government will be saying much more about this in the coming days.
Alison Thewliss (Glasgow Central) (SNP) [V]
I thank the Chancellor for advance sight of his statement. The SNP welcomes the money that he has committed, but we acknowledge the gaps and the limitations, and we constructively ask for actions in a number of areas: assistance for those waiting for confirmation of a universal credit claim; the ending of the five-week wait and the two-child limit; additional support for carers who may be forced to stop work; support for those caught in the new starter furlough gap; support, as the Scottish Government have already put in place, for the newly self-employed; support for limited company directors, who particularly feel as though they have been left out; removing the “no recourse to public funds” conditions, which leave people without support in many cases; helping asylum seekers whose support networks may have fallen apart; and ensuring that pregnant women who were wrongly sent home on statutory sick pay and unpaid leave in March get access to the furlough scheme.
The Chancellor talks about supporting viable businesses to stay afloat, but that viability is very much in the hands of the banks, who are making decisions on tight criteria. What is he doing to ensure fairness in that assessment? The bounce-back loan scheme that he announces is good and deferring can be useful, but many small businesses feel that it will just mean storing up more debt for the future. It is understandable that they may not want to take on more debt. Will he look at more grants, CBILS overdrafts and revolving credit to help those businesses through the current difficulties?
Will the Chancellor also look at assistance for food wholesalers who are keeping care homes and small shops supplied, and who are suffering because of the downturn in hospitality? He made no mention in his statement of the many businesses that shut their doors on public health advice and now find that their insurers refuse to pay out on business interruption claims. Will the Government step in to cover disputed claims? Businesses just do not have the time or the money to go through the Financial Ombudsman Service or the courts.
Rishi Sunak
I thank the hon. Lady for her constructive engagement with me and others as we go through this difficult time. With regard to helping the most vulnerable, we have put several measures in place that will help many of the people she mentioned—not least strengthening universal credit, as we have done by £1,000 over this year, and associated changes and tax cuts, as well as providing local authorities with discretionary funds to help those in their communities who, as they know better than any of us sitting here, are in most need of support. That will cover many of the groups that she talked about.
With regard to the banks and viability tests, the new bounce-back loan scheme will not ask for any forward-looking information from companies. There will be a very simple form for companies to fill in. It will be done on the basis of self-certification, and the banks will be doing customary fraud, money laundering and identity checks rather than any credit checks, given our 100% guarantee. That problem should, therefore, be solved.
I have also spent time talking to the banks, as has the Economic Secretary, tirelessly on a daily basis about the other forms of credit that they are extending to small businesses. The hon. Lady is right to point out that some businesses would prefer to have things such as overdrafts. In that vein, I am pleased to tell her that according to the last numbers I had, about 20,000 new overdrafts have been extended, together with about 60,000 capital repayment holidays. Of course, general SME lending happens outside CBILS or, indeed, our new bounce-back scheme. I can assure her that the Economic Secretary and I remain alive to that and will keep up all necessary pressure on banks to make sure that credit flows to where it needs to get to. Today, I am happy to put on record my thanks to them and their teams for helping us to work at pace to get the bounce-back loan scheme up and running for next Monday morning.
Lastly, the hon. Lady asked about insurance companies, and I think she is right to highlight this. I would point insurance companies and their policyholders to the very strong guidance set out in a letter by the FCA, which urged insurance companies to behave responsibly and flexibly in the interpretation of their policies. We have previously made it very clear: where there was a question about whether a policy should pay out, depending on whether we had closed the business as result of Government action, that was cleared up. Of course, very few people have policies that would cover them for this, but where it is clear that they should have a reasonable expectation of coverage, it is right that the insurance companies pay out. We will keep a close eye on the situation.
Andrea Leadsom (South Northamptonshire) (Con) [V]
I congratulate my right hon. Friend very sincerely on the bounce-back loans, which I think will make a huge difference to small businesses. I must also say how great it was to see the Prime Minister back on good form today.
Of course we need to keep the lockdown in place until it can be safely lifted, but will the Chancellor today give employers and entrepreneurs, who are the lifeblood of our economy, reassurance that when restrictions can be lifted, they will be given some notice and some clear guidelines so that they can restart their supply chains with confidence?
Rishi Sunak
I thank my right hon. Friend for her comments; having held the positions that she has had in government, she knows better than most the importance of business to our economy and to driving our economy. She is absolutely right that businesses will need time to prepare. As I have alluded to, work is already under way in government, through engaging with businesses, unions and others, to ensure that when we are in a position to get to phase 2 and refine the social and economic restrictions, work has already taken place to prepare everyone and give them suitable notice, so that they can kick-start the engines of our economy.
Sir Edward Davey (Kingston and Surbiton) (LD) [V]
I welcome the micro-loans scheme, but may I press the Chancellor to do more for the self-employed—in particular the self-employed who are not in his scheme, many of whom have only modest incomes, such as cleaners, builders, taxi drivers and musicians? Such self-employed people often work through limited companies, relying on dividends for income, and are getting little or no help, with devastating consequences. I know that the Treasury is worried about fraud, but I wrote to the Chancellor on 8 April with a Liberal Democrat proposal to help those self-employed people and protect the taxpayer. Will he please now help self-employed people who are dependent on dividends, before it is too late?
Rishi Sunak
The right hon. Gentleman mentioned groups that I engaged with specifically in the design of the self-employed scheme, and who I am fairly certain released reasonably positive comments on the day it was released, notably the Licensed Taxi Drivers Association and, I believe, one of the musicians’ federations. I spoke to them both personally as we developed the scheme, and I believe that they were very supportive at the time.
We have designed these schemes at pace to get support to as many people as we can in the time available, and the decisions that we have taken enable that. At this point, complicated changes to the schemes would just mean delay in getting support to millions of people who are either already in receipt of it or very shortly about to receive it.
Steve Brine (Winchester) (Con)
The package of help for the self-employed is welcome and helps the vast majority of workers. However, there are those—not the super-rich—who have been left out, either because they earn over the £50,000 cut-off, because they are new to self-employment or because they are company directors who are not earning the majority of their income by this route. In the spirit of doing whatever it takes, while appreciating that it could well involve some element of “pay now, claw back later”, can the Chancellor give those workers some hope that he does not view the self-employment support scheme as a done deal and that, as Scotland has shown in recent days, he is still open to new ideas?
Rishi Sunak
As I hope I have demonstrated over the past six to eight weeks, I am always open to new ideas, whether at home or abroad. I have constantly sought to refine, to improve, to iterate and to respond to circumstances on the ground to make sure that our economic response is as comprehensive and effective as it can be. I can give my hon. Friend an assurance that I will continue to do just that.
Matt Western (Warwick and Leamington) (Lab)
Businesses in Warwick and Leamington, much like those across the country, have been burning through cash in recent weeks and have been desperate for a cash injection. I welcome the Chancellor’s announcement today, but does he accept the view of Neel Kashkari, who ran the US federal bail-out programme in 2008-09, that what is critical is getting the money out as quickly and as simply as possible—like the French, who have lent seven times more than the UK, or the Germans, who have lent three times more? Does he accept that we have been too slow and too deliberative?
Rishi Sunak
Different countries have done things in very different ways. The hon. Gentleman talked about the US; the US has no equivalent of our furlough scheme, which is probably the most significant economic intervention that we have put in place—it was up and running four weeks after I announced it and is already, as we speak, getting money to businesses to pay wages. He talked about other European countries; there is a range. We have now issued more CBILS loans than the equivalent scheme in Germany.
Sir Graham Brady (Altrincham and Sale West) (Con)
As we look ahead to a gradual lifting of restrictions on business in the coming weeks, will my right hon. Friend look for common-sense opportunities, such as allowing open-air markets to trade in the same way as supermarkets? Will he also look at changes to the furlough scheme to help it accommodate a gradual return to work?
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.
Mr Steve Baker (Wycombe) (Con)
I congratulate my right hon. Friend on the wisdom and skill with which he is adopting policies that I am confident are not naturally his territory. Well done to the Government. Will he reassure me that he is conscious that we need to take early, safe opportunities to open up the economy if we are to get back to a path to sustainable prosperity? Can he reassure me that he knows how to unwind this major set of interventions, so that we can get back to sound economic principles?
Rishi Sunak
As ever, my hon. Friend makes excellent and informed points on economic policy. I thank him for his support as well. He is absolutely right. I share with him, as does the Prime Minister, a sense of urgency about wanting to reopen our economy so that we can start driving growth, providing people with employment and paying for our public services. He is right to acknowledge that that must be done safely. Although we have made progress, we are not there yet, but I can reassure him that extensive work is under way to plan for phase 2 of the crisis so that we can get back to the economy that he and I both want to see.
Peter Kyle (Hove) (Lab)
In the past 10 years, there has been a very active debate about those relatively few companies that have so aggressively avoided paying tax in this country. Many of those same companies are now relying on the largesse and generosity of taxpayers to remain solvent in these difficult times. As the Chancellor and his Department start to plan for the recovery economy, will he take this opportunity to have conversations with those companies to make sure that when we do recover, they play a much fuller part in our economy going forward? Let us not aim for business as normal when we get back after this crisis; let us aim for business as better.
Rishi Sunak
I thank the hon. Member for that comment, and I like his phrase at the end—we will see whether it shows up in a future speech. He is absolutely right that we are all in this together. We have gone through this as a collective endeavour as a country, whether as business, Government or individuals, and it is right that people act responsibly during this process. That is something I have urged all businesses to do, and I hope they continue to do that. He is correct: as we emerge from this, it is right to look at things in the round. As we went through this together, we must repair the economy all together.
Anthony Browne (South Cambridgeshire) (Con)
I congratulate my right hon. Friend on the bounce-back loans, which I am confident will provide much relief to a lot of small businesses in my constituency. I also congratulate him on the strong support measures across the range, which have helped a lot of people in South Cambridgeshire. Will he confirm that he will keep the package of measures under review, both to identify any other groups that we can help, but also to make sure that as we transition out of lockdown, we do so successfully? In particular, the job retention scheme, which, as he said, now employs 4 million people, has been very successful in protecting jobs. We need to make sure that when it does come to an end, it does so in a way that minimises redundancies.
Rishi Sunak
My hon. Friend is well informed on these issues. I know he has put a lot of specific thought into this topic, and I welcome further engagement with him. He is right. We must think carefully about exiting these schemes to provide maximum support to the labour market and businesses, and to ensure that we do not inadvertently distort things and hamper our recovery by stopping people going to work and businesses re-employing them, which is the outcome we all want to see.
Hywel Williams (Arfon) (PC) [V]
On Friday, the Government announced support for ferry services between Northern Ireland, Scotland and England. The Holyhead-Dublin route was ignored. A great deal of Holyhead-Dublin traffic is in fact between Northern Ireland and Great Britain, including the transport of time-sensitive goods such as food and medicine. It is also vital to the economy of north Wales. Is the Chancellor just standing back and waiting for Holyhead, the UK’s second-busiest roll-on roll-off ferry port, to fail before stepping in?
Rishi Sunak
As we have demonstrated, we are prepared to support critical transportation services in this country, with huge economic intervention in rail, in buses and, as the hon. Gentleman acknowledged, in ferries. I know my right hon. Friend the Transport Secretary is well on top of that and he will bring to me any issues that he thinks need my consideration.
Harriett Baldwin (West Worcestershire) (Con)
I thank the Chancellor and his teams for the speed with which they have managed to get so much money to help so many of my constituents. As he thinks about how he is going to balance the black hole that is his budget at the end of this, may I suggest that he consider not only ending the fair fuel stabiliser now that fuel prices have fallen by so much, but putting a windfall tax on hedge fund managers who are currently selling short the very businesses he is trying to support?
Rishi Sunak
I thank my hon. Friend for her support. I cannot comment on future Budgets, but I certainly hear what she has to say. I echo what I said earlier to the hon. Member for Hove (Peter Kyle). We are all in this together. As we look to repair public finances and get our economy going after we exit this crisis, it is important that everybody, from every part of society, plays their part in that.
Jim Shannon (Strangford) (DUP) [V]
Thank you very much, Mr Speaker. I am here virtually, but at a distance.
I thank the Chancellor for all he has done, is doing and will do in the future. Some in the hospitality sector, in particular private bus companies, do not have premises and fall just outside the present small business support scheme. Will the Chancellor agree to extend the scheme? Similarly, the coronavirus bank loan scheme has had 36,000 applications, but only 16,000 have been approved. Will the Chancellor ramp up underwriting cover from 80% to 100%, as other countries have been doing?
Rishi Sunak
What I would say to the hon. Member is that the new bounce-back loan scheme announced today does come with a 100% guarantee for loans of 25% of turnover up to £50,000. Given the structure of the Northern Irish economy that he knows so well, which is full of microbusinesses, I believe that that in particular will be a very significant intervention that will help the Northern Ireland economy.
Felicity Buchan (Kensington) (Con)
I congratulate my right hon. Friend on the scale, breadth and speed of the various packages, and thank him for them. Does he agree that what is important at the moment is getting cash and liquidity to businesses and individuals, hence why the micro-loans scheme is so important? Does he also agree that over time a lot of companies are taking on additional debt, so we may have to think about debt equity recapitalisation?
Rishi Sunak
My hon. Friend is absolutely right. I know she has spent a lot of time with businesses in her constituency to understand what is on their minds. Cash and liquidity is king, which is why the VAT deferral in particular that we put in place and which took effect some time ago—worth over £30 billion or 1.5% of GDP—is so vital in providing that breathing room. The new bounce-back loans will be available to businesses hopefully within a day or two of applying, which will also speed up cash. The furlough scheme is now up and running, and people are getting that cash in their bank accounts as we speak.
Alan Brown (Kilmarnock and Loudoun) (SNP) [V]
Many workers on low basic pay rely on commission to make up their wages, but if they are furloughed, they get 80% of their basic pay only, which causes real hardship. In response to my question in the Select Committee, the Secretary of State for Business, Energy and Industrial Strategy said that he is considering that matter. Will the Chancellor write jointly with him to confirm a solution that will give those workers access to 80% of their typical earnings?
Rishi Sunak
At this point, it is very difficult to make changes to the operation of these schemes; that would just delay further payment. For those workers who have fluctuating wages—for example, those on zero-hours contracts—we have provided employers and employees with the ability to take either the most recent time period and look at that over a year before, if they were seasonal, or to take an average of their earnings over a period, to ensure that they are not inadvertently penalised by a shorter period of lower earnings. I think that that does provide flexibility and generosity to those who do not have fixed amounts of work.
Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]
I thank the Chancellor for all he is doing to protect jobs and income at this really difficult time, and especially the introduction of the job retention scheme. However, he will be aware that many companies do not initiate a payroll run until the end of the month. This means that new starters in early March were paid for work they did in March but were then laid off because they are unable to access the furlough scheme. Will he review that and consider other evidence of employment?
Rishi Sunak
When we announced the job retention scheme, I said that it would apply to those who were known to HMRC on 28 February. That was how the scheme was designed and set up. Over the last few weeks, we have moved that date to 19 March, which brings an extra few hundred thousand people into it and means that overall, just shy of 30 million people in employment are able to benefit from the furlough scheme. It is an extraordinary achievement for the team in HMRC to have conceived that in this short space of time.
Daisy Cooper (St Albans) (LD) [V]
Pubs and restaurants have been hit particularly badly by covid-19. Those with a rateable value of more than £51,000 do not qualify for the retail, hospitality and leisure grant fund. Six of the big pubcos are still charging their tenants rent, and now pubs are being told that they will be some of the last to reopen once restrictions start to lift. Will the Government commit to extend the retail, hospitality and leisure grant fund to properties with a rateable value of up to £150,000, instruct the big pubcos to stop charging their pubs rent, and commit to extend the furlough scheme for as long as pubs and restaurants have to remain closed or for as long as their income is affected by social distancing measures?
Rishi Sunak
The hon. Member is absolutely right that companies in the retail, leisure and hospitality sector are the hardest hit during this crisis. Of course, they can avail themselves of all the various interventions we have put in place more generally, but they also have one specific benefit: for most of these businesses, rent is a significant part of their cost structure, which is why we have given them a complete business rates holiday for this entire year.
Julie Marson (Hertford and Stortford) (Con) [V]
The economic package that my right hon. Friend has put in place is historic in its scope and ambition and has been an absolute lifeline to so many people and businesses in Hertford and Stortford. The bounce-back loans will help still more. Some—mainly larger—businesses are entitled to taxpayers’ support but do not need it, so they have not taken it. Does he agree that we should applaud the lead they have taken and encourage others that do not need it to do the same in the national interest?
Rishi Sunak
I thank my hon. Friend for her kind comments. I agree with her that they should be applauded. As I said earlier, as we go through this crisis, everyone has their own role to play, and they should play that role responsibly. Whether it is individuals, Government or businesses, I am glad to see everybody taking that advice to heart. She is right that the businesses that have done that deserve our praise. More generally, we are trying to support workers remaining attached to their jobs, and I will try to do that in as broad and comprehensive a way as I can, but she is right that those businesses deserve our praise.
Stephen Farry (North Down) (Alliance) [V]
Like others, I am sceptical that we will see a V-shaped recession with a sharp recovery. Some sectors and some regions will struggle more than others. Does the Chancellor accept the need for some form of future economic stimulus to restart the economy? Surely it is not simply a case of restarting the engines of the economy; the economy may need a bit of a push.
Rishi Sunak
The most important economic policy at the moment is to maintain the productive capacity of the UK economy during a period of shutdown. Our interventions are designed to preserve as many businesses, jobs and connections as possible. That is the best way to ensure that the recovery can be as strong as we would all like it to be. For the moment, that is where we will focus our attention.
Andrew Selous (South West Bedfordshire) (Con) [V]
I am grateful to the Treasury for the work it has done to keep the economy going. However, I have a tourism business and a leisure business that have been turned down by their banks, even though they are both viable, and they will need more than the £50,000 from the bounce-back scheme announced by the Chancellor today. These are excellent businesses that we must not lose. Will he continue to look further at such cases and consider grants for where there are very difficult situations?
Rishi Sunak
Without knowing the particular details of those businesses, I can say that many businesses in the retail, leisure and hospitality trade will be eligible for cash grants of £25,000. Also, all businesses can use the furlough scheme, which is significant, and there will be business rates holidays for those businesses. Furthermore, the statutory sick pay rebate scheme I announced earlier will be up and running next month, which will allow businesses to apply for a rebate on their statutory sick pay bill for up to 14 days per employee. That could benefit businesses by up to £48,000 as well. I hope that all those packages put together provide some relief to my hon. Friend’s business and many others.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
The Chancellor rightly stepped in to do the right thing by many of our businesses as covid-19 hit our economy, but is he aware that there is a small group of people who took on pub tenancies between the last eligible date he set in the grant rules and the lockdown? I have three in my constituency. It is a sizeable financial commitment, and even more so when they then cannot trade for the foreseeable future. Will he look again at the rules and assist this small number of people now in limbo with no access to help?
Rishi Sunak
I am happy to look at the specific situation the hon. Gentleman raises, although I would caution that it is difficult to make changes to these schemes. As many Members have said, the important thing is now getting cash out to people, and the only way to do that is to let these systems run as designed, but I am happy to look at the issue he raised.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con) [V]
I congratulate the Chancellor and his team at the Treasury on everything they are doing to support the country through this very challenging time. On Scotland and the Barnett consequentials, how much extra funding has flowed to Scotland as a consequence of his announcement, particularly the business support? How much extra money has come to Scotland as a consequence of that?
Rishi Sunak
My hon. Friend is right. When I say that we are all in this together, I mean every part of our Union. The Government are steadfast in their support and are determined to get through this crisis by supporting and working very closely with all members of our Union. I can tell him that from the Budget onwards £4 billion in Barnett consequentials have been provided to Scotland, £3.5 billion of which relates specifically to the range of announcements in response to the coronavirus. Those numbers are in addition to the UK-wide measures that support business, such as the jobs retention scheme.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) [V]
I hope you are all doing well overseas in London.
Last week, a member of the Bank of England Monetary Policy Committee said that monetary financing for financial fiscal spend with central bank money rather than Government bonds is something that central banks are always doing. Direct funding of Governments by their own central banks is therefore a fact. Can we remember the words of the late American economist J. K. Galbraith, who said that the process by which money is created is so simple, the mind is repelled? Will the Chancellor take this opportunity not to repeat the socially divisive policy of austerity? Coming out of this crisis, the last thing any of us needs is another round of austerity.
Rishi Sunak
Rather than commenting on monetary policy, which it is obviously not my place to do, I can tell the hon. Gentleman that we are determined, as I have said, to preserve as much of the productive capacity of the UK economy as we can throughout this crisis. Such interventions will ensure that we can bounce back as strongly as possible and recover as much of our potential output as possible. Hopefully, that will put us in a strong position to carry on delivering on the agenda that we set out at the Budget: spreading opportunity to every part of the country and levelling up through investments in education, infrastructure and ideas.
Steve Double (St Austell and Newquay) (Con) [V]
As has already been highlighted, the tourism and hospitality sector will be hardest hit through this lockdown. As we are unlikely to come out of lockdown soon, the sector will need further support. Will the Chancellor reassure the sector that he will consider further support for tourism and hospitality? Will he reflect in particular on the seasonal nature of the sector? If we cannot reopen fully ahead of the peak summer season, many businesses will in effect lose a whole year’s worth of revenue.
Rishi Sunak
For as long as I have known my hon. Friend he has been an incredible advocate for the small tourism businesses in his constituency, which are a big driver of his local economy. I assure him that I will continue to keep a very close eye on the situation. As we think about exiting from the economic and social restrictions, I will look at the right interventions for every sector.
Stephanie Peacock (Barnsley East) (Lab) [V]
New research conducted by the Centre For Towns has found that one in three ex-industrial towns are among the most economically at risk from covid-19. Worsbrough in my constituency is the 10th most at-risk town. What plans does the Treasury have to help areas like mine in Barnsley to cope with this crisis and then recover from it?
Rishi Sunak
The significant economic interventions that we have put in place will help every part of the country, whether north or south, rural or urban—that is what they are designed to do. Businesses in the hon. Lady’s constituency will benefit from all the schemes. More broadly, the Budget set out an ambitious programme of investment in our regions to ensure that opportunity is felt wherever in this country someone happens to live. We remain incredibly committed to that agenda.
Robin Millar (Aberconwy) (Con) [V]
At least one forecast has predicted that coastal communities will be hit the hardest by any economic downturn following the covid-19 crisis. Here in Aberconwy, our queen of resorts, Llandudno, has been singled out as one of those communities that may well be hardest hit in the UK. The situation is further exaggerated by the fact that we are still approaching the peak of the crisis in north Wales. What measures has my right hon. Friend put in place to ensure that he will reach that balance between stimulating our economy, particularly the hospitality trade, and making sure that that stimulus does not come too soon with the result that we get hit by a second wave here in north Wales?
Rishi Sunak
This is why it is so vital that we get the timing absolutely right. We are not there yet, as the Prime Minister said. We have made good progress but we are all concerned about the risk of a second peak, which is why we must meet the five tests that the First Secretary of State set out a little while ago so that we can restore our economy gradually but with confidence.
Stewart Hosie (Dundee East) (SNP) [V]
I agree with the Chancellor that covid-19 is causing significant local and global economic problems, and I am sure he would agree with me that trade will be a vital ingredient in recovery. Is it not the case that—he should take this on board very seriously—notwithstanding the need to ensure security of supply for things such as medicine and medical equipment, he and the Government should resist any move or any siren voices that would push the UK towards general protectionism in trade?
Rishi Sunak
The Prime Minister has been completely clear in his commitment to free trade; it is an important part of what we believe. It is also right, especially during this time, that we can ensure the security of supply that the hon. Gentleman mentioned. That is what the Government are doing, but it requires working with our international partners as well as focusing on domestic sourcing. We can continue to do both things, especially to ensure that our workers get all the equipment and supplies that they need at this time.
Dr Andrew Murrison (South West Wiltshire) (Con) [V]
I very much welcome the statement, particularly the news about the bounce-back loans, which will be very helpful for small businesses in my constituency. Selling milk and meat into the non-domestic market has largely stopped, as have farm diversification schemes that were necessary to cross-subsidise land-based businesses. What more can the Chancellor do, beyond that which he has announced today, to assist agricultural businesses—land-based businesses—across the country?
Rishi Sunak
Representing a rural constituency myself, I understand very well the comments that my right hon. Friend has made. I am in constant dialogue with the Secretary of State for Environment, Food and Rural Affairs on these issues. We are making sure that all the economic interventions that we have put in place can benefit not just the agriculture sector but as many sectors as possible.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP) [V]
Fairs and shows are on the back burner for the summer. That means that the livelihoods of show families in my constituency are on the line. They purchased rides and equipment through asset finance companies and they need to cover the repayment costs, which have not stopped amid this pandemic. What assurances can the Chancellor give me that the coronavirus business interruption loan scheme is offering the funding needed to support travelling funfairs?
Rishi Sunak
If I understood the hon. Lady’s question correctly, I can assure her that the coronavirus business interruption loans apply to meeting asset-related costs already, so it is perfectly possible to use that scheme for a finance arrangement like that. But if that was not her specific question, I would be happy to answer in writing.
Kevin Hollinrake (Thirsk and Malton) (Con)
May I first declare my business interests, and, from a business perspective, thank the Chancellor for the excellent work that he is doing—a view shared widely across the business community? On the business interruption loans, I welcome the removal in the new micro loan scheme of the forward viability test, which is one of the complexities that slows down the current scheme. Will he commit to looking at removing that from the main scheme as well, which would help to get money out of the door much more quickly?
Rishi Sunak
My hon. Friend has been not, I would say, a thorn in my side but a doughty champion of those who would like to have access to these loans. He has made this point forcefully and repeatedly to the Economic Secretary and to me. I am pleased to tell my hon. Friend that we have been working with the banks over the past week or so and we have been able to make, on his recommendation, several changes to the scheme, including from the regulatory side through the Prudential Regulation Authority and the Financial Conduct Authority, to give banks the comfort they need, as well as reassurances from the Government. A statement will be issued shortly by UK Finance confirming that banks will not require from businesses the provision of forward-looking financial information or business plans. I hope that that gives him the reassurance he needs. It will give comfort to many businesses. I congratulate him on making this point so forcefully and effectively over the past week or two.
Mr Alistair Carmichael (Orkney and Shetland) (LD) [V]
I think we all understand that, as the Chancellor said, these schemes were designed at pace, but I have to tell him that here in the northern isles our economy is predominantly based on small businesses, where every day it becomes more apparent that there are too many people falling through the gaps, especially the self-employed, people working from home, and those relying on directors’ dividends for their income. If it is just too difficult to design a scheme to help all these people, will the Treasury now look seriously at the idea of a universal basic income? Yes, it might risk handing cash to people who do not actually need it now, but that can be clawed back through the tax system, and it will give help to people who are feeling desperate for it now.
Rishi Sunak
As I have said previously, I do not agree with a universal basic income. I do believe, though, that our schemes will benefit many, many millions of people, particularly the self-employed scheme, which will benefit over 3.5 million people who need it, and, indeed, the new bounce-back loan I announced today, which will also be available to those in self-employment with business accounts.