Treasury
Rishi Sunak Excerpts(2 years, 10 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rishi Sunak
Meeting our climate ambitions is obviously at the heart of everything that the Government are doing. The hon. Lady talked about sectors where we should show leadership: I have just talked about offshore wind, and we can keep going, with electric vehicles. This country now has more rapid charging points per mile than any country in Europe other than Norway, and we are doing more.
[Official Report, 22 June 2021, Vol. 697, c. 751.]
Letter of correction from the Chancellor of the Exchequer:
An error has been identified in the response I gave to the hon. Member for Leeds West (Rachel Reeves).
The correct response should have been:
Rishi Sunak
Meeting our climate ambitions is obviously at the heart of everything that the Government are doing. The hon. Lady talked about sectors where we should show leadership: I have just talked about offshore wind, and we can keep going, with electric vehicles. This country now has more rapid charging points per mile than any country in mainland Europe other than Norway, and we are doing more.
Oral Answers to Questions
Rishi Sunak Excerpts(2 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Laura Farris (Newbury) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
We are encouraging employers of all sizes to take on new apprentices through our hiring incentive. Employers who hire a new apprentice of any age until the end of September will receive £3,000 per apprentice. We are also continuing to improve the apprenticeship system for employers by introducing more flexible trading options, making the transfer of unspent levy funds to small businesses easier, and supporting apprenticeships in industries with flexible working patterns through the launch of portable apprenticeships.
Mark Eastwood
The Government’s £3,000 initiative incentive for businesses to employ apprentices is welcome, with several companies in my constituency looking to apply, including Shackletons in Dewsbury, and John Cotton and Alexander’s Bar in Mirfield. There is no doubt that this initiative has been a great success in enabling young people to get on to the employment ladder. Therefore, will my right hon. Friend consider an extension in funding for the scheme beyond the 30 September deadline?
Rishi Sunak
I pay tribute to, I think it was Shackletons and John Cotton in my hon. Friend’s constituency for the example that they are setting, which I hope is emulated by employers across our country. The scheme, as he says, has been a success. More than 50,000 incentive payments were claimed by employers, 80% of which were for young apprentices between 18 and 24. We will of course keep this very successful scheme under review.
Chris Clarkson
Apprenticeships are a fantastic way for people to learn, earn and realise their potential, so much so that I have just advertised this week for one to join my team via Hopwood Hall College in my Heywood and Middleton constituency. Does my right hon. Friend agree that businesses big and small can play their part in turbocharging our post-covid recovery by offering these fantastic opportunities?
Rishi Sunak
I am delighted to hear that my hon. Friend is working with Hopwood Hall College in his constituency to hire an apprentice. Hopefully, I will get an opportunity to meet them in the future. He is right about the ability of this scheme to support all types of employers. Small businesses in particular should know that the £3,000 equates to about a 35% wage subsidy for young apprentices and the Government pay 95% of all training costs, so there has never been a better time for employers to do as he says to help turbocharge our recovery and to hire an apprentice.
Lucy Allan
As with every economic crisis, it is Telford’s young people who have been hit hardest by the pandemic. Telford College is playing a vital role in working with employers across the region and securing 1,000 quality apprenticeships this year, helping young people to build their future. Will the Chancellor congratulate Telford College on its inspirational work, and will he commit to putting skills and opportunities for young people front and centre in his economic recovery plan?
Rishi Sunak
I am delighted to hear that news from my hon. Friend. I am happy to congratulate Telford College on a fantastic performance in creating new apprenticeships and working with its local employers to provide those opportunities. She is absolutely right: young people have borne the brunt economically of this crisis. They comprise the majority of the job losses, so it is right that they are front and centre of our minds as we think about the recovery. That is why, whether it is the kickstart scheme, tripling the number of traineeships or the new lifetime skills guarantee, we are focused on providing them with the opportunities and support that they need.
Edward Timpson
It is clear that the pandemic has hit the youngest the hardest. Alongside apprenticeships, many businesses in my Eddisbury constituency, including Safety Shield in Winsford, have used the kickstart scheme in order to bring more good jobs to young people as part of our economic recovery. To that end, will my right hon. Friend tell the House what impact the roll-out of the kickstart scheme is having, and how more businesses that want to, and could, join that scheme and invest in young talents in their area are able to do so?
Rishi Sunak
I congratulate Safety Shield in Winsford on embarking on taking on new kickstarters. This is central to our plan for the recovery in providing opportunity to young people in my hon. Friend’s constituency and others. I am pleased to say that over 31,000 kickstarters have started their jobs, with 10,000 more to come in the coming weeks and months. I would say to employers who are looking to take on a kickstarter: go online, talk to your local business organisations, whether it is the Federation of Small Businesses or the chamber of commerce, or apply directly to the Department for Work and Pensions to be accredited so that you can give a young person a fantastic opportunity as we go through the stages of our recovery.
Laura Farris
Unemployment is now falling fast in west Berkshire, and that is in no small part thanks to the Treasury-backed apprenticeship scheme. However, Newbury College, our principal training provider, says that it is still the large employers that take the bulk of young apprentices, when it is small and medium-sized enterprises that form the backbone of our local economy. Does my right hon. Friend think there is an opportunity to reallocate some of the surplus from the apprenticeship levy to encourage take-up among SMEs?
Rishi Sunak
My hon. Friend makes an excellent point. I am proud that she is working with Newbury College in her constituency. She is right that SMEs are the backbone of west Berkshire and other local communities across our economy. On her particular point, I am pleased to tell her that, from August of this year, employers who pay the levy but have unspent levy funds will be able to use a new bulk transfer service to send that money to SMEs, combined with a new SME match function so that they can find the SMEs that are most appropriate to their business, supply chain or local area. I hope that is helpful to her and Newbury College. The plan is for the Department for Education to have that up and running in August.
Mr Toby Perkins (Chesterfield) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
Stimulating business investment will be key for our economic recovery, and under the super deduction we announced at Budget 2021, for every £1 a company invests in qualifying plant and machinery, its taxes are cut by up to 25p. We have also just launched the UK Infrastructure Bank, which will partner with the private sector and local government, supporting more than £40 billion-worth of infrastructure investment overall.
Jane Stevenson [V]
My right hon. Friend will know that manufacturing and engineering companies are absolutely crucial to the economy in the Black Country and in Wolverhampton. Does he agree that companies feeling confident to make investments, with Government support and schemes like the super deduction, is key to really building back quickly and better, and to lowering unemployment in the Black Country?
Rishi Sunak
My hon. Friend is absolutely right to highlight the importance of manufacturing in particular to the Black Country. I am pleased to have received the representations from organisations such as Make UK that led to the creation of the super deduction, which, let us be clear, is all about jobs. My hon. Friend is absolutely right: by companies investing and unlocking the cash that is sitting on their balance sheets, we will create jobs to help drive our recovery and drive up our productivity in the process. My hon. Friend is absolutely right to highlight it.
Jason McCartney (Colne Valley) (Con)
Greg Smith (Buckingham) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
Between the end of January and the end of April, 1.5 million people left the furlough scheme. The most recent business survey from the Office for National Statistics estimates that the number of employees furloughed continued to decline after that point, to approximately 2 million at the end of May, which is the lowest level reported by the survey since June last year. At the same time, the number of payrolled employees has increased for six consecutive months. I believe that the coronavirus job retention scheme is striking the right balance between supporting the economy as it opens up, continuing to provide support and protect incomes, and ensuring that incentives are in place to get people back to work as demand returns.
Nicola Richards
Does my right hon. Friend recall that at the start of the pandemic, many commentators feared that it would lead to unemployment on an unprecedented scale? Has he estimated that impact of his furlough scheme on protecting jobs?
Rishi Sunak
My hon. Friend makes an excellent point. The furlough scheme has supported more than 11.5 million jobs since the start of the pandemic, and she is right to say that at that point, forecasts suggested that unemployment would peak at around 12%. Those forecasts now show unemployment peaking at half that level, which means 2 million fewer people losing their jobs than previously feared. Our unemployment today is lower than that in Italy, France, Spain, Canada, the United States and Australia, and it shows that our plan for jobs is working.
Greg Smith
The figures my right hon. Friend gave in his earlier answers are encouraging, but some employers in my constituency with employees still on furlough tell me that they are desperate to get those employees back to work, but the uncertainty over when restrictions will finally be lifted is holding them back. For example, in the events supply chain, the unwillingness of customers to pay deposits is holding those firms back. Does my right hon. Friend agree that the way to get the economy moving and get those employees back to work is for restrictions to be lifted by 19 July?
Rishi Sunak
My hon. Friend is right, and my hope and expectation is that we lift those restrictions on 19 July. By that point, we will have done what we set out to do, which is to get extra jabs in more people’s arms to provide us with that extra level of protection. My hon. Friend is right: the only sustainable way to protect those jobs is to reopen the economy so that people can return to work and provide for their families, and move on to bright new opportunities.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
Independent experts have told the Government 12 times that the failure to provide adequate financial support to people self-isolating has contributed to the spread of covid, endangering lives and livelihoods. We now know that the Treasury instructed Government officials actively to supress information about the furlough scheme that was to be used by employers to financially support people self-isolating. Will the Chancellor explain why that instruction was issued by the Treasury? Will he appear in front of the parliamentary Committee’s inquiry into covid to explain why the Government chose not to improve self-isolation support, despite repeated warnings?
Rishi Sunak
The hon. Lady is wrong, because the Government did no such thing. Indeed, guidance on usage of the furlough scheme was there in black and white—I am looking at it—and plain for everyone to see from the start. At the beginning of this crisis we improved the way that statutory sick pay works to deal with self-isolation. That was one of the earliest steps we took. We then introduced a rebate scheme for small and medium-sized businesses, to claim back the cost of statutory sick pay for isolating employees from the Government. We also introduced a £500 self-isolation payment, which once the isolation period reduced from 14 to 10 days increased in value by 30% and is now worth at least the national living wage to a worker, if not 20% or 30% more, depending on how many days they isolate for. That shows that the Government are supporting those who need to self-isolate. They did so at the beginning of this crisis, and they will continue to do so until the end.
Mel Stride (Central Devon) (Con) [V]
Given the rapid pace of our economic recovery and the plans for the further reopening of the economy, I support my right hon. Friend’s decision to phase out furlough by the end of September. However, does he accept that a small number of sectors are likely to require yet further support after that time—not least the travel sector, whose revenues, according to evidence received by the Treasury Committee, have suffered a 90% fall during the crisis?
Rishi Sunak
My right hon. Friend is right to highlight the difficult circumstances facing that sector, which is why I think in aggregate more than £7 billion of support has been provided to the sector through various means. He will know that there are some particularly large companies that talk to the Government on a bilateral basis. It would not be appropriate for me to comment on those conversations, but he will of course be aware of the support we have put in place, for example, for regional airports, the vast majority of which are paying no business rates for the first half of this year. As he would expect, we keep everything under review.
Sarah Atherton (Wrexham) (Con)
Mrs Sheryll Murray (South East Cornwall) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
I was pleased to announce the location of eight new English freeports at the Budget in March. The next phase of delivery for freeports is being led by the Ministry of Housing, Communities and Local Government. It is working with the eight freeports to help them to establish the appropriate governance structures and develop their investment proposals. The Government will then review their proposals for investment and the deployment of the tax and customs reliefs later this year.
Mrs Murray
I welcome the news that we have a freeport in neighbouring Plymouth. Will the Chancellor’s Department please work with the Department for Transport to ensure that we have quick, flowing transport links across the Tamar to make the most of these opportunities for my constituents?
Rishi Sunak
I am delighted for Plymouth and its surrounding communities that it has received freeport status. As my hon. Friend says, this is a fantastic opportunity to drive investment and create jobs. I will, of course, work with the Department for Transport on improving transport links across the south-west. She previously welcomed the £2.5 billion upgrade of vital road connections such as the A303, the A30 and the A358, as well as the replacement of the vital Dawlish sea wall, which will improve rail connectivity in the region.
Anne McLaughlin (Glasgow North East) (SNP)
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Chancellor of the Exchequer (Rishi Sunak)
As we have reopened our economy since the last lockdown, we have continued to provide extensive support through our £400 billion plan for jobs, protecting businesses, families and individuals. I am pleased to say that the early data on household incomes, employment, corporate insolvencies and consumer and business confidence all show that our plan for jobs is working.
Margaret Ferrier [V]
Following the Treasury’s announcement of compensation to cover up to 80% of the losses of holders of mini-bonds with London Capital & Finance, will the Chancellor now also act to provide full compensation to the victims of another scandal, the collapse of Equitable Life? The vast majority have received just 22% of their losses.
Rishi Sunak
I very much appreciate the hon. Lady’s raising the issue. She will know that the matter has been extensively discussed and debated for many years. The matter, after review, has been concluded and closed and is final in all respects.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Rishi Sunak
I can assure not just my hon. Friend, but Keith and Dave from the Titanic brewery, that we have consulted industry on the prospect of such a lower rate as part of our ongoing alcohol duty review. The team and my right hon. Friend the Financial Secretary are working closely with HMRC to further understand the practicalities and the cost of the proposals; we will provide further updates in due course. My hon. Friend is right about securing hospitality in the meantime. The temporary VAT cut, the business rates holiday and, indeed, freezing beer duty at the last two Budgets are all helping in the short term.
Rachel Reeves (Leeds West) (Lab)
Thank you, Mr Speaker.
Whether on social care, on Northern Powerhouse Rail or on tackling climate breakdown, there is a growing gap with this Government between what is promised and what is actually delivered. The Treasury’s response to the net zero review was first due to be published in autumn last year, yet it is nowhere to be seen. The COP26 climate summit begins in November. While the UK is hosting, the Government cannot lead with authority, because the fact is that we cannot have a climate strategy without a sustainable economic plan behind it. Will the Chancellor please tell the House on what date he will publish the final report of the net zero review?
Rishi Sunak
The net zero report will of course be published imminently, but the hon. Lady talked about last autumn. Last autumn, the Prime Minister published the green 10-point plan, perhaps the most comprehensive plan from any Government anywhere in the world, on how we will meet our net zero ambitions. Contained within that plan was £12 billion of new investment, creating probably a quarter of a million jobs when all is said and done, ensuring our leadership in industries such as offshore wind and creating jobs in places such as Teesside and Humberside, which is important to the future prosperity of this country, so I think we are doing a great job of getting on with meeting our climate ambitions and demonstrating leadership to the world.
Rachel Reeves
Then why not publish the net zero review, Chancellor? When it comes to this Government’s net zero strategy, tomorrow never comes. There is no time to waste, because it is the responsibility of all of us to hand on to our children and grandchildren a more sustainable planet, creating new opportunities for our pioneering British industries and investing today in the jobs of the future, whether in hydrogen, tidal energy or electric vehicles, to ensure the fair and just transition that we need to see. So, as the Chancellor still cannot give a date, months after the event, for when he will publish his final report on the net zero review, will he commit to ensuring that our net zero carbon targets are hard-wired through the forthcoming spending review, as I would do as Chancellor?
Rishi Sunak
Meeting our climate ambitions is obviously at the heart of everything that the Government are doing. The hon. Lady talked about sectors where we should show leadership: I have just talked about offshore wind, and we can keep going, with electric vehicles. This country now has more rapid charging points per mile than any country in Europe other than Norway, and we are doing more.[Official Report, 28 June 2021, Vol. 698, c. 3MC.] She talked about showing leadership: as the Financial Secretary to the Treasury, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) reminds me, we recently published the Dasgupta review, which is a groundbreaking piece of work on tackling biodiversity. She talked about infrastructure: we launched the UK Infrastructure Bank just last week, not a million miles away from her in Leeds, the home of the infrastructure revolution. And at the G7 summit that I recently hosted, we reached a landmark global agreement to get the G7 to agree to mandatory climate disclosures, because, much as she would like us to, this Government alone cannot solve all these problems. The private sector will have to play its part, which is why climate disclosures across the world would help to unlock billions in private capital to help us to meet our climate ambitions.
Andrew Griffith (Arundel and South Downs) (Con)
Rishi Sunak
My hon. Friend is absolutely right, and I briefly pay tribute to him for his work last week on tech net zero. We launched the UK Infrastructure Bank last week in Leeds. Capitalised with £12 billion from the Government, it will unlock £40 billion of investment into tackling both levelling up and our net zero ambitions, and the team there are fantastic. I want to take this opportunity to say an enormous thank you to Chris Grigg for his superb leadership. It is brilliant that we can attract people of his calibre to lead these organisations, and I feel very confident about the UK Infrastructure Bank’s future progress.
Alison Thewliss (Glasgow Central) (SNP) [V]
Concerns have been raised that the narrow criteria of the Business Banking Resolution Service have left far too many ineligible, and also that not enough banks are participating in the scheme. With many businesses now at risk with covid-19 debt, can the Minister tell me what he intends to do about the situation?
Rishi Sunak
The hon. Lady is right in the sense that many businesses have taken on debt to get through the crisis, which is why we have implemented something called Pay as You Grow. More than 1 million businesses took bounce back loans, and they now have the ability, at their option, to turn those loans instantly into 10-year loans, doubling the term and reducing their monthly payments by around half, and to take further six-months holidays or interest-only repayment periods. They can take any of those options and it will not have any impact on their credit score, because we recognise the burdens on cash flow and we want to do our bit to ease them and support our recovery.
Rushanara Ali (Bethnal Green and Bow) (Lab) [V]
Rishi Sunak
The hon. Lady talked about outcomes in the labour market. She will know that we have now had six consecutive months of more people in work, which is something to be celebrated. Vacancies are now running higher than they were at the start of the pandemic, which is a fantastic sign of things to come. The unemployment rate, as I highlighted earlier, is now half what was forecast: 2 million fewer people are forecast to lose their jobs, which is lower than most of our major competitor countries. She is right to highlight, as we have discussed previously, the plight of young people. Our interventions, such as the kickstart scheme and the apprenticeship incentive, will continue to provide opportunity for them up and down the country.
Mr Richard Holden (North West Durham) (Con)
UK Infrastructure Bank
Rishi Sunak Excerpts(2 years, 10 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
The UK Infrastructure Bank has begun operating in an interim form and is open for business.
The bank, owned and backed by the taxpayer, will support and enable private and public investment in infrastructure, with core objectives to help tackle climate change, particularly meeting our net zero emissions target by 2050, and to support regional and local economic growth. The Government and the bank have also set out the institution’s investment principles today which will guide how it delivers its objectives.
HM Treasury and the UK Infrastructure Bank have entered into a keep well agreement to ensure that the bank has sufficient funds to be able to meet its payment obligations in full as they fall due.
The UKIB will be headquartered in Leeds, and will operate across the whole of the UK, supporting projects in England, Scotland, Wales and Northern Ireland. Over the coming months, the bank will continue to build its capability and capacity as it establishes itself as an independent institution.
The Government are also publishing the bank’s initial framework document, which sets out the institution’s relationship to the Government.
A copy of the framework document, alongside an unexecuted copy of the “Keep Well Agreement”, which has information redacted on the basis that it contains either commercially sensitive or personal data, will be placed in the Library of the House.
[HCWS96]
Better Jobs and a Fair Deal at Work
Rishi Sunak Excerpts(2 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
I am pleased to speak today in support of the Queen’s Speech and the measures it contains to make the United Kingdom stronger, healthier and more prosperous than before. Let me first warmly congratulate and welcome the hon. Member for Leeds West (Rachel Reeves) to her new position on the shadow Front Bench. Her predecessor and I often had robust debates, but always in the right spirit, and I am sure that that will continue with the hon. Member.
While there is much to debate, the fundamentals of our economic recovery should be a point of consensus in this House: one of the quickest, largest and most comprehensive economic responses to the pandemic anywhere in the world; continued agility throughout the crisis, making sure that, where we can, support gets to those who need it; and now, with our economy reopening, I can say with full confidence that our plan for jobs is working.
Chris Bryant (Rhondda) (Lab)
How on earth can it be fair for somebody employed on a long-term contract to be fired and then immediately rehired?
Rishi Sunak
The Government and I strongly believe that firing and rehiring should not be used as a negotiating tactic by companies; that is absolutely right. The hon. Gentleman will know that the Secretary of State for Business, Energy and Industrial Strategy has asked ACAS to look into this matter. It is currently doing so, and we await its findings.
Gareth Thomas (Harrow West) (Lab/Co-op)
Will the Chancellor of the Exchequer give way?
Rishi Sunak
I will make some progress.
Before I turn to the details of the Queen’s Speech, let me first update the House on the improving economic context. A year ago today, I stood at this Dispatch Box and told the House and the country that I and this Conservative Government believe in the nobility of work, and that we would stand behind Britain’s workers throughout the crisis and beyond. Judge our commitment to those values by our record. When the furlough scheme ends in September, we will have helped to pay people’s wages for a year and a half, supporting, at its peak, the jobs of almost 9 million people. We have protected the incomes of more than 2.7 million self-employed people; backed businesses to keep people in work with tens of billions of pounds of loans, grants and tax cuts; and supported the most vulnerable through the crisis with a strengthened safety net, increased funding for local authorities and public services, and help for the charity sector.
Gareth Thomas
I notice that the Chancellor of the Exchequer did not mention young people. Recent figures reveal that the kickstart scheme is helping only 5% of unemployed young people who were made redundant during the financial crisis. Given that there are over 600,000 young people out of work at the moment, why did the Queen’s Speech not contain more measures to help tackle youth unemployment? Did he just forget?
Rishi Sunak
With the greatest respect, I am only one minute into my speech, so perhaps the hon. Gentleman will forgive me for not mentioning everything in the first 30 seconds. I completely agree with him. As I have said repeatedly from this Dispatch Box, not only are jobs my highest economic priority, but I have, from the very beginning, highlighted the particular impact that this crisis has had on young people because many of them work in the sectors that are most affected, particularly in the hospitality industry, which is why the Government have taken steps to support that industry. As I will come on to say later, the kickstart scheme is a key part of our way to help those young people find work. It is one of many things we are doing, whether it is traineeships, apprenticeships or the Prime Minister’s lifetime skills guarantee, and we will continue to focus on that.
Mr Toby Perkins (Chesterfield) (Lab)
Will the Chancellor of the Exchequer give way?
Rishi Sunak
I will make a tiny bit more progress.
Taken together, over the last year and this, our plan for jobs is providing over £407 billion of support for British people and businesses—a historic package of economic support unmatched in peacetime—and the evidence shows our plan is working. GDP statistics published only this morning show that the economic impact of the lockdown at the start of the year was less severe than had been expected and that there are clear signs that we are now on our way to recovery. The Bank of England said last week that it now expects the economy to return to its pre-crisis level by the end of this year—earlier than it previously thought.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
My right hon. Friend has just given us the excellent news that the economy should have rebounded by the end of this year. He and I have discussed on a number of occasions the importance of international development. In view of that, can he confirm to the House today that he will restore the 0.7% target at the end of the year when the economy has so recovered?
Rishi Sunak
I appreciate all the constructive conversations my right hon. Friend has had with me on this topic, which I know he feels passionately about. As he will know, while our economy will have recovered its pre-crisis levels, the damage to our public finances is much longer-lasting. That is what led the Government to make the difficult but I hope understandable decision to temporarily divert from the 0.7% commitment, with a full intention to return to it when the fiscal situation allows, but in the meantime to remain one of the leading donors to the causes that both he and I are passionate about.
Several hon. Members rose—
Rishi Sunak
I will make a tiny bit of progress.
In the labour market, it is worth reminding the House that at the start of this crisis, unemployment was expected to reach 12% or more. It is now expected to peak at about half of that level. That means almost 2 million fewer people losing their jobs than previously feared. Our unemployment rate today is one of the lowest in the G7—lower than those of Italy, France, Canada and the United States. Our plan has protected incomes, too.
Peter Kyle (Hove) (Lab)
The Chancellor mentions countries in the G7. It is, without question, good news that our economy is back into positive growth territory, but why does he think that the British recession was so much worse than in all the countries he has mentioned and at the bottom of the G7 during the coronavirus?
Rishi Sunak
I am grateful to the hon. Member for raising this point; I have addressed it previously, but am happy to do so again. As the Office for National Statistics and others have said, is difficult to make accurate cross-country comparisons—
Rishi Sunak
It is difficult to make such comparisons on GDP figures specifically, for the simple reason that the way in which we calculate GDP in this country uses different deflators for the public sector. That has been explained by the Office for Budget Responsibility and the Office for National Statistics, and it actually means that we are disadvantaged relative to peers. If we look at it on nominal GDP, which corrects for that difference in calculation, as the ONS has said, our performance actually looks very comparable to all our major competitors. I could point the hon. Member to the box in the Office for Budget Responsibility report—an independent organisation that would verify what I have just said.
It is worth bearing in mind what I have always said—that GDP is of course important, but it is abstract. What matters to people are their jobs and livelihoods, so the fact that unemployment is as low as it is compared to the projections at the beginning of this crisis is something that everyone in this House will welcome.
Our plan has protected incomes too. The latest statistics show that real household disposable incomes in the last quarter of last year were only 0.2% below the same period the year before. Of course, many families are facing profound difficulties, but it is an extraordinary relief that in the face of one of the largest falls in output in 300 years, we could broadly maintain household incomes. In turn, that has meant that some people have saved more, with household savings last year £140 billion higher than the year before, and surveys now showing that consumer confidence is returning to its pre-crisis levels.
Jim Shannon (Strangford) (DUP)
I spoke to the Chancellor beforehand about this. During the lockdown, covid loans were made available to companies. Companies in my constituency have indicated to me that the repayment scheme is not over a flexible period of time and they have to pay back large amounts of money in one go. To ensure that those companies can survive beyond the lockdown and into next year, may I ask the Chancellor whether it is possible to make some flexibility in the repayment of those loans for those companies?
Rishi Sunak
The hon. Gentleman makes an excellent point. It is one that, I hope, we have already addressed. He is right about the importance of companies having the cash flow to bounce back strongly, which is why late last year we introduced something called “pay as you grow” to help the 1.3 million small and medium-sized companies that have taken bounce back loans. It means that automatically, at their choice, they will be able to turn those loans from five-year repayment loans to 10-year repayment loans, which almost halves the monthly repayments. Furthermore, it gives them the option to go for interest-only repayment periods of six months or for payment holidays, none of which will impact their credit rating as long as they do it in advance. That should be automatically communicated to businesses by their bank. I hope that is helpful to the small and medium-sized companies in his constituency.
Sir Edward Leigh (Gainsborough) (Con)
All the pressure on my right hon. Friend has been from one direction, so let me try to right the balance. When this is over, in terms of a smaller state, deregulation and lower taxes, are there any Thatcherites left in the Government?
Rishi Sunak
Well, my right hon. Friend and I strongly agree on the role of the private sector in driving our recovery. What is important, as the hon. Member for Strangford (Jim Shannon) said, is businesses having the confidence to invest, which is why the Government have provided support for businesses not just to get through the crisis, but, through tax cuts such as the super deduction, to help them invest and drive our recovery forward. Both my right hon. Friend and I know that the prosperity that we all want can only be created by those private sector companies. I hope that gives him the reassurance that he is looking for. I should make some progress.
Talking of those businesses, I do believe that they are also now beginning to feel more confident. Although many firms have been hit hard by the pandemic, the latest data shows that the number of businesses becoming insolvent actually fell by nearly a quarter last year compared to the year before, and in aggregate firms have been able to build up an extra £100 billion of corporate deposits since the start of the pandemic. Since we announced our super deduction tax cut, businesses now have a virtually unprecedented incentive to invest and create jobs. Bank of England surveys show that businesses expect to invest around 7% more than they would have done over the next two years, and Deloitte’s recent survey of business leaders shows that their intention to invest is stronger than it has been at any point since 2015.
It is, of course, going to take this country and the whole world a long time to recover fully from the shock that saw the largest fall in output in 300 years, but although our recovery will be long and difficult, it is beyond doubt now that our plan is working. We will, however, never be complacent. Eight hundred thousand people have lost their jobs through this crisis, and no Chancellor could guarantee that there will not be more jobs lost. People losing their jobs is the thing that weighs most heavily on me. Work is the best route out of poverty. It brings people financial independence. It improves long-term outcomes for families and children. Work is not just another economic variable—it provides us all with purpose and fulfilment. That is why every job lost is a tragedy. That is why jobs are our highest economic priority. That is why we have a plan for jobs, and that plan is working.
Karin Smyth (Bristol South) (Lab)
The right hon. Gentleman may have noticed that we recently elected a new Mayor of the West of England region who has pledged to commit to jobs, green jobs and bringing people together across the west of England. Will the right hon. Gentleman commit to working with the new West of England Mayor to deliver that promise, because no one from the Government has currently been in touch to ensure that that promise is delivered on?
Rishi Sunak
The Government believe in devolution and have worked successfully with Mayors across the country. I have a very productive relationship with Mayors. I commend all Mayors who have recently been re-elected, particularly Andy Street in the west midlands and Ben Houchen in the Tees Valley. I believe that all leaders want to drive jobs and growth in their areas. I look forward to working with anybody who shares that goal, and I look forward to working with that new Mayor.
When it comes to supporting work, what also matters is that we reaffirm our commitment to ending low pay by increasing the national living wage to £8.91, an annual pay rise for someone working full time of almost £350. We are providing targeted support to young people, who, as has rightly been identified, have been hardest hit in the pandemic. The £2 billion kickstart scheme will create hundreds of thousands of jobs for 16 to 24-year-olds who would otherwise be at risk of long-term unemployment.
Mr Perkins
The kickstart scheme is not reaching nearly as many people as the right hon. Gentleman suggests. Labour has proposed an apprenticeship wage subsidy funded by the underspend in the apprenticeship levy, which would ensure that companies that took on young people would be putting a lot more into them than under the kickstart scheme. Rather than continually pushing the kickstart scheme, which is much more expensive than the apprenticeship wage subsidy, why will he not adopt the apprenticeship wage subsidy that Labour has proposed?
Rishi Sunak
The kickstart scheme has now created almost 200,000 job placements for young people in record time, given that the scheme was only announced in July last year and operational in autumn. Its ramp-up compares very favourably with the future jobs fund, which preceded it, and with which the hon. Member will be familiar. Now that the economy is reopening, many more young people can start those placements over the coming months. I commend all people both at the Department for Work and Pensions and at the thousands of companies involved for their participation in a scheme that will transform the opportunities of young people up and down the country.
With regard to apprenticeships, we already have an incentive for employers to take on apprentices. In the crisis, the Government introduced a £3,000 hiring subsidy for small and medium-sized businesses to take on a new apprentice—a significant 35% subsidy, I think, of an apprentice at the apprenticeship median wage. It also pays for 95% of all training costs for apprentices employed by SMEs, as well as improving the quality of those apprenticeships. I agree with the hon. Gentleman that apprenticeships are important, but we took action in July last year.
To help people of all ages to get back into work, we have doubled the number of work coaches in jobcentres and provided over £3.5 billion to help people to search for work or retrain, and we are launching the restart programme, with £2.9 billion to provide intensive support to over 1 million people who are long-term unemployed. This Queen’s Speech goes even further to turbocharge our economic recovery and get people into decent, well-paid jobs. The plan set out in the Queen’s Speech creates more jobs, and jobs where people live. The levelling up White Paper will set out bold new interventions to improve livelihoods and opportunities. We are strengthening the Union with record investment in new infrastructure, such as road, railways and broadband. We are turning Britain into a science superpower, with our plan for growth making this country the best place in the world for inventors, innovators and engineers.
Kevin Hollinrake (Thirsk and Malton) (Con)
First, may I wish the Chancellor a very happy birthday? The scale of his ambition on levelling up is absolutely right, but the scale of the challenge is also huge. The economic gap between London and the south-east and the north-east, in relative terms, is as great as it was between East Germany and West Germany prior to reunification, and it took 30 years to narrow that gap. Does he agree that it will take more than one Parliament and more than the significant investment he has already committed to truly to level up this country?
Rishi Sunak
I thank my hon. Friend for his warm words, and I agree with him. This is the task that this Government will meet head-on, and it is right that it needs to be an ambitious goal that we set ourselves to meet. Like him, I share an eagerness to get on with it and keep going—and he will know, like me, that we are already doing it. Indeed, we are making the most of our new-found Brexit freedoms to launch freeports, for example, creating jobs and growth in innovative new industries in places such as Teesside, which both he and I know very well.
Ian Paisley (North Antrim) (DUP)
Will the Chancellor give way?
Rishi Sunak
I must now make some progress, because I am running out of time.
The Queen’s Speech gives people the skills they need to get good jobs and progress in their careers. Right now, 11 million adults in this country, nearly a third of our entire workforce, do not have a level 3 qualification. The Prime Minister’s lifetime skills guarantee will change that, giving every adult flexible access to fully-funded, high-quality education throughout their lives, and this will have a transformational impact on people’s lives and livelihoods.
This Government believe that we should value equally every path to a good career, not just a degree, so the Queen’s Speech provides landmark reforms to post-16 education and training. As I have mentioned, we have doubled to £3,000 the incentive payments for employers to hire new apprentices, and we are reshaping the system around the needs of employers so that people can get training in the skills we know the economy will need now and into the future.
This Queen’s Speech delivers two critical pieces of Treasury-sponsored legislation. The National Insurance Contributions Bill will introduce new reliefs to encourage employers to employ veterans, to incentivise regeneration and job creation in freeports, and to provide relief on NHS Test and Trace payments. The public service pensions and judicial offices Bill will make sure that dedicated public servants are fairly rewarded for their service, while making sure that the system is affordable and sustainable into the future.
Rishi Sunak
I am just going to wrap up.
In conclusion, it is apt that today the Opposition broke with a minor tradition, choosing to debate economic matters first, not last, and specifically to cite jobs as a focus—not the wider economy, as is the norm. I have been saying for over a year, since the very outset of this crisis, that protecting jobs and livelihoods was this Government’s No. 1 economic priority. It has shaped my decisions and actions and I have said it over and over again, to leave the British people in no doubt that this Government are on their side.
Last week’s results showed that, from Hartlepool to Harlow, the people heard us, so I cannot welcome enough today’s debate to share with the Labour party our plans to continue protecting the jobs of the British people and to defend a record that has seen millions of livelihoods protected and hundreds of thousands of businesses supported, and has created the conditions for one of the strongest economic recoveries anywhere in the world. We have a plan, and that plan is working.
Madam Deputy Speaker (Dame Rosie Winterton)
I remind hon. Members that there is a five-minute limit on Back-Bench contributions.
Oral Answers to Questions
Rishi Sunak Excerpts(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John Nicolson (Ochil and South Perthshire) (SNP)
The Chancellor of the Exchequer (Rishi Sunak)
The Government are committed to supporting household living standards during this difficult time for our country. That is why we announced an unprecedented package of support to protect people’s jobs and incomes and to help those most in need.
Drew Hendry [V]
It is approaching two years since this Government said that they would review the way in which dying people were treated through social security. Meanwhile, Marie Curie and many other campaigners for change estimate that as many as 6,000 people have died while waiting for a decision on their claims. This Government have repeatedly promised to end the six-month rule, which is currently forcing terminally ill people to prove how long they have left to live before they can access fast-track support, so can the Chancellor confirm that this long overdue reform will be in the Queen’s Speech?
Rishi Sunak
It would be wrong for me to pre-empt the Queen’s Speech—I know that colleagues will understand that—but I can assure the hon. Gentleman that my right hon. Friend the Work and Pensions Secretary keeps all these matters under review, and of course we want to ensure that our welfare system is compassionate and effectively supports those who need our help.
John Nicolson [V]
My goodness, what a disastrous week for the UK Government. While they have been mired in scandal and slithering through sleaze, the SNP has committed to doubling the Scottish child payment and carers allowance and to introducing a new winter heating payment. Does the Chancellor accept that these are more noble social objectives than enriching well-placed cronies?
Rishi Sunak
What I believe to be a more noble objective is to focus on the day-to-day concerns of the Scottish people at this difficult time, which involves making sure that the economy recovers, that the vaccines are rolled out and, of course, that our children receive the education they deserve. These are the issues that I know the Scottish people will care most about in the coming weeks.
Mel Stride (Central Devon) (Con) [V]
Due to the increasing concentration of wealth in older generations, the value of the average inheritance received by younger generations is becoming significantly greater through time. Does my right hon. Friend recognise this trend and the fact that it means that living standards will increasingly be determined not by skill, entrepreneurship and hard work but by chance, which will have a detrimental impact on social mobility? While it is absolutely right that families can pass on wealth to their loved ones, does my right hon. Friend none the less recognise the strong trend here, and if so, what steps might he consider taking to address this?
Rishi Sunak
I would say two things to my right hon. Friend. First, he will know that in the Budget we recently froze the inheritance tax thresholds for four years, which will provide some alleviation on the concern that he mentioned. Secondly, I believe that the best way to drive social mobility in our society is to provide everyone with the skills and education they need to make a better life for themselves, which is what this Government are committed to delivering.
Alison Thewliss (Glasgow Central) (SNP) [V]
The Tories’ two-child limit, and the rape clause, which stands part of it, are having a devastating impact on living standards, with the Child Poverty Action Group and the Church of England estimating that 350,000 families and 1.25 million children have been affected so far. Scrapping the two-child limit would be the easiest and most cost-effective way of reducing child poverty in the UK, so will the Chancellor scrap it or will he push more families into poverty?
Rishi Sunak
Since 2010, over 1 million fewer people are now living in poverty, thanks to the actions of this Government and the coalition, and 300,000 fewer children are living in poverty. That is something to be celebrated, but of course there is work to do and we remain committed to making those improvements.
Alison Thewliss
It is interesting that the Chancellor ignores the findings of the Church of England and the CPAG, which tell a very different story from that which he is willing to tell. In Scotland, the Scottish National party is committed to doubling the Scottish child payment, a new benefit described as a “game changer”, to £20 a week; providing free school meals to all primary children; and extending wraparound childcare. All of those are a huge help to the families that this Tory Government choose to ignore. Does this not demonstrate the choice of two futures: more austerity and more child poverty under the Tories, or a Scotland working hard to be the best place for a child to grow up?
Rishi Sunak
I am glad that the Scottish Government are able to use the over £3.5 billion of Barnett consequentials that have been provided by the UK Government over the next year. Child poverty is of course an important issue and one that we remain committed to, which is why initiatives such as the troubled families programme are making an enormous difference to those families. Crucially, we also know that children growing up in a workless household are five times more likely to be in poverty, which is why this Government are committed to helping people find work and find well-paid work. That is something we have an excellent record of doing.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
David Cameron said that Greensill had
“the mandate for the UK Government”.
Greensill said that it was the
“sole provider of…supply chain finance”
across Government and that it had a model that brings several benefits to the UK public sector. Does the Chancellor still believe that he was right to bring in real-terms pay cuts for public sector workers, while allowing David Cameron and Lex Greensill to target their pay packets and giving them the run of Whitehall?
Rishi Sunak
With regard to public sector pay, I do believe it is right, at a time of extraordinary strain on our public finances—when those in the private sector have seen more than 1 million jobs lost, hours cut, wages cut and many millions furloughed, with the impact that that has on them—to take a fair and proportionate approach to public sector pay. That is why this Government have said that those on the lowest pay will see a pay rise this year, as will those in the NHS. Combined with all the other pay progression, this means that a majority of people in the public sector will see their pay increase this year, despite the difficult circumstances. Of course, the national living wage is also being increased ahead of inflation, making sure that those on the lowest incomes see an uplift in their take-home pay.
Giles Watling (Clacton) (Con)
Paul Holmes (Eastleigh) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
At the Budget, I announced the location of eight freeports in eight regions of England following a highly competitive process. The Ministry of Housing, Communities and Local Government is now leading a cross-Government effort to support the winning bidders to establish their freeport, and we expect the first freeports to open later this year.
Paul Holmes [V]
My right hon. Friend authored a report in 2017, which found that freeports could easily create up to 90,000 jobs if they were as successful as the US foreign trade zone programme. Does he agree that, by voting against our Finance Bill and the setting up of freeports earlier this month, such as the Solent freeport near my constituency, the Labour party has shown that it has no interest in creating jobs and levelling up opportunity across the country, as this Government are committed to doing?
Rishi Sunak
My hon. Friend is absolutely right and I congratulate everyone involved in the Solent freeport bid. This Government are using freeports to boost jobs, investment, trade and growth. Local communities, from Merseyside to Teesside, Humber and indeed the Solent, all agree with us and it is a shame that the Labour party does not support their aspirations.
Stephen Kinnock (Aberavon) (Lab)
Marco Longhi (Dudley North) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
Our plan for jobs supports retraining and upskilling by tripling the number of traineeships, expanding sector-based work academies, incentivising apprenticeship hiring and providing funding for new, free, advanced technical courses and digital skills bootcamps under the lifetime skills guarantee.
Gary Sambrook
People across Birmingham, Northfield remember only too well the impact that an economic shock can have on livelihoods and jobs in the community following the collapse of MG Rover many years ago. Does my right hon. Friend the Chancellor agree that things such as the lifetime skills guarantee will allow many adults to to train and retrain to get back into work so that they have the security of a pay packet as we ease out of lockdown and build back better following the coronavirus pandemic?
Rishi Sunak
My hon. Friend is absolutely right. Across our nation, over 10 million adults do not have a level 3 qualification. Thanks to this Government’s lifetime skills guarantee, they will now be able to get one, and we know what that will do: it will boost both their employability and their earnings, providing them with the opportunity of a better future.
Alexander Stafford
No matter where in the country people are from, everyone should be able to get the experience and knowledge they need to get the job they want. Does my right hon. Friend the Chancellor agree that the new flexi-job apprenticeships that he announced last month will boost opportunities in sectors key to Rother Valley, especially in high-end manufacturing, creating more chances for people to experience the life-changing opportunity that an apprenticeship can bring?
Rishi Sunak
My hon. Friend makes a really important point. We were delighted to announce at the Budget a £7 million fund to create and expand flexi-job apprenticeship schemes, which enable people who need to work across multiple projects with different employers still to benefit from the high-quality, long-term training that an apprenticeship provides. That is particularly important in the industries of high-end manufacturing that he mentioned. I know that this will make a difference in his constituency.
Dr Wallis [V]
Young people have been particularly affected by the pandemic, including in my Bridgend constituency. Can my right hon. Friend outline to the House what support he is putting in place to help young people get back into work and to boost opportunities?
Rishi Sunak
My hon. Friend is right to highlight the importance of our focus on young people. More than half the jobs that have been lost since the start of the pandemic have been of those under the age of 25 and their rates of furlough are much higher than others. That is why, acting very early last year, we created the kickstart programme, which is creating hundreds of thousands of jobs across the country, including in my hon. Friend’s constituency. I urge all Members to talk to their local businesses to get them excited and joined up to the kickstart scheme, and to provide young people with the chance of a brighter future.
Marco Longhi
Small and medium-sized enterprises are often referenced as the beating heart of the UK economy, employing the largest number of people. That is certainly the case in my Dudley North constituency and across the west midlands, so will my right hon. Friend commit to working with colleagues in the Department for Education, the Department for Work and Pensions and with business to ensure that we improve engagement with small businesses, in particular in the design and funding of apprenticeship schemes, as they need providers to deliver much more at foundation level 2, which the current funding framework is less able to deliver? This would help to bring about the retraining revolution that our brilliant Mayor Andy Street talks about.
Rishi Sunak
The brilliant Mayor Andy Street is right to talk about the retraining revolution that we need and that he is implementing in the west midlands. My hon. Friend makes an important point about the flexibility of the system to support SMEs. I am pleased to tell him that starting this August we are implementing a new scheme to allow SMEs to link with larger, levy-paying businesses through a new matching and levy transfer service that will help SMEs to access that funding and to provide the level 2 or 3 apprenticeships that he rightly identified as being important. He should also know that that scheme was based on, I think, a pilot programme that was launched in the west midlands.
Mrs Sheryll Murray (South East Cornwall) (Con)
Mr Marcus Fysh (Yeovil) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
Stimulating private sector investment will be key to our economic recovery. The recent Budget announced multiple policies to help achieve that, including freeports, the Help to Grow programme, the future fund breakthrough, the life sciences investment partnership, consultations on reforming R&D tax credits and, of course, our radical new super deduction to support business investment as we recover from the coronavirus.
Mr Fysh [V]
I thank my right hon. Friend and the whole Treasury team for the extensive package of support and investment incentives over the past year; I know that businesses and employees in Yeovil are incredibly grateful for that. There is a very welcome focus in the defence review on local prosperity in procurement decisions. Will he work with me to ensure that Leonardo and our wonderful local supply chain for the helicopter industry can take full advantage of that into the future?
Rishi Sunak
I thank my hon. Friend for all the advice and support he has provided for me and the team over the past year as we have sought to develop policies that will help businesses, including Leonardo in his constituency, which I know he champions. He is right to highlight the opportunities of better procurement, particularly for our defence supply chain, and I look forward to working with him and colleagues to ensure that we can support his local businesses and many others across the United Kingdom.
Mohammad Yasin (Bedford) (Lab)
Christian Matheson (City of Chester) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
This Government have supported our economy through coronavirus with more than £350 billion to protect jobs, families and businesses. As we approach the next phase of our road map out of lockdown, our support continues to ensure that we emerge from the pandemic stronger and more united.
Christian Matheson
The Financial Conduct Authority has asked John Swift QC to investigate the mis-selling of certain business loans to small businesses, as well as their response to complaints about that mis-selling. The review has refused to take into account any loans that were settled with non-disclosure agreements between the businesses and the banks, giving a skewed view and a skewed outcome. Will the Chancellor speak to the FCA and ask John Swift to ensure that all evidence is taken into account, so that we get a proper review of the FCA’s dealings?
Rishi Sunak
I thank the hon. Gentleman for his question, which is on an important matter. I welcome the conclusions of the Swift review, and I hope he will appreciate that it would not be appropriate for me to comment or intervene on the scope of that review, as it was set up to be completely independent of Government. That said, we have always been clear that the mis-selling of interest rate hedging products is wrong, and nothing that the redress scheme does means that businesses cannot still go to the FCA, the Financial Ombudsman Service or the courts if they wish. If he wishes to raise particular circumstances with either the FCA or the Swift review, he can do that directly.
Sally-Ann Hart (Hastings and Rye) (Con) [V]
Rishi Sunak
Fishing is at the heart of many of our coastal communities, and I pay tribute to Mr Chapman and my hon. Friend for their commitment to the sector. I am happy that the Government are also championing and committed to the sector, and we have announced a £100 million fund to modernise our fleet and infrastructure. That is on top of £32 million that will replace EU funding this year, and £23 million that was made available earlier to support the sector, while adjusting to new export requirements.
Anneliese Dodds (Oxford East) (Lab/Co-op)
A year ago, the Chancellor personally announced the coronavirus large business interruption loan scheme, or “our loan scheme for large companies”, as his Department put it. Allowing Greensill Capital access to that scheme put hundreds of millions of pounds of taxpayers’ money and thousands of jobs at risk. The Prime Minister said he would publish every personal exchange related to covid contracts. Has the Chancellor published his every communication relating to Government business on Greensill, including with David Cameron—yes or no?
Rishi Sunak
We have actually responded to all the requests that I have been asked and, indeed, gone above and beyond in providing disclosure. I would say a couple of things to the hon. Lady. First of all, I am very happy to co-operate fully and constructively with both the independent Boardman review and the Treasury Committee inquiry, and those processes have begun. Secondly, on the substance, it is important to remember what was going on. We were in the midst of a financial crisis and we were keen to explore all avenues to support small and medium-sized businesses. We have heard in the House today that there are still challenges, so it was right to examine all avenues to do that. This was just one of many strands of work that the Treasury and I conducted, rightly and appropriately. It is important to notice that, in the end, we rejected the taking forward of any proposals on supply chain finance.
Anneliese Dodds
I will take that as a no. It appears that the Chancellor is less committed than the Prime Minister himself to transparency. That is not what I would call levelling with the British public. Let us see if he can level on another significant Government failure: the delay to imposing restrictions last autumn, which cost lives and our economy dear. In late October, when I asked the Chancellor if he was blocking a circuit breaker, he said,
“I agree with the Prime Minister”—[Official Report, 20 October 2020; Vol. 682, c. 889.]
Now it is being suggested that he sided with others against the Prime Minister. We have grown used to the Chancellor chopping and changing his mind, but can he explain whether this change of heart is driven by science and the needs of our economy, or by the internal politics of the Conservative party?
Rishi Sunak
The hon. Lady is confusing multiple things. She has asked me previously about circuit breakers. At the time there was a debate, appropriately, about whether a national intervention was right at a time when the epidemiology across this country was incredibly varied. That is something that the deputy chief medical officer himself spoke about at a press conference, and he said it would be inappropriate at that time to take forward national interventions. That is what I was referring to.
To go back to the shadow Chancellor’s previous comment about transparency, in fact I voluntarily published extra messages to aid the transparency of this process for people. I am fully committed to working constructively with the inquiry, both the Boardman review and the Treasury Committee inquiry. It is worth reminding the shadow Chancellor of something she herself wrote last April in The Daily Mirror:
“The ‘Coronavirus Business Interruption Loan Scheme’ seems to be stuck in the banks, and not getting to small businesses in particular, where cash flow is desperately needed.”
Well, the Government were also looking at how to get cash flow to small businesses, and I am sad and disappointed about what a conveniently short memory she has.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
Rishi Sunak
In my previous job as Minister for local government, I enjoyed many conversations with my hon. Friend about local government matters. He will know it is not for the Chancellor or indeed national Government to implement redress processes. There are established redress processes, which I would be happy to write to him about, so he can seek redress for his particular concerns.
Alexander Stafford (Rother Valley) (Con)
Afzal Khan (Manchester, Gorton) (Lab) [V]
Rishi Sunak
I am very sorry for the hon. Gentleman’s loss, and I know the whole House will join me in passing on those condolences. I am not aware of the particular proposal that he mentions, but if he writes to me, I will be happy to take a look at it.
Gareth Davies (Grantham and Stamford) (Con)
Patricia Gibson (North Ayrshire and Arran) (SNP) [V]
Rishi Sunak
The Prime Minister has appointed Nigel Boardman to conduct an independent review of these various matters. With regard to covid in general, the Prime Minister has also said that at the appropriate time there will be all the necessary lessons to be learned.
Kalifa Review of UK FinTech
Rishi Sunak Excerpts(3 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
Innovation is at the forefront of our vision for the future of UK financial services. The Government are committed to ensuring that the UK remains at the global cutting edge of technology and innovation in financial services. Creating the conditions needed for our FinTech businesses to grow and compete, both here and abroad, is central to delivering on this ambition. This is why, at Budget 2020, I asked Ron Kalifa OBE to carry out an independent review of the UK FinTech sector.
The Kalifa review of UK Fintech (the Review) [1] was published on 26 February 2021. It made a number of recommendations aimed at Government, regulators, and industry across five areas: policy and regulation, skills and talent, investment, international attractiveness and competitiveness, and national connectivity. At publication, HM Treasury welcomed the review and highlighted key recommendations including:
A Centre for Finance, Innovation and Technology to strengthen national co-ordination across the FinTech ecosystem to boost growth.
A regulatory “scale-box” to provide additional support to growth stage FinTech.
Amendments to UK listings rules to make the UK a more attractive location for initial public offerings (IPOs).
Improvements to tech visas to attract global talent and boost the FinTech workforce.
Here we have set out the actions that Government and regulators are taking in response to the review’s recommendations.
Centre for Finance, Innovation and Technology
The Government recognise the potential for a private sector-led Centre for Finance, Innovation and Technology (CFIT) as an accelerator for FinTech sector growth. It can achieve this through research, thought leadership, and working with regional FinTech hubs and national FinTech bodies to identify and address barriers to growth to the benefit of the sector across the whole of the UK. I have confirmed that the Government support the creation of this centre and will work closely with the FinTech community to make it a reality.
Regulatory scale-box
The Financial Conduct Authority (FCA) has also welcomed the Kalifa review and has set out steps it will be taking to deliver against the review’s idea for a “regulatory scale-box”, by enhancing its existing regulatory toolkit. These actions include:
Launching “Always Open” to make the regulatory sandbox available on a rolling basis.
Clarifying the scope of qualifying propositions for the regulatory sandbox to ensure as many firms as possible are able to access support.
Launching, in conjunction with the City of London Corporation, the second phase of the Digital Sandbox pilot, inviting applications to test proof of concepts to solve sustainability and climate change financial challenges.
Considering how to provide a “one-stop shop” for growth-stage firms to dock in and easily navigate what sources of FCA support are available to them.
Working with industry over coming months to identify further solutions for supporting firms manage the journey to scale.
The FCA has also announced plans to create a regulatory “nursery” for enhanced oversight of newly authorised firms, enabling an opportunity for additional support as firms become used to the requirements of regulatory compliance.
Listings regime
The Lord Hill Listings review, which was published at Budget 2021 and made recommendations to boost the UK as a destination for IPOs and optimise the capital raising process on UK markets, addresses a number of the Kalifa review’s recommendations for attracting more FinTech listings to the UK. The Government set out details of their response to Lord Hill’s review in a written ministerial statement on 19 April [HCWS919]. In parallel, the FCA plans to consult on issues raised by the Kalifa review including reducing the minimum “free float” a company must have when it lists, and whether premium listed companies can have dual share class structures.
Scale-up visa
The Government demonstrated their support for attracting international talent to the UK at Budget 2021 by announcing creation of a “scale-up visa stream”. The new stream will be created within a new elite points-based route that will allow employees with a job offer at the required skills level from a recognised UK scale up, including FinTechs, to qualify for a fast-track visa, without the need for sponsorship or third-party endorsement. The Government will set out further details by July and the new route will be implemented by March 2022.
International competitiveness
The Department for International Trade (DIT) has announced it will create two new FinTech initiatives in response to the review. The first is a new FinTech cohort within DIT’s Export Academy initiative. This will provide bespoke, 1-2-1 advice to eligible UK FinTechs who are ready to scale into key markets such as North America, Hong Kong, and Singapore. Tailored advice will cover topics such as legal, tax, regulation, accounting, and market entry matters, all of which will support the international expansion ambitions of FinTechs on the programme. This is in addition to the wide range of existing DIT export support services currently available for UK businesses. DIT will also establish a FinTech champions scheme, comprising of leading UK FinTech advocates who are successfully exporting. DIT FinTech champions will fly the flag for UK FinTech overseas and support the next generation of UK FinTech in their growth journeys through mentoring and peer to peer learning. Both initiatives will enhance UK FinTech overseas, further elevating the UK’s status as a world leading FinTech hub.
Regulation for digital finance
The review also made recommendations more broadly for the Government to develop a regulatory framework for digitalisation and emerging technology in financial services. The Government are taking forward a number of initiatives in these areas:
Along with the Bank of England, HM Treasury has launched a Central Bank Digital Currency (CBDC) Taskforce to co-ordinate the exploration of a potential UK CBDC—the Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK. A CBDC would be a new form of money that would exist alongside cash and bank deposits, rather than replacing them; the Government recognise that cash remains important to millions of people across the UK, and have committed to legislating to protect access to cash.
HM Treasury and the Bank of England are launching a CBDC Engagement Forum to gather strategic input on all non-technology aspects of CBDC.
The Bank of England is also launching a CBDC Technology Forum to gather input on all technology aspects of CBDC.
The Bank of England has launched a new account type that will allow access to central bank money by innovative financial market infrastructure providers to allow them to provide enhanced wholesale payment and settlement.
The Government have announced a financial market infrastructure (FMI) sandbox for firms exploring how to use technologies, such as distributed ledger technology (DLT), to innovate in the settlement of financial securities. This regime will aim to support firms, which are developing this new technology, with a more flexible and tailored approach to meeting requirements in current legislation, while appropriately balancing any risks to financial stability, market integrity and consumer protection. This new regime will be inspired by the FCA’s sandbox and HM Treasury will work together with the Bank of England and the FCA to deliver this.
In 2020 the Government committed to creating a framework of standards, governance, and legislation to enable a UK digital identity market. The Department for Digital, Culture, Media, and Sport (DCMS) published a draft trust framework for consultation in February this year which sets out the Government’s vision for the rules governing the future use of digital identities. A next iteration is expected to be published this summer.
The Department for Business, Energy, and Industrial Strategy is taking forward work on smart data and has committed to bringing forward legislation to better enable data sharing across sectors, including open finance. The FCA published a call for input on open finance in 2019 and published a feedback statement in March this year. This set out that the FCA will work closely with the Government as it takes forward the work on legislation as well as assessing the regulatory framework that would be needed to support open finance.
Tax
The review also highlighted the benefits of tax incentive schemes in supporting FinTech growth and at Budget 2021 the Government announced steps it is taking to ensure the schemes work as efficiently as possible, including:
A call for evidence on the enterprise management incentive scheme to seek views on whether the scheme is meeting its objectives, and examine whether more companies should be able to access the scheme.
A review of R&D tax reliefs which follows the consultation last year on expanding the qualifying expenditures to include cloud computing and data.
The Kalifa review also makes various recommendations that Government consider industry is best placed to take forward and I am grateful to Ron Kalifa for bringing these to my attention.
I would like to conclude by thanking Ron Kalifa and his team for their exceptional work in producing this seminal review. Ron has succeeded in producing insightful analysis, and garnering widespread support from industry for a suite of proposals that keep us on track for the continued success of UK FinTech.
I look forward to taking forward the steps I have outlined today.
[1]https://www.assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/978396/KalifaReviewofUKFintech01.pdf.
[HCWS938]
UK Listings Review: Government Response
Rishi Sunak Excerpts(3 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
In November last year, I asked Lord Hill of Oareford CBE to carry out an independent review of the UK’s listing arrangements. Strong public markets are a vital component of the UK economy and the Government are committed to ensuring that the UK’s markets are as competitive as possible, and to supporting the many different companies that use markets to raise capital, including technology firms as mentioned in Lord Hill’s report.
At Budget last month, Lord Hill published his UK listing review1. It made 14 recommendations. Today, I am pleased to set out how the Government intend to take forward each of the recommendations made.
Seven of the recommendations are directed towards the Financial Conduct Authority (FCA), our independent regulator. As the FCA set out in its public response on 3 March, it welcomes the report and intends to consider all the relevant recommendations carefully, including on free float, dual class share structures, and special purpose acquisition companies (SPACs). It has committed to acting quickly where appropriate, including by publishing a consultation by the summer, and a specific consultation on SPACs before that.
Six key recommendations are directed towards HM Treasury (HMT), and I outline how we will be taking forward each recommendation, in turn, below.
First, I agree to present an annual “State of the City” report to Parliament (recommendation 1). I am grateful for the suggestions provided as to what this report could cover, and I believe this would benefit the UK’s capital markets. I will present the first of these reports in 2022.
Lord Hill recommended that HMT considers an additional “growth” or “competitiveness” objective for the FCA, as part of the future regulatory framework (FRF) review (recommendation 2). The first consultation on the FRF review closed on 19 February. This review seeks to ensure the UK’s regulatory framework is fit for our future outside the EU and the first consultation welcomed stakeholder views on the current set of statutory objectives. It also sought views on the future overall accountability framework for the FCA (and PRA). The Government are currently considering the 120 stakeholder responses received in relation to this consultation and will use these to inform a second consultation later this year. I will carefully consider this recommendation as part of that process.
Three of the recommendations, on reviewing the UK’s prospectus regime (recommendation 7), considering whether prospectuses drawn up under other jurisdictions’ rules can be used to facilitate secondary listings in the UK (recommendation 8) and facilitating the provision of forward-looking information by issuers in prospectuses (recommendation 9), all deal with the UK’s prospectus regime. Again, I strongly welcome this, and agree we need to consider reforms to ensure these documents are fit for purpose. I can confirm that the Government will bring forward a public consultation on the UK’s prospectus regime later this year.
Lord Hill also raised the issue of improving the efficiency of further capital raising by listed companies (recommendation 13). This is a highly technical area, and I agree that bringing together expertise specifically on this issue will be helpful to consider what more can be done to improve capital raising processes and I am happy to help convene such a group. My officials will be considering what form this will take over the coming weeks.
One of the recommendations, concerning how technology can be used to improve retail investor involvement in corporate actions and their undertaking of an appropriate stewardship role, is directed towards the Department for Business, Energy and Industrial Strategy (BEIS). As such, this recommendation will be taken forward by BEIS as part of its wider consideration of the findings from the Law Commission’s recent scoping study on intermediated securities. BEIS expects to announce a response to the study later this year.
Finally, Lord Hill concluded by drawing the Government’s attention to other issues raised with the review illustrating how the wider financial ecosystem may impact UK listings. I would like to thank Lord Hill for bringing these issues to my attention.
I would like to conclude by again thanking Lord Hill for his work, and I look forward to taking forward his recommendations.
1 https://www.gov.uk/government/publications/uk-listings-review
[HCWS919]
Transfer of the European Bank for Reconstruction and Development Contingent Capital Liability
Rishi Sunak Excerpts(3 years, 1 month ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
I am today laying a departmental minute to advise that HM Treasury (HMT) intends—subject to the standard procedure for notification to Parliament of the assumption of contingent liabilities as described below—to transfer the contingent liability of £1,738,000,000 with respect to the European Bank for Reconstruction and Development (EBRD) from the Foreign, Commonwealth and Development Office (FCDO).
This transfer provides HMT with financial and accounting responsibility for the EBRD to match HMT’s longstanding policy responsibilities. HMT is not incurring or undertaking a new contingent liability—the EBRD’s standing contingent liability is swapping from the FCDO to the HMT balance sheet. This will not produce a net budget impact on either Department’s balance sheet as it is budget neutral and will appear as nil in the 2021-22 main estimates. The EBRD’s shareholding is held by the UK Crown, meaning it is at HMG’s discretion to determine which Department holds the EBRD’s callable liability.
The EBRD is a multilateral development bank (MDB) where HM Government (HMG) has an 8.52% capital shareholding. The Chancellor is UK governor at the EBRD, and the Foreign, Commonwealth, and Development Secretary is the UK alternate governor. The UK’s overall capital contribution totals £2,300,000,000, of which previous payments have made up the 20% “paid-in” capital contribution requiring a cash transfer. The other 80%, £1,738,000,000, is “callable capital”—the EBRD has the right to call for payment for these shares if there is a crisis affecting the bank’s assets or liabilities. No MDB has ever issued a call to payment on callable capital shares.
Although the EBRD has the right to call for payment of this callable capital incurred when the initial capital instalment was paid, no such instance has occurred in any MDB in the past. EBRD has a AAA credit rating, with a diversified portfolio of investments across a large range of countries. As of June 2020, the EBRD held €29.8 billion in equity (including shareholders’ subscribed capital) and €11.6 billion in its reserves. Again, the transfer of the contingent liability from FCDO to HMT swaps the liability between balance sheets but does not incur or undertake further liabilities. If the liability were to be called, provision for any payment will be sought through the normal supply procedure.
[HCWS860]
Oral Answers to Questions
Rishi Sunak Excerpts(3 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mark Menzies (Fylde) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
The Government are providing over £407 billion-worth of support for the UK economy over this year and next. Contained within that is considerable support for business, through discounted loans, cash grants, VAT reductions and tax deferrals, all designed to help business get through this crisis and protect as many jobs as possible.
Tom Hunt
I very much welcome the £25 million that Ipswich will be getting through a town deal, and the creation of Freeport East. Some 6,000 of my constituents are employed, directly or indirectly, through the port of Felixstowe. The town deal will create a new tech campus and a maritime skills academy to feed jobs—high-skilled jobs—in the area. Therefore, does the Chancellor agree that both the town deal money and the new freeport, together, will be vital to the creation of new local skills in Ipswich and therefore crucial to supporting local business at this difficult time?
Rishi Sunak
My hon. Friend is absolutely right, and I congratulate him; he has long campaigned on the importance of a town deal for his local community and, indeed, a freeport. I am delighted that this Budget could deliver both of those for his constituents and I agree with him that it will deliver growth, jobs and prosperity to his local area.
Laura Trott [V]
I thank the Chancellor for his earlier response. The measures in the Budget provided a lifeline to high streets in my constituency, from Westerham to Swanley. In particular, the restart grants are much anticipated. Can the Chancellor confirm when local authorities will be able to begin distributing these vital grants?
Rishi Sunak
My hon. Friend is absolutely right that we must get support to businesses as quickly as possible. I am pleased to confirm to her that guidance will be published, hopefully by the end of this week, for local authorities, and that the restart grants, which are designed to take the place of our grant scheme that runs out at the end of April, will be distributed to local authorities in the first full week—the week commencing 5 April. I hope that is a reassurance to her and her businesses, and that local authorities can get the cash to them at this vital time.
Greg Smith
The scale of support for businesses has been truly outstanding, but may I draw my right hon. Friend’s attention to the coach industry? Pre-pandemic, it already found itself heavily indebted because of requirements that the state put on it, such as the Public Service Vehicles Accessibility Regulations 2000 and Euro 6 requirements, so will he look again at how the coach industry can be supported, given the level of debt it is already in?
Rishi Sunak
I thank my hon. Friend for shining a spotlight on this important industry; he is right to do so. I know that he will be talking to the Department for Transport about regulations for the industry, but I can tell him that we will be providing local authorities with discretionary funding of around £425 million to sit alongside the restart grants. That money, at the discretion of local areas, can be used to support businesses such as coach businesses in their areas.
Mark Menzies [V]
I just want to take this opportunity to thank the Chancellor for the way in which he has engaged with me and other Members representing coastal communities throughout the lifetime of the pandemic. I know the extensive measures he has put in place, particularly for the hospitality sector, will make a huge difference to those businesses surviving. Can my right hon. Friend assure me that he will continue to monitor and work with me to ensure that local businesses get all the support they need for their continued recovery?
Rishi Sunak
My hon. Friend has been instrumental in providing on-the-ground information to me and my team about the particular situation facing hospitality businesses in coastal communities like his. He is an absolute champion for them and rightly so. They are an important part of his local economy and I am glad that this Budget supported them. He has my assurance that we will continue to work with him and them to get them the support that they deserve.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Office for Budget Responsibility estimates that £27 billion-worth of loans made under coronavirus loan schemes will never be repaid. Why is the Chancellor insisting that banks pursue that as conventional business debt, when the circumstances that gave rise to those loans are anything but conventional? Would lifting the debt burden on businesses and turning it into a contingent tax liability not help to fire up the economy, set business free and really get Britain moving again?
Rishi Sunak
What we have done is provide a scheme called Pay as You Grow to give businesses incredible flexibility and generosity in how they repay bounce back loans. Those loans at an instant can be turned automatically into 10-year loans, which reduces the monthly cash payment by almost 50%. Beyond that, there are opportunities for interest-only periods and payment holidays, all of which will support the cash flow of businesses. We also have to get a balance with the taxpayer in all of this, which is why we have taken the approach we have. I am sad that the right hon. Gentleman did not also welcome the £25 million of investment in his local community through a town deal in this Budget, which will help local businesses there as well.
Alison Thewliss (Glasgow Central) (SNP) [V]
The Save our Salons campaign presented to the gaps in support all-party group this morning. It remains hugely frustrated that the hair, beauty and holistic service industry has had no sector-specific support from the Chancellor, despite contributing £9.2 billion to the economy. Can the Chancellor explain why he has decided to ignore the calls from this largely female industry to chop VAT to 5%?
Rishi Sunak
With regard to VAT, I am sure the hon. Lady knows that the majority of businesses in the personal care sector are below the VAT threshold, so they do not actually pay any VAT. What we did do is include that sector in the more generous restart grants, so, depending on their rateable value, businesses in that sector, like those in hospitality, will be able to receive grants of up to £18,000.
Mel Stride (Central Devon) (Con) [V]
I very much welcome my right hon. Friend’s announcement in the Budget of the super deduction, which will definitely have a very positive impact on investment. Of course, it will primarily do that by pulling forward what would have been future investment into a more recent time period. What measures is my right hon. Friend looking to, to ensure that that increase in corporate investment in the shorter term is continued into the medium and longer term?
Rishi Sunak
I am glad my right hon. Friend recognises the importance of the super deduction. He is right that it will bring forward investment, but I believe it will also increase the amount of investment as well, given the attractiveness of doing so. What I would point him to are a couple of other announcements in the Budget. One is a consultation to reform our research and development tax credits regime, which we hope to conduct over the course of this year to make sure of support for investment in R&D in a way that reflects current R&D practices. Secondly, our freeports agenda contains enhanced capital allowances, and structures and building allowances, which last well beyond the period of the super deduction and will serve as an incentive for capital investment in those areas for years to come.
Gary Sambrook (Birmingham, Northfield) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
In July last year, the OBR forecast unemployment to peak at around just under 12%. Now, because of policy development, it has forecast a much lower peak of 6.5%. That means 1.8 million fewer people who are expected to lose their jobs. Whether it is through interventions such as the furlough scheme, we remain committed to protecting, supporting and creating jobs.
Gary Sambrook
The furlough scheme has helped to protect 11.2 million jobs across the UK, including nearly 6,000 jobs in my Birmingham, Northfield constituency, so I take this opportunity to thank the Chancellor for the extension until September. Does he agree that this will give businesses the vital breathing space needed to be able to plan as we go along the Prime Minister’s road map?
Rishi Sunak
My hon. Friend is absolutely right about the importance of protecting jobs. The extension of the furlough scheme on generous terms beyond the end of the road map is designed to give his local businesses and others the reassurance that they need to reopen safely and confidently. I know he will be keen to protect as many of those jobs as possible in his local area and I am delighted that this Government can support him in doing so.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
A SAGE—Scientific Advisory Group for Emergencies —adviser is reported to have said:
“I thought the chancellor was in charge. He was the main person who was responsible for the second wave.”
Does the Chancellor accept that his refusal to follow the science by pitting public health against the economy led to worse outcomes for both?
Rishi Sunak
I urge the hon. Lady to be a little bit careful about what she reads in the newspaper. At all steps in this crisis, we have indeed taken the advice of our scientific advisers. Let us go back to September, which I think is what she is referring to. At that time—as she knows from the SAGE minutes herself, which are published, rather than unsourced quotes in newspapers—the evidence was finely balanced and there were many things for Ministers to consider. The consideration at that point was that the tiered system was working and deserved to be given a chance.
Kenny MacAskill (East Lothian) (SNP)
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Chancellor of the Exchequer (Rishi Sunak)
In order to support people through the next stages of the pandemic, the Government have extended both the furlough scheme and the self-employment income support scheme through to September, which will help millions of people up and down the country.
Stephen Doughty [V]
I thank the Chancellor for his answer. The Welsh Labour Government this week announced a further £30 million to support hospitality and tourism, and freelancers working in our creative sectors are going to get a further round of support worth £8.9 million—this is targeting support to fill gaps left by the Chancellor. I accept that many people have had welcome support, but huge numbers of people are coming up to a year of little or no support because they have been excluded from UK Government support over the past year. What will the Chancellor do for all those excluded, left out and left behind the curve over the past year?
Rishi Sunak
I am glad the Welsh Government will receive more than £740 million in Barnett consequentials as a result of this Budget, which works for the whole United Kingdom. With regard to the self-employment scheme, what I can say is that we are now able to bring in those people who filed tax returns for the first time in the tax year 2019-20. That was something that many colleagues asked for. I am pleased that we were able to deliver that now that the tax deadline has passed, and it means that more than 600,000 more people will be able to benefit from this world-leading support for the self-employed.
Andrew Gwynne (Denton and Reddish) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
Taking into account all the measures announced since last March, this Government are providing more than £400 billion of direct fiscal support to the economy over this year and next. That will rank as one of the most comprehensive and generous responses of any country anywhere in the world.
David Simmonds [V]
[Inaudible]—and the further support announced for businesses. The extension of the VAT and the business rates holiday, alongside the restart grants, are particularly welcome for businesses in my constituency of Ruislip, Northwood and Pinner, especially on our high streets. Does my right hon. Friend agree that these steps will support our short-term economic recovery, and ensure that businesses have the breathing space to protect jobs as they begin to bounce back?
Rishi Sunak
My hon. Friend is absolutely right. Our priority economically is to protect, support and create as many jobs as possible, and the support that we have provided to businesses will help to do that. My hon. Friend talks about breathing space; he is right to say that measures to improve businesses’ cash flow in the short term will help give them the breathing space they need to drive our recovery as they begin to reopen in the coming months.
Stephen Timms (East Ham) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
Last week I presented to the House a Budget to protect the jobs and livelihoods of the British people, confirming more than £400 billion of support over this year and next, ranking as one of the most comprehensive responses of any country anywhere in the world. We also set out a fair and honest plan to begin fixing our public finances while also starting the work of building our future economy.
Stephen Timms [V]
How are the crucial EU negotiations on the memorandum of understanding on financial services progressing? Given its importance to the UK economy—by comparison, for example, with fishing—why was it not included in the overall deal?
Rishi Sunak
I cannot comment on ongoing negotiations; we remain committed to a constructive dialogue with our European partners regarding the memorandum of understanding, and I can confirm that those discussions are under way. With regard to financial services, I hope that the right hon. Gentleman saw the announcement of our listings review. I thank Jonathan Hill for his excellent work. We will take forward those reforms together with the Financial Conduct Authority to ensure that the UK remains one of the most attractive places anywhere in the world for companies to raise the finance they need to empower their future growth.
Dr Julian Lewis (New Forest East) (Con)
Rishi Sunak
My right hon. Friend has raised this industry with me multiple times, and he is right to do so. Although some food and drink wholesalers have been significantly impacted, others—for example, those that predominately serve the public sector—have not been, so I do not think it would be fair to provide blanket support. He talked about a postcode lottery. The other side of that coin is empowering local government and local decision making, and I believe that is the right approach. We have announced £425 million of additional discretionary support to local authorities, but I am sure that his raising the issue in the House in this way will give his local council and others the steer they need to direct support to this important industry.
Anneliese Dodds (Oxford East) (Lab/Co-op)
In 2017 the Chancellor asked a Member of this House whether Labour’s proposed increase in corporation tax
“would make it more or less likely that international investors would want to invest here in the UK?”—[Official Report, 12 September 2017; Vol. 628, c. 218WH.]
What’s the answer, Chancellor?
Rishi Sunak
I am delighted that the hon. Lady is raising the topic of corporation tax at this Budget. I feel that we have had various different versions of the Labour party policy on this topic over the past couple of weeks. What I can say is that we are honest with the British people about the challenges facing our public finances, and we have set out a fair and honest way to address those challenges. This will remain one of the most internationally competitive places anywhere in the world to invest, to grow a business and to create jobs, and this Government will always deliver on that promise.
Anneliese Dodds
Last week, the Chancellor said he wanted to “level with” the public. He mentioned a moment ago that he wanted to take an honest approach. Well, the head of the NHS just confirmed that he budgeted for the 2.1% pay rise that nurses expected, so we need a straight answer now from the Chancellor: why do the Conservatives believe that our nurses are worth less now than they were before the pandemic?
Rishi Sunak
I pay tribute to all those working on the frontline of our NHS and other public services. They are doing a fantastic job, and that is why this Government have supported the NHS with tens of billions of pounds of extra funding through this pandemic and will continue to do so. With regard to public sector pay, we set out a policy in November, but, given the situation, we were taking a more targeted approach to public sector pay to balance fairness and to protect as many jobs as possible. The hon. Lady will know that the NHS was exempted from that policy and NHS workers will receive a pay rise next year.
Saqib Bhatti (Meriden) (Con) [V]
Rishi Sunak
My hon. Friend is right to raise this important issue, as he has done with me several times on behalf of his local businesses. He is right that we are reviewing business rates. We are in the midst of that process. The next stage will be to publish all the consultation responses that we have received, which will happen shortly, and we will take forward the policy process over the course of this year. We outlined many options for potential reforms in the paper. I look forward to receiving from him some ideas on what the reforms might be. In the short term, we are providing a £6 billion tax cut in business rates, delivering a 75% discount on business rates for the vast majority of small and medium-sized businesses as they emerge from this pandemic.
Alex Norris (Nottingham North) (Lab/Co-op)
Rishi Sunak
This Government are committed to record amounts of investment in infrastructure, both road and rail, as we heard from my right hon. Friend the Financial Secretary earlier. The Budget announced upgrades for several stations in and around the midlands after representations that we heard from the fantastic Mayor, Andy Street, about the needs of his area. We remain committed to publishing the integrated rail plan in due course.
Greg Smith (Buckingham) (Con)
Ian Lavery (Wansbeck) (Lab) [V]
Rishi Sunak
A majority of those working in the public sector will see an increase in their pay this forthcoming year as a result of our pay policy. Importantly, those earning less than the median UK salary will receive a £250 increase in their pay, because we want to protect those on the lowest incomes. Even at a difficult time, that is what this Government are committed to doing.
Ben Everitt (Milton Keynes North) (Con)
Financial Statement
Rishi Sunak Excerpts(3 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
Madam Deputy Speaker, a year ago, in my first Budget, I announced our initial response to coronavirus. What was originally thought to be a temporary disruption to our way of life has fundamentally altered it: people are still being told to stay in their homes, businesses have been ordered to close, thousands of people are in hospital. Much has changed, but one thing has stayed the same. I said that I would do whatever it takes. I have done and I will do so. We have announced over £280 billion of support, protecting jobs, keeping businesses afloat, helping families get by.
Despite this unprecedented response, the damage that coronavirus has done to our economy has been acute. Since March, over 700,000 people have lost their jobs, our economy has shrunk by 10%—the largest fall in over 300 years—and our borrowing is the highest it has been outside of wartime. It is going to take this country, and the whole world, a long time to recover from this extraordinary economic situation. But we will recover.
This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people. First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis. Secondly, once we are on the way to recovery, we will need to begin fixing the public finances, and I want to be honest today about our plans to do that. Thirdly, in today’s Budget we begin the work of building our future economy.
Today’s forecasts show that our response to coronavirus is working. The Prime Minister last week set out our cautious but irreversible road map to ease restrictions while protecting the British people. The NHS, deserving of immense praise, has had extraordinary success in vaccinating more than 20 million people across the United Kingdom. Combined with our economic response, one of the most comprehensive and generous in the world, this means that the Office for Budget Responsibility is now forecasting, in its words, a
“swifter and more sustained recovery”
than it expected in November. The OBR now expects the economy to return to its pre-covid level by the middle of next year, six months earlier than previously thought. That means growth is faster, unemployment lower, wages higher, investment higher, household incomes higher.
But while our prospects are now stronger, coronavirus has done, and is still doing, profound damage. Today’s forecasts make it clear that repairing the long-term damage will take time. The OBR still expects that in five years’ time, because of coronavirus, our economy will be 3% smaller than it would have been. Before I share the detail of the OBR’s forecasts, let me thank Richard Hughes and his team for their work.
The OBR forecasts that our economy will grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast. The OBR has said that our interventions to support jobs have worked. In July last year, it expected unemployment to peak at 11.9%. Today, because of our interventions, it forecast a much lower peak: 6.5%. That means 1.8 million fewer people are expected to be out of work than previously thought. But every job lost is a tragedy, which is why protecting, creating and supporting jobs remains my highest priority.
Let me turn straightaway to the first part of this Budget’s plan, to protect the jobs and livelihoods of the British people through the remaining phase of this crisis.
First, the furlough scheme will be extended until the end of September. For employees, there will be no change to the terms. They will continue to receive 80% of their salary, for hours not worked, until the scheme ends. As businesses reopen, we will ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10%, and 20% in August and September. The Government are proud of the furlough, one of the most generous schemes in the world, effectively protecting millions of people’s jobs and incomes.
Secondly, support for the self-employed will also continue until September, with a fourth grant covering the period February to April, and a fifth and final grant from May onwards. The fourth grant will provide three months of support at 80% of average trading profits. For the fifth grant, people will continue to receive grants worth three months of average profits, with the system open for claims from late July.
But as the economy reopens over the summer, it is fair to target our support towards those most affected by the pandemic, so people whose turnover has fallen by 30% or more will continue to receive the full 80% grant. People whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant. I can also announce a major improvement in access to the self-employed scheme. When the scheme was launched, the newly self-employed could not qualify because they had not all filed a 2019-20 tax return. But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom became self-employed last year, can now claim the fourth and fifth grants. Over the course of this crisis we will have spent £33 billion supporting the self-employed, one of the most generous programmes for self-employed people anywhere in the world.
Thirdly, we are also extending our support for the lowest paid and the most vulnerable. To support low-income households, the universal credit uplift of £20 a week will continue for a further six months, well beyond the end of this national lockdown. We will provide working tax credit claimants with equivalent support for the next six months. Because of the way that system works operationally, we will need to do so with a one-off payment of £500.
And over the course of this year, as the economy begins to recover, we are shifting our resources and focus towards getting people into decent, well-paid jobs. We reaffirm our commitment to end low pay, by increasing the national living wage to £8.91 from April—an annual pay rise of almost £350 for someone working full time on the national living wage.
My right hon. Friends the Education Secretary and the Work and Pensions Secretary are taking action to give people the skills they need to get jobs or get better jobs. The restart programme—supporting over a million long-term unemployed people. The number of work coaches —doubled. The kickstart scheme—funding high-quality jobs for over a quarter of a million young people. The Prime Minister’s lifetime skills guarantee—giving every adult the opportunity for a fully funded level 3 qualification. And we want businesses to hire new apprentices, so we are paying them more to do it.
Today, I am doubling the incentive payments we give businesses to £3,000—that is for all new apprentice hires, of any age. Alongside investing £126 million of new money to triple the number of traineeships, we are taking what works to get people into jobs and making it better.
One of the hidden tragedies of lockdown has been the increase in domestic abuse, so I am announcing today an extra £19 million, on top of the £125 million we announced at the spending review, for domestic violence programmes to reduce the risk of reoffending and to pilot a network of respite rooms to provide specialist support for vulnerable homeless women.
To recognise the sacrifices made by so many women and men in the armed forces community, I am providing an additional £10 million to support veterans with mental health needs.
On current plans, the funding to support survivors of the thalidomide scandal runs out in 2023. They deserve better than to have constant uncertainty about the future costs of their care, so not only will I extend this funding with an initial down payment of around £40 million; I am today announcing a lifetime commitment, guaranteeing funding forever. I thank the Thalidomide Trust and my hon. Friend the Member for North Dorset (Simon Hoare) for their leadership on this important issue.
As well as supporting people’s jobs, incomes, the lowest paid and most vulnerable, this Budget also protects businesses. We have been providing businesses with direct cash grants throughout the recent restrictions. These grants come to an end in March. I can announce today that we will provide a new restart grant in April to help businesses reopen and get going again. Non-essential retail businesses will open first, so they will receive grants of up to £6,000 per premises. Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so we will give them grants of up to £18,000. That is £5 billion of new grants on top of the £20 billion we have already provided, taking our total direct cash support to business to £25 billion. I pay tribute to my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) for highlighting the particular needs of the personal care sector.
With my right hon. Friend the Culture Secretary, we are making available £700 million to support our incredible arts, culture and sporting institutions as they reopen: backing the UK and Ireland’s joint 2030 World cup bid; launching a new approach to apprenticeships in the creative industries; and extending our £500 million film and TV production restart scheme.
Even with the new restart grants, some businesses will also need loans to see them through. As the bounce back loan and coronavirus business interruption loan scheme programmes come to an end, we are introducing a new recovery loan scheme to take their place. Businesses of any size can apply for loans from £25,000 up to £10 million through to the end of this year, and the Government will provide a guarantee to lenders of 80%.
Last year, we provided an unprecedented 100% business rates holiday in England for all eligible businesses in the retail, hospitality and leisure sectors—a tax cut worth £10 billion. This year, we will continue with the 100% business rates holiday for the first three months of the year—in other words, through to the end of June. For the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2 million for closed businesses, with a lower cap for those who have been able to stay open—a £6 billion tax cut for business.
One of the hardest hit sectors has been hospitality and tourism: 150,000 businesses that employ over 2.4 million people need our support. To protect those jobs, I can confirm that the 5% reduced rate of VAT will be extended for six months to 30 September. Even then, we will not go straight back to the 20% rate; we will have an interim rate of 12.5% for another six months, not returning to the standard rate until April of next year. In total, we are cutting VAT next year by almost £5 billion.
The housing sector supports more than half a million jobs. The cut in stamp duty that I announced last summer has helped hundreds of thousands of people buy a home and supported the economy at a critical time, but due to the sheer volume of transactions that we are seeing, many new purchases will not complete in time for the end of March. I can announce today that the £500,000 nil rate band will not end on 31 March; it will end on 30 June. Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September, and we will return to the usual level of £125,000 only from 1 October.
Even with the stamp duty cut, there is still a significant barrier to people getting on the housing ladder—the cost of a deposit. I am announcing today a new policy to stand behind homebuyers: a mortgage guarantee. Lenders who provide mortgages to home buyers who can afford only a 5% deposit will benefit from a Government guarantee on those mortgages. I am pleased to say that several of the country’s largest lenders, including Lloyds, NatWest, Santander, Barclays and HSBC, will be offering these 95% mortgages from next month. I know that more, including Virgin Money, will follow shortly after. This is a policy that gives people who cannot afford a big deposit the chance to buy their own home. As the Prime Minister has said, we want to turn “generation rent” into “generation buy”.
So, the furlough—extended to September; self-employed grants—extended to September; universal credit uplift—extended to September; more money to tackle domestic violence; bigger incentives to hire apprentices; higher grants for struggling businesses; extra funds for culture, arts and sport; new loan schemes to finance businesses; kickstart, restart and a lifetime skills guarantee; business rates cut; VAT cut; stamp duty cut; and a new mortgage guarantee. This is the first part of a Budget that protects the jobs and livelihoods of the British people.
And, Madam Deputy Speaker, as you can see, we are going long, extending our support well beyond the end of the road map to accommodate even the most cautious view about the time that it might take to exit the restrictions. Let me summarise for the House the scale of our total fiscal response to coronavirus. At this Budget, we are announcing an additional £65 billion of measures over this year and next to support the economy in response to coronavirus. Taking into account the significant support announced at the spending review, this means that our total covid support package this year and next is £352 billion. Once you include the measures announced at the spring Budget last year, including the step change in capital investment, total fiscal support from this Government over this year and next amounts to £407 billion.
Coronavirus has caused one of the largest, most comprehensive and sustained economic shocks that this country has ever faced, and by any objective analysis, this Government have delivered one of the largest, most comprehensive and sustained responses this country has ever seen.
We are using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people, but the damage done by coronavirus, combined with a level of support unimaginable only 12 months ago, has created huge challenges for our public finances. The OBR’s fiscal forecasts show that this year, we have borrowed a record amount: £355 billion. That is 17% of our national income—the highest level of borrowing since world war two. Next year, as we continue our unprecedented response to this crisis, borrowing is forecast to be £234 billion, 10.3% of GDP—an amount so large it has only one rival in recent history: this year.
Without corrective action, borrowing would continue at very high levels, leaving underlying debt rising indefinitely. Instead, because of the steps I am taking today, borrowing falls to 4.5% of GDP in 2022-23, 3.5% in 2023-24 and then 2.9% and 2.8% in the following two years. While underlying debt rises from 88.8% of GDP this year to 93.8% next year, it then peaks at 97.1% in 2023-24 before stabilising and falling slightly to 97% and 96.8% in the final two years of the forecast.
Let me explain why this matters. The amount we have borrowed is comparable only with the amount we borrowed during the two world wars. It is going to be the work of many Governments, over many decades, to pay it back. Just as it would be irresponsible to withdraw support too soon, it would also be irresponsible to allow our future borrowing and debt to rise unchecked. When crises come, we need to be able to act, and we need the fiscal freedom to act—a freedom that you only have if you start with public finances in a good and strong place. The only reason we have been able to respond as boldly as we have to covid is because 10 years of Conservative Governments painstakingly rebuilt our fiscal resilience.
When the next crisis comes, we need to be able to act again. While our borrowing costs are affordable right now, interest rates and inflation may not stay low forever, and just a one percentage point increase in both would now cost us over £25 billion. As we have seen in the markets over the last few weeks, sovereign bond yields can rise sharply. This Budget is not the time to set detailed fiscal rules with precise targets and dates to achieve them by. I do not believe that would be sensible, but I do want to be honest about what I mean by sustainable public finances and how I plan to achieve them.
Our fiscal decisions are guided by three principles. First, while it is right to help people and businesses through an acute crisis like this one, in normal times the state should not be borrowing to pay for everyday public spending. Secondly, over the medium term, we cannot allow our debt to keep rising, and given how high our debt now is, we need to pay close attention to its affordability. Thirdly, it is sensible to take advantage of lower interest rates to invest in capital projects that can drive our future growth.
The question is how we achieve that—how we balance the extraordinary support we are providing to the economy right now with the need to begin the work of fixing our public finances. I have been and always will be honest with the country about the challenges we face, so I am announcing today two measures to begin that work. Let me take each in turn.
Our response to coronavirus has been fair, with the poorest households benefiting the most from our interventions, and our approach to fixing the public finances will be fair too, asking more of those people and businesses who can afford to contribute and protecting those who cannot. So this Government are not going to raise the rates of income tax, national insurance or VAT; instead, our first step is to freeze personal tax thresholds. We have nearly doubled the income tax personal allowance over the last decade, making it the most generous of any G20 country. We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026. The higher rate threshold will similarly be increased next year to £50,270 and will then also remain at that level for the same period. Nobody’s take-home pay will be less than it is now as a result of this policy, but I want to be clear with all Members that this policy does remove the incremental benefit created had thresholds continued to increase with inflation. We are not hiding it; I am here explaining it to the House, and it is in the Budget document in black and white. It is a tax policy that is progressive and fair.
I will also maintain at their current levels until April 2026 the inheritance tax thresholds, the pensions lifetime allowance, the annual exempt amount in capital gains tax, and for two years from April 2022 the VAT registration threshold, which, at £85,000, will remain more than twice as generous as the EU and OECD averages. We will also tackle fraud in our covid schemes, with £100 million to set up a new HMRC taskforce of around 1,000 investigators as well as new measures and new investment in HMRC to clamp down on tax avoidance and evasion. The full details are set out in the Red Book.
The Government are providing businesses with over £100 billion of support to get through this pandemic, so it is fair and necessary to ask them to contribute to our recovery. So the second step I am taking today is that in 2023 the rate of corporation tax paid on company profits will increase to 25%. Even after this change the United Kingdom will still have the lowest corporation tax rate in the G7, lower than that of the United States, Canada, Italy, Japan, Germany and France.
We are also introducing some crucial protections. First, this new higher rate will not take effect until April 2023, well after the point when the Office for Budget Responsibility expects the economy to have recovered, and even then, because corporation tax is only charged on company profits, any struggling business will, by definition, be unaffected. Secondly, I am protecting small businesses with profits of £50,000 or less by creating a small profits rate maintained at the current rate of 19%. This means that around 70% of companies—1.4 million businesses—will be completely unaffected. And thirdly, we will introduce a taper above £50,000 so that only businesses with profits of £250,000 or greater will be taxed at the full 25% rate. That means only 10% of companies will pay the full higher rate. So, yes, it is a tax rise on company profits, but only on the larger, more profitable companies and only in two years’ time. I wanted to announce this now, because I think that, for business, certainty matters. For the next two years, I am also making the tax treatment of losses significantly more generous by allowing businesses to carry back losses of up to £2 million for three years, providing a significant cash flow benefit. This means companies can now claim additional tax refunds of up to £760,000. And because of the current 8% bank surcharge, the implied overall tax rate for banks would be too high. So we will review the surcharge to make sure the combined rate of tax on the UK banking sector does not increase significantly from its current level, and to make sure this important industry remains internationally competitive.
These are significant decisions to have taken: decisions no Chancellor wants to make. I recognise that they might not be popular, but they are honest. And let us consider the alternatives. The first is to do nothing: to leave our deficit problem untreated, our debt problem for someone else in the future to deal with. That has never been the way of a Conservative Government, and nor do I believe it can be the way of a responsible Chancellor. Another alternative would be to try and find all the savings we need from public spending. But when we said at the last election that we were the party of public services, people believed us—and they were right to believe us. And when we said we would be the party that invests in new infrastructure, they were right to believe that too. The only other alternative would be to increase the rates of tax on working people—but I do not believe that would be right either. So I believe that our approach, while bold, is compatible with our duty as a fiscally responsible and business-friendly Government. This is the right choice and I am confident it will command public assent.
I have one final announcement on business tax. With the lowest corporation tax rate in the G7, and a new, small profits rate, the UK will have a pro-business tax regime. But we need to do even more to encourage businesses to invest right now. Business investment creates jobs, lifts growth, spurs innovation and drives productivity. For decades we have lagged behind our international peers. Right now, while many businesses are struggling, others have been able to build up significant cash reserves. We need to unlock that investment; we need an investment-led recovery. So today I can announce the super deduction. For the next two years, when companies invest, they can reduce their tax bill not just by a proportion of the cost of that investment, as they do now, or even by 100% of the cost, the so-called full expensing some have called for; with the super deduction they can now reduce their tax bill by 130% of the cost. Let me give the House an example. Under the existing rules, a construction firm buying £10 million of new equipment could reduce their taxable income, in the year they invest, by just £2.6 million. With the super deduction, they can now reduce it by £13 million. We have never tried this before in our country. The OBR has said it will boost business investment by 10%—around £20 billion more per year. It makes our tax regime for business investment truly world leading, lifting us from 30th in the OECD to first. And, worth £25 billion during the two years it is in place, this will be the biggest business tax cut in modern British history: bold, unprecedented action to get companies investing, creating jobs, and driving our economic recovery.
Let me now turn to duties. This is a tough time for hospitality, so I can confirm that the planned increases in duties for spirits such as Scotch whisky, wine, cider and beer will all be cancelled. All alcohol duties frozen for the second year in a row—only the third time in two decades. And right now, to keep the cost of living low, I am not prepared to increase the cost of a tank of fuel, so the planned increase in fuel duty is also cancelled.
This Budget protects the jobs and livelihoods of the British people. This Budget is honest about the challenges facing our public finances and how we will begin to fix them. And this Budget does one other thing: it lays the foundations of our future economy—the third part of our plan. If we want a better future economy, we have to make it happen. We have to do things that have never been done before.
The world is not going to be any less competitive after coronavirus, so it is not enough to have some general desire to grow the economy; we need a real commitment to green growth. It is not enough to have some general desire to increase productivity; we need a real commitment to give every business, large or small, the opportunity to grow, innovate and succeed. It is not enough to have a general desire to create jobs; we need a real commitment to create jobs where people are and to change the economic geography of this country. And we cannot strengthen our domestic economy without remaining a global, outward-looking nation. This future economy will not be created in any one Budget, but today we lay the foundations.
Our future economy needs investment in green industries across the United Kingdom, so I can announce today the first ever UK infrastructure bank. Located in Leeds, the bank will invest across the UK in public and private projects to finance the green industrial revolution. Beginning this spring, it will have an initial capitalisation of £12 billion and we expect it to support at least £40 billion of total investment in infrastructure. I know that my right hon. Friend the Member for Pudsey (Stuart Andrew) will particularly welcome the location of this new institution.
Offshore wind is an innovative industry where the UK already has a global competitive advantage, so we are funding new port infrastructure to build the next generation of offshore wind projects in Teesside and Humberside. In November, I announced that we would launch a world-leading sovereign green bond. Today, we are going further, announcing a new retail savings product to give all UK savers the chance to support green projects, as my hon. Friend the Member for North East Bedfordshire (Richard Fuller) has campaigned for.
We have also asked Dame Clara Furse to establish a new group to position the City as the global leader for voluntary, high-quality carbon offset markets. Underpinning all this will be an updated monetary policy remit for the Bank of England. It reaffirms its 2% target, but now it will also reflect the importance of environmental sustainability and the transition to net zero.
Our future economy will also address our productivity problem and support small business. Too often, smaller firms do not have the time or resources to acquire the extra skills and training they need to be more efficient, more digital and more productive. Thanks to Be the Business, we have made a good start at supporting these firms. Today, the Business Secretary and I are going further, with a new set of UK-wide schemes, Help to Grow.
First, Help to Grow: Management will help tens of thousands of small and medium-sized businesses get world-class management training. Dozens of business schools across the UK will offer a new executive development programme with mentoring and peer learning, and Government will contribute 90% of the cost—a real commitment to learn more, make more and earn more.
Secondly, Help to Grow: Digital. With the pandemic, many businesses have moved online. This has been a challenge, but we want to turn it into an opportunity. We are going to help small businesses develop digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software worth up to £5,000 each. Both programmes will commence by the autumn, and I would urge interested businesses to register today on Gov.UK/HelpToGrow. That is a real commitment to help over a hundred thousand businesses become more innovative, more competitive and more profitable.
A future economy requires us to be at the forefront of the next scientific and technological revolutions. Becoming a scientific superpower is something we can be; I do not think that is hubristic or unrealistic. Our incredible vaccination programme has shown the world what this country is capable of, so I am providing an extra £1.6 billion today to continue the roll-out and improve our future preparedness.
I want to make the UK the best place in the world for high growth, innovative companies, so I am launching two wide-ranging consultations today to make sure our research and development tax reliefs—and our enterprise management incentives—are internationally competitive.
My right hon. Friend the Home Secretary knows that a scientific superpower needs scientific superstars, so together we are announcing ambitious visa reforms aimed at highly skilled migrants, including a new, unsponsored points-based visa to attract the best and most promising international talent in science, research and tech; new, improved visa processes for scale-ups and entrepreneurs, and radically simplified bureaucracy for high skilled visa applications.
As well as support for innovation and access to talent, high-growth firms need access to capital. To do that, we are taking steps to give the pensions industry more flexibility to unlock billions of pounds from pension funds into innovative new ventures; launching a new Future Fund Breakthrough to help fill the scale-up funding gap; and changing the rules to encourage more companies to list here. Let me thank Lord Hill for leading this landmark review. The Foreign, Commonwealth and Development Office will shortly be consulting on his proposals.
Our future economy depends on remaining a United Kingdom. Millions of families and businesses in Scotland, Wales and Northern Ireland have contributed to and benefited from our coronavirus response. Central to that has been a Treasury that acts for the whole United Kingdom. That is not a political point; it is an undeniable truth. The majority of today’s Budget measures will apply directly to people in all four nations of the UK. I am taking further specific steps with three accelerated Scottish city and growth deals in Ayrshire, Argyll and Bute, and Falkirk; three more in north Wales, mid-Wales, and Swansea bay; funding for the Holyhead hydrogen hub, the Global Centre of Rail Excellence in Neath Port Talbot and the Aberdeen energy transition zone, as well as the global underwater hub and the North sea transition deal, along with the first allocations of the £400 million new deal for Northern Ireland.
Through the Barnett formula, the decisions I am taking in this Budget also increase the funding for the devolved Administrations by £1.2 billion in Scotland, £740 million in Wales, and £410 million for the Northern Ireland Executive.
Our future economy demands a different economic geography. If we are serious about wanting to level up, that starts with the institutions of economic power. Few institutions are more powerful than the one I am enormously privileged to lead—the Treasury. Along with the other critical economic Departments, including the Department for Business, Energy and Industrial Strategy, the Department for International Trade and the Ministry of Housing, Communities and Local Government, we will establish a new economic campus in Darlington. I know my hon. Friend the Member for Darlington (Peter Gibson) will particularly welcome this announcement.
Redrawing our economic map means rebalancing our economic investment. I have already revised the Treasury’s Green Book, and set out the highest sustained levels of public investment across the UK since the 1970s. But we can go further. I am announcing today over £1 billion for 45 new towns deals, from Castleford to Clay Cross, Rochdale to Rowley Regis, and Whitby to Wolverhampton. I pay tribute to local leaders—like the brilliant Mayor for the West Midlands, Andy Street—who are making the case for investment in their area.
We are creating a £150-million fund to help communities across the UK take ownership of pubs, theatres, shops or local sports clubs at risk of loss, putting more power in the hands of local people. I am also launching the first round of the levelling up fund today, inviting applications from local areas across the United Kingdom. I am grateful to my right hon. Friends the Transport Secretary and the Housing, Communities and Local Government Secretary for their support on this crucial initiative.
I have one final announcement that exemplifies the future economy. It is a policy on a scale that we have never done before—a policy to bring investment, trade, and, most importantly, jobs, right across the country, to replace the industries of the past with green, innovative, fast-growing new businesses, to encourage free trade and reinforce our position as an outward-looking, trading nation that is open to the world, and a policy that we can only pursue now that we are out of the European Union: freeports. Freeports are special economic zones with different rules to make it easier and cheaper to do business. They are well established internationally, but we are taking a unique approach.
Our freeports will have simpler planning to allow businesses to build; infrastructure funding to improve transport links; cheaper customs with favourable tariffs, VAT or duties; and lower taxes, with tax breaks to encourage construction, private investment and job creation. It will be an unprecedented economic boost across the United Kingdom. Freeports will be a truly UK-wide policy, and we will work constructively with the Scottish, Welsh and Northern Irish Administrations.
Today, I can announce the eight freeport locations in England: East Midlands airport; Felixstowe and Harwich; Humber; Liverpool city region; Plymouth; Solent; Thames; and Teesside. That is eight new freeports in eight English regions, unlocking billions of pounds of private sector investment, generating trade and jobs up and down the country. I commend Members across the House for their campaigning, but in particular my hon. Friends the Members for Redcar (Jacob Young), for Cleethorpes (Martin Vickers) and for Great Grimsby (Lia Nici), as well as inspiring local leaders like Ben Houchen, the Mayor of Tees Valley.
Let us take just one of those places—Teesside. In the past, it was known for its success in industries like steel. Now, when I look to the future of Teesside, I see old industrial sites being used to capture and store carbon, vaccines being manufactured, offshore wind turbines creating clean energy for the rest of the country—all located within a freeport with a Treasury just down the road and a UK Infrastructure Bank only an hour away. I see innovative, fast-growing businesses hiring local people into decent, well-paid, green jobs. I see people designing, manufacturing and exporting incredible new products and services. I see people putting down roots in places that they are proud to call home. I see a people optimistic and ambitious for their future. That is the future economy of this country.
And so, while this last year has been a test unlike any other, that which we are, we are. The fundamentals of our character as a people have not changed: still determined, still generous, still fair. That is what got us through the last year; it is what will guide us through the next decade and beyond. This time last year, we set out to deliver on the promises we made to the British people. But the most important promise was implicit and, in truth, is made by every Government, irrespective of their politics—and that is to do what must be done when the danger is imminent and when no one else can.
Today, we set out a plan to protect the jobs and livelihoods of the British people, but the promises that underpin that plan remain unchanged from those we pledged ourselves to 12 long months ago: to unite and lead; to level up; to create a world-class education system; to keep our streets safe; to keep our NHS strong; to support the most vulnerable; to reform and improve public services; to grow the economy; to spread prosperity; to extend the awesome power of opportunity to all corners of the United Kingdom; and, yes, to be honest and fair in all that we do.
An important moment is upon us, a moment of challenge and of change: of difficulties, yes, but of possibilities too. This is a Budget that meets that moment and I commend it to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions: —
(a) Repeal of provisions relating to the Interest and Royalties Directive (motion no. 31);
(b) Stamp duty land tax (housing co-operatives etc) (motion no. 44);
(c) Annual tax on enveloped dwellings (housing co-operatives) (motion no. 45);
(d) Customs duty (removal of steel to Northern Ireland) (motion no. 52).—(Rishi Sunak.)
Question agreed to.
Madam Deputy Speaker (Dame Eleanor Laing)
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on the succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 9 March. I call the Chancellor of the Exchequer to move the motion formally.