Oral Answers to Questions
Rishi Sunak Excerpts(3 years, 10 months ago)
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Mary Robinson (Cheadle) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
The Government recognise the significant impact of coronavirus on businesses across every region and nation of the United Kingdom, and that is why we have put in place an unprecedented series of measures to provide support, whether that is through the coronavirus job retention scheme, tax cuts, tax deferrals, Government-backed loans or cash grants.
Lucy Powell [V]
Business support that was originally designed for three months is now wholly inadequate for 12 or 18 months. Business debts and deferrals are mounting and now have to start being repaid, and the holidays are coming to an end, all at one big danger point in April. Cash grants are worth less and many still do not qualify for them. While the Chancellor might pat himself on the back, reports out this week show that nearly 250,000 businesses are likely to go bust this year, taking many jobs with them. Does he recognise that he cannot pull the plug all in one go in April, given that many businesses will not even have reopened at that point, and that with the effects of the vaccine around the corner, it makes no economic sense to allow businesses to go bust at this critical point, having supported them for so long?
Rishi Sunak
No one, least of all me, is patting themselves on the back while hundreds of thousands of people are losing their jobs and many businesses are seeing extreme dislocation as a result of what is happening in our economy. I have put in place a series of measures, but I have always said that we cannot protect or save every job and every business. The hon. Lady makes a fair point, which is why we have said that we will review all our economic measures to support people through coronavirus at the upcoming Budget, in the first week of March.
Joy Morrissey [V]
Many female business owners have found themselves working full-time jobs at home while bearing full-time responsibility for childcare and home schooling, all at the same time. May I thank my right hon. Friend for all the steps he is taking to alleviate the difficulties experienced by mothers who just want to work and contribute to the economy with their children safely back in school?
Rishi Sunak
My hon. Friend is absolutely right, and we owe mums everywhere an enormous debt of thanks for doing the enormously difficult job of juggling childcare and work at this tricky time. I know she will join me in being happy that early years settings have been open for a while, but she is right to say that the only way to sustainably solve this challenge is safely to reopen our schools as quickly as we can.
Caroline Ansell [V]
I have long believed that there was a compelling case for reducing VAT for the hospitality sector, and the pandemic-inspired cut helped to save the season between lockdowns. May I ask that my right hon. Friend, when he is looking at his Budget, considers making the cut permanent, to power the recovery across the UK, including in my destination town of Eastbourne, where one in four jobs depends on tourism?
Rishi Sunak
My hon. Friend is rightly a champion for her local tourism and hospitality businesses, and she is not alone; across the country, hundreds of thousands of these businesses employ 2 million people. Those businesses are particularly vital in constituencies such as hers, which is why we reduced the rate of VAT—it runs all the way through to the end of March. She will know that we have an upcoming Budget, where we plan to review all our measures of support.
Jake Berry [V]
As you know, Mr Speaker, many of our manufacturers here in Lancashire have worked through the pandemic. Will my right hon. Friend congratulate businesses such as J & J Ormerod plc, James Killelea and Co Ltd, WEC Group and Perspex, who not only have worked through the pandemic, but show that high-value manufacturing and the real economy need to be things the Chancellor fosters and supports in his forthcoming Budget?
Rishi Sunak
I am very happy to join my right hon. Friend in congratulating the businesses he mentioned. We know that many manufacturers, especially those in his area, have worked very hard, particularly with regard to ventilators and personal protective equipment at a time of this country’s need. He is right to say that that should play a part in our recovery. One initiative I would point to, which I believe will be in and around his area, is the Made Smarter partnership between Government and high-value manufacturing, which seeks to foster innovation, digital adoption and the latest and greatest management processes. It seems to be working very well and I look forward to learning more about that initiative.
Mary Robinson [V]
Cheadle businesses that faced fines for failing to submit self-assessment returns by the end of this month will be relieved by yesterday’s announcement of an extension until the end of February, as that will remove a great deal of worry and anxiety from business owners who are already under great pressure. With the original deadline only a week away, what steps will the Department take to ensure that all businesses are aware of these changes?
Rishi Sunak
As an accountant herself, my hon. Friend knows all too well the fantastic job that these people are doing, under enormous strain, at this current time. I know that, as she said, she warmly welcomes the announcement yesterday by Her Majesty’s Revenue and Customs to waive penalties until the end of February for late filers. She is right to say that we must make sure that everyone is aware of this, and we are doing everything we can, on all our channels of communication, to get this news to businesses. I ask other colleagues across this House to do exactly the same in their constituencies.
Mel Stride (Central Devon) (Con) [V]
There is a looming bloodbath for many businesses at the end of March, when the moratorium on commercial landlords taking action against tenants in arrears comes to an end. Does my right hon. Friend recognise that acute danger? What action might he consider taking to avoid it?
Rishi Sunak
My right hon. Friend knows that the Secretary of State for Housing, Communities and Local Government is engaged with that issue and has worked with the industry to put in place various codes of practice to encourage good and constructive dialogue between landlords and tenants throughout a difficult situation. There are promising signs that that is happening.
Stephen Kinnock (Aberavon) (Lab)
Andrew Griffith (Arundel and South Downs) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
The Government are clear that we will drive growth by investing in infrastructure, innovation and skills. In doing so, we will build back better and greener as we recover from the economic impact of coronavirus, starting, of course, with the Prime Minister’s green 10-point plan.
Andrew Griffith [V]
I thank my right hon. Friend for his answer. Does he agree that the UK is exceptionally well positioned to prosper from the initiatives he referred to, and that this is another example of the Government’s unleashing Britain’s potential?
Rishi Sunak
My hon. Friend is absolutely right—our 10-point plan can create hundreds of thousands of jobs up and down the country. He is also right that we can lead the world in this journey. We have been one of the fastest countries to decarbonise over the past few years and are one of the leading countries not only in phasing out coal and internal combustion engine vehicles but in offshore wind and carbon capture and storage. Where Britain goes, hopefully the world can follow.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
This year, the UK Government have a chance to show global leadership on the climate emergency
as the host of the UN climate change conference in Glasgow. Green gilts will be a vital part of the transition to a clean economy. Last year, the Chancellor promised to launch the first ones this year. Will he tell us when and why not yet?
Rishi Sunak
We are doing the technical work required to make sure that the launch of our green gilts is successful. I hope to provide an update at the Budget, but the hon. Lady can rest assured that we are working very hard at it. As I said, this will be the first step in building out a green curve. By doing that and making sure that the curve has fidelity in terms of confidence in where the money is going, we can unlock investment for the private sector across the economy. I know that she will join me in welcoming that progress.
Alex Norris (Nottingham North) (Lab/Co-op)
Paul Blomfield (Sheffield Central) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
We have secured an unprecedented free trade agreement with the European Union—the first free trade agreement that the EU has ever reached based on zero tariffs and zero quotas. Across sectors and regions, it is a good deal that will protect jobs and investment.
Paul Blomfield [V]
The assessment conducted by the Treasury in 2018 concluded that there would be significant regional variation in the impact of any Brexit deal. We are certainly seeing that, with fishing fleets grounded, manufacturers hit with extra costs, and the Department for International Trade apparently advising businesses to move parts of their operation to the EU to avoid problems. It is clear that there will be a significant regional impact. Does the Chancellor agree that he needs to redress that regional damage from the Brexit deal? Alternatively, does he agree with the new Business Secretary’s comments in “Britannia Unchained” that regional division is an “irrelevant” debate?
Rishi Sunak
No one can doubt the Government’s commitment to uniting and levelling up across our United Kingdom, with an unprecedented infrastructure investment programme. Notably in the spending review, we announced something called the levelling-up fund, which will fund the infrastructure of everyday life in communities up and down the country, on top of our once-in-a-generation increase in infrastructure investment in road, rail and broadband that will benefit equally all parts of our United Kingdom.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
The Chancellor of the Exchequer (Rishi Sunak)
Throughout this crisis, our overriding economic priority has been to support people’s jobs and businesses through a range of measures worth more than £280 billion, including the furlough scheme, tax cuts, tax deferrals, loans and grants. There will be a Budget on 3 March, when we will set out the next steps in our economic response to coronavirus.
Tracy Brabin [V]
Last week the Chancellor received a detailed and costed policy proposal for a targeted income grant scheme, written by Rebecca Seeley Harris and supported by the gaps in support all-party parliamentary group. That scheme would be a vital first step in giving meaningful financial support to many of the millions who have been locked out of the current schemes and who are desperate, after nearly a year of the covid pandemic. Can the Chancellor tell us today whether he plans to progress with that proposal, or does he have another scheme in mind for the millions in need of support?
Rishi Sunak
I am happy to tell the hon. Lady that my right hon. Friend the Financial Secretary to the Treasury met the authors of the report back in December and is considering it alongside all the other submissions that we receive at the Treasury.
Mr Marcus Fysh (Yeovil) (Con) [V]
Rishi Sunak
My hon. Friend is right about needing the private sector to drive growth and create jobs. I am pleased to tell him that the Prime Minister and I chaired the first meeting of the Build Back Better Business Council, where we outlined our plans to invest in infrastructure, innovation and skills alongside businesses. We have also established a new Office for Investment, led by Lord Grimstone, which is charged with securing high-value investment opportunities, and I look forward to hearing from him ideas that we can productively take forward.
Anneliese Dodds (Oxford East) (Lab/Co-op) [V]
In recent days, the Treasury has been at loggerheads with the Department for Work and Pensions, insisting on taking £20 a week from the pockets of 6 million families. It has also been at loggerheads with the Scientific Advisory Group for Emergencies, by claiming that financial hardship is not inhibiting self-isolation. Why is the Treasury putting our economic and health recovery at risk in this way?
Rishi Sunak
The hon. Lady should not believe everything she reads in the newspapers. The Treasury and this Government have put in place a comprehensive and generous set of support to help people get through this crisis, and the results show that we have protected those on the lowest incomes the most.
Anneliese Dodds
I was actually following the words of the Secretary of State for Work and Pensions and of SAGE, but I appreciate the Chancellor’s response. The kickstart scheme was much heralded, but yesterday we learned that it appears to be missing out around 99 of every 100 young jobseekers. What does the Chancellor say to them today?
Rishi Sunak
I am not entirely sure I know the figures that the hon. Lady is referring to. What I can say is that, since this scheme was announced at the beginning of July and opened for applications in September, it has created over 120,000 jobs for young people. That is, I think, an extraordinary achievement. I pay tribute to the team at the DWP for doing that. I am grateful to the thousands of businesses that are taking part in the scheme. They are working with us to provide hope and opportunity to a generation of young people so that they are not scarred by coronavirus, but can look forward to a brighter future.
Jason McCartney (Colne Valley) (Con) [V]
Rishi Sunak
My hon. Friend will I hope appreciate that the various things he just mentioned total about, I think, £20 billion or £30 billion, so he will understand it is reasonable that we consider all these things in the round at Budget, when we will set out the next stage in our economic response to coronavirus.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Office for Budget Responsibility estimates that HMRC will forgo around £800 million in customs income and VAT over the next year. Some is deferred, but much is forgone. Will the Chancellor tell us what he is doing to make sure that that number shrinks and that revenue comes in at a time when the Exchequer needs it really very badly?
Rishi Sunak
I will have to go and check the exact figures, if the hon. Lady will forgive me for not knowing the specific paragraph that she refers to. In general HMRC is providing easements over the next few months as we transition to a new set of trading relationships, but she can rest assured that we are always mindful of the impact on revenue and intend fully—very much so—to have a robust set of mechanisms in place. As she will know, there is a phased response for getting to that point between now and July, and hopefully we can work with her to make sure that that path is as seamless as possible.
Chris Grayling (Epsom and Ewell) (Con) [V]
Christian Matheson (City of Chester) (Lab)
Rishi Sunak
It is absolutely right that businesses get the funds as quickly as possible. What I would say is that central Government have disbursed that funding to local councils across the country, so it is actually for businesses to take up with their local authority why they have not received the money. There are two sets of grants: there are of course our monthly grants, which have been going for a while now, and the one-off payments of up to £9,000 that we announced earlier this year. But the hon. Gentleman is right to urge urgency. I know my colleagues in the Business Department are doing exactly that with local councils, but ultimately the responsibility will lie with individual councils.
Matt Vickers (Stockton South) (Con)
Patricia Gibson (North Ayrshire and Arran) (SNP)
Rishi Sunak
I am happy to look at the specific question the hon. Lady raises, but she will know that in the last Budget we introduced a manifesto commitment to bring in neonatal leave, which was warmly welcomed and many had campaigned for, and I know will make a difference to families up and down the country.
Mark Pawsey (Rugby) (Con) [V]
Mr Virendra Sharma (Ealing, Southall) (Lab) [V]
Rishi Sunak
The hon. Gentleman can write to me with the specific issue he has with the guidance, but in general the grants have been functioning, I think, very well and local authorities are getting them out to businesses. They also have access to discretionary funding. As the name suggests, although there are broad guidelines, ultimately that funding is to be at the discretion of individual local authorities.
Economic Update
Rishi Sunak Excerpts(3 years, 10 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Before I begin, I am sure the whole House will join me in sending our very best wishes to my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire). I have been fortunate in having worked closely with him, and he is one of the nicest and most decent people in politics —a fantastic Minister and a tireless advocate for his constituents. We all look forward to his speedy recovery and to seeing him back in this place as soon as possible.
Last week, the Prime Minister set out the actions that we must take to control the spread of coronavirus. With your permission, Mr Speaker, today I will update the House on the economic situation we currently face, the action we are taking to support the British people and businesses through the crisis, and the factors influencing our outlook.
As the House knows well, coronavirus has already caused significant harm to our economy. The scale of the impact bears repeating. GDP fell by 18.8% in the second quarter of 2020. While the economy grew as the country opened up over the summer, it remained 6.7% smaller than it was before the crisis. The Office for Budget Responsibility’s November forecast showed GDP falling again in the final quarter of last year and it forecast the largest fall in annual output for over 300 years. Even with the significant economic support we have provided, more than 800,000 people have lost their jobs since February. While the new national restrictions are necessary to control the spread of the virus, they will have a further significant economic impact. We should expect the economy to get worse before it gets better.
In response, the Government have put in place a comprehensive economic plan. We have provided a fiscal stimulus of over £280 billion to fund our plan for jobs, to support public services like the NHS, and to provide financial support for millions of people and businesses. Some 1.2 million employers have furloughed almost 10 million employees. Almost 3 million people have benefited from our self-employment grants, taking the total support for the self-employed to nearly £20 billion. Over 1.4 million small and medium-sized companies have received Government-backed loans worth over £68 billion. Tens of billions of pounds of tax cuts, tax deferrals and cash grants have been delivered to businesses, and the United Kingdom Government have guaranteed at least £16.8 billion of additional funding for the devolved Administrations in Scotland, Wales and Northern Ireland.
In response to the new national lockdown, we are extending and increasing our financial support. We are providing a bridge for people and businesses until the economy reopens, to give them the chance to rebuild productive capacity. To do that, we have extended the furlough scheme to April, we are supporting self-employed people with a fourth income grant, and we have announced, alongside the introduction of new restrictions, an extra £4.6 billion to protect UK jobs and businesses. All business premises in England that are legally required to close, including in retail, hospitality and leisure, can now claim one-off grants of up to £9,000 for each of their business premises, benefiting more than 600,000 businesses and coming on top of the existing grants worth up to £3,000 paid each month. We have also made discretionary funds of £500 million available for local authorities in England to support local businesses in those areas, on top of the £1.1 billion of discretionary funds that we have already provided to local councils.
Sadly, we have not been and will not be able to save every job and every business, but I am confident that our economic plan is supporting the finances of millions of people and businesses. Across almost all areas of economic policy, we are providing comparable or greater support than all our international peers. As the Office for Budget Responsibility, the Bank of England and the International Monetary Fund have all recognised, our economic response is making a difference by saving jobs, keeping businesses afloat and supporting people’s incomes.
Looking forward, there are signs of hope. First, with the vaccine, we can start to see a path out of coronavirus. Vaccine roll-out is our most important economic lever and we have made available over £6 billion. We have now administered over 2.4 million vaccine doses across the United Kingdom, and by 15 February we aim to have offered a first vaccine dose to everyone in the top four priority groups identified by the Joint Committee on Vaccination and Immunisation.
Also, the data shows that there are potential sources of underlying resilience in our economy. In aggregate, we have seen the household savings ratio reach record levels and, taken as a whole, corporate sector cash buffers have improved. And of course, we have now agreed a new trading partnership with the European Union. We have removed that uncertainty from businesses and can now start to do things differently and better—not least in financial services, where in November I outlined for the House our plan to reinforce the UK’s position as a globally pre-eminent financial centre.
While the vaccine provides hope, the economy is going to get worse before it gets better. Many people are losing their jobs, businesses are struggling, and our public finances have been badly damaged and will need repair. The road ahead will be tough. Now it is time for responsible management of our economy, taking the difficult but right long-term decisions for our country, but I am confident that, with this comprehensive support that the Government are providing and, above all, the determination, enterprise and resilience of the British people, we will get through this. I commend this statement to the House.
Anneliese Dodds (Oxford East) (Lab/Co-op) [V]
I start by joining the Chancellor in sending my very best wishes to the right hon. Member for Old Bexley and Sidcup (James Brokenshire). I know I speak for everyone on the Opposition side of the House in wishing him a speedy recovery.
Six weeks have passed since the Chancellor last addressed this House. In that time, the Prime Minister scrapped his proposed relaxation of public health rules, introduced a new tier 4 level of restrictions for London and large parts of the south-east, and then superseded all of that with the imposition of a third national lockdown. After the Prime Minister’s most recent announcement, Parliament was, of course, recalled, and Members were given the opportunity to ask questions of the Prime Minister, the Health Secretary and the Education Secretary—but the Chancellor was nowhere to be seen. His sole contribution to a set of announcements that had profound implications for our economy was a 90-second video on Twitter, which begged as many questions as it answered.
There was no indication of how long the new grants are expected to cover and no clarity on how the discretionary funding for local councils has been calculated, nor of how it will be allocated. Funds being provided to the devolved nations were badged as new money, before the Treasury hastily amended its website to reflect that that money had already been committed to in December. We heard nothing about what would happen to those people who had started a new job since the beginning of November and are now ineligible for furlough. We heard nothing about what level the fourth grant for self-employed people would be set at, nor when that grant would be made available. We heard nothing for those people who have been excluded from Government schemes right from the very start, and we heard nothing about what the Chancellor would do to fix the broken system of support for self-isolation.
I was relieved to hear this morning that the Chancellor had undertaken to address the House today, but I deeply regret that, having last year blocked measures that would have helped to protect the NHS and secure our economy, today he appears to be out of ideas, urging us to look towards the sunny uplands but providing nothing new. The purpose of an update is to provide us with new information, not to repeat what we already know.
In addition, the Chancellor just now gave a highly partial picture of the state of our economy, talking of a rise in savings but not mentioning that over 5 million people are estimated to have taken on over £10 billion in debt just to get through the last year. He talked of corporate cash buffers, but did not mention that City experts have predicted that there will be over £100 billion in unsustainable corporate debt by the end of March.
The Chancellor needs to acknowledge the reality of the crisis we face—a crisis made worse by his Government’s irresponsibility, with our economy having suffered the worst recession of any major economy. He needs to act accordingly. I therefore ask him to respond to the questions that businesses and workers desperately need answered. Will he update the furlough scheme to reflect the dates of the current lockdown? When will he set out the new incentive scheme he promised to provide for businesses that will now not receive the job retention bonus? When will he provide details on the next self-employment income support scheme? What does he say to people who have been excluded from Government support schemes from the very beginning and who still are not helped by today’s announcement? How long will businesses have to make the new one-off grants last for? When will councils find out how the new discretionary funding will be allocated and on what basis it has been calculated?
Does the Chancellor believe that those who are classified as clinically extremely vulnerable should be automatically eligible for furlough if they cannot work from home? When will he fix support for those self-isolating, when the evidence for change is overwhelming? When will his much vaunted Project Birch actually start to deliver for struggling manufacturers? Will we have to wait until the Budget for recognition of all these problems and solutions to them, as was suggested by his social media account?
We had all hoped for a more optimistic start to 2021 than a new national lockdown and yet more uncertainty about the future, but the people of Britain understand that they have to make sacrifices. They are doing their bit for the national effort while the vaccine is rolled out. They are fulfilling their side of the bargain. The Chancellor must fulfil his.
Rishi Sunak
I thank the hon. Member for her response, and in particular for her comments about my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), which I appreciate.
I think that it is right, where possible in this House, that we acknowledge those areas—many areas, in fact—where there is agreement on both sides of the House: for example, on wage support, on business support, on loan guarantees, on funding for critical public services, on tax deferrals and tax cuts, on support for renters and homeowners, on support for job creation, retraining and skills, on support for children learning at home, on support for the self-employed, on support for the NHS, on support for the vaccination roll-out, and on testing. I could go on. The truth is that, politics aside, there is in fact significant unity of purpose in this place: to protect the most vulnerable; to vaccinate our people as quickly as possible; to reopen our country; and, finally, to rebuild and begin the process of recovery. Given this agreement, while it is right to acknowledge the difference in degrees and emphasis that the hon. Member poses, it is clear that on the fundamentals there is, in fact, little disagreement.
Let me turn to the shadow Chancellor’s specific areas of concern. With regard to the formula for the local authority grants, I can tell her—as was, I think, published—that the formula for the additional half a billion pounds will be the same as that for the £1.1 billion that was issued shortly before the end of last year. With regard to the furlough dates, she will be pleased to know that the change in date from the original spring date through to the new date at the end of October, before the announcement of the new scheme and the extension, will bring an additional 3 million people into coverage for the furlough scheme. I am sure that she will join me in welcoming that the scheme has protected more than 9 million jobs over the past several months. It is, of course, already possible for people to be furloughed if they are clinically extremely vulnerable or have childcare difficulties, but those decisions are, of course, to be made by individual employers and their employees. It would not be right for the Government to put a blanket mandate in place. The hon. Member is right that the Budget is the appropriate place to consider her various other questions, given the scale of the response and the fact that all our major avenues of support have been extended through to the spring.
The hon. Member made a comment about this country having experienced the worst recession out of anyone. It is important in this place that people have the right facts, particularly when those facts impact people’s confidence and understanding of what is happening. I must gently point out some facts, which I am sure the hon. Member knows, because she will have studied this carefully. She will know that, when making international comparisons between the performance of our economy and others, it is important that we are careful because everybody calculates things in very different ways. Indeed, as the Office for Budget Responsibility mentioned in its latest report—which I am sure she will be able to read—and as the Office for National Statistics has highlighted, in this country we calculate public sector output very differently from almost any other country. It is very clear that the way in which we calculate that output flatters other countries and disadvantages us when it comes to making such comparisons. As those independent forecasters have pointed out, when corrected for that difference, we find that our economic performance is actually very much in line with comparable countries. It is not the worst, and I do not think that it is good for confidence or for people’s understanding of the situation for that to be propagated.
Throughout this crisis the Government have always been pragmatic. When changes must be made, we have made them, and when help has been justified, we have always provided it. We are now so close to the end of this difficult period for so many people that I would ask the hon. Member at this time to recognise that the national interest is best served by our co-operation, not partisanship. The vaccine roll-out is the most important priority of this Government and provides us with the path to getting out of this situation, protecting people’s health and releasing the restrictions that are hampering our economic recovery. That should be our focus—I know she will agree with me on that—and it is in that spirit, in the best traditions of this House, that I hope we will be able to see out this crisis in the coming months.
Sir Bernard Jenkin (Harwich and North Essex) (Con) [V]
I thank my right hon. Friend for his statement. I welcome the continuation of the vital measures to support British business through this further period, while keeping an eye on the hospitality sector and small businesses, which continue to have a very hard time and may need extra help.
May I invite my right hon. Friend to recall how we had to put VAT on to energy-saving products before we left the European Union, because of European Union rules? Having struck VAT off sanitary products, can we look at other opportunities to use our freedoms now that we have left the EU to strike VAT off energy-saving products such as solar panels and home insulation, in order to promote the greener recovery that we want to see emerging from this crisis?
Rishi Sunak
I thank my hon. Friend for his advice and for the helpful information about the hospitality industry that he provided me with over the winter period. It has been helpful in formulating our response and I thank him for it. I also appreciate his thoughts on future tax policy, which he will know remains for the Budget. He is right to emphasise the importance of our green recovery, which was why I was pleased to make sure that we can fully fund, with £12 billion, the Prime Minister’s 10-point plan for a green recovery, of which ensuring that we upgrade the efficiency of our buildings with regard to heat and energy is a key part, with more than £1 billion put aside for that. I will bear my hon. Friend’s further thoughts in mind.
Alison Thewliss (Glasgow Central) (SNP) [V]
I thank the Chancellor for finally gracing us with his presence and for not redacting his statement for once—I suspect that was because there is so little in it that is actually new. What is also missing is the additional £375 million that he promised to Scotland on 6 January. It was lauded by the Tories in Scotland, before the Treasury back-tracked, edited the press release and decided that Scotland’s businesses were not entitled to the £9,000 that English businesses will receive. Why?
Businesses are still struggling with debt and loss of income, so will the Chancellor extend the English business-rate holiday to allow Scotland to do the same? Will he continue the reduction in VAT to assist those in the struggling hospitality sector?
The Chancellor acknowledges the 800,000 jobs lost, but not his role in their loss and the uncertainty that his stop-start furlough has caused. Will he commit to extend the furlough and the self-employment support scheme for as long as necessary, with no more arbitrary stop-start?
Still, the gaps remain—for freelancers, directors of limited companies, those refused furlough and pregnant women who have lost out, as well as those on annual pay-as-you-earn and the newly self-employed. Will those who are now submitting tax returns be included in the self-employment support scheme from 31 January? Hundreds of thousands of people are counting on being able to do that.
Will the Chancellor extend the £20 increase to universal credit, and will he finally expand it to include those on legacy benefits who have seen no increase over these past months? Will he increase the pitiful level of statutory sick pay?
I have said for months now that we will not be out of this crisis quickly, and I am sad to have been proven right. On top of this crisis, Brexit is causing chaos for Scottish exporters trying to get their goods across the border. It is no wonder that Scotland is looking on at this shambolic Westminster Government and deciding in poll after poll that independence offers a brighter prospect for our future than more of the same old Tory austerity.
Rishi Sunak
I am happy to address directly the point about funding for Scotland and perhaps clear it up. In recognition of the very difficult circumstances that the devolved Administrations were grappling with—as we all are during this crisis—the UK Government made an unprecedented decision to provide an up-front funding guarantee to provide certainty and clarity for the Scottish Government so that they could make plans in advance of individual announcements being made and the appropriate Barnett sums being made available at that time. That was something that the Scottish Government had asked for, and it was welcomed. It is now clear that the hon. Lady seems to think that that is not a good thing. The point of doing that is to provide up-front certainty, but it is still also right to keep a tally of the various announcements, as they are made, about the additional sums that they trigger for Barnett, which will net against that guarantee, and then over time the guarantee will be adjusted. If I am hearing from the hon. Lady that she would prefer not to have up-front funding guarantees and would prefer the system of knowing Barnett consequentials only on an announcement- by-announcement basis, she should please write to me and let me know. But in aggregate this year £8.6 billion in up-front funding guarantees has been made available for the Scottish Government; the most recent announcement did trigger Barnett consequentials, which will net off against that guarantee. Over time, as we have done, that guarantee will be increased over the year as new announcements are made. I am not sure I could tell from the hon. Lady’s response whether businesses in Scotland have been offered an additional grant of up to £9,000 to help them get through the next few months. Perhaps she can clear that up for Scottish businesses, because that is what the UK Government are providing for businesses here in England. That money has been made available to the Scottish Government through the guarantee, and, of course, we look forward to seeing how they use it.
It is also important that this is not just about Barnett consequentials; we have always adopted a UK-wide approach to our support. Whether we are talking about the furlough scheme, all the things we have done on VAT, supporting people into employment or indeed our loans, many businesses and people in Scotland have been supported, because this is one United Kingdom Government and we will make sure that we provide support for our citizens in every single part of it.
Tom Hunt (Ipswich) (Con)
The hospitality sector in Ipswich certainly welcomes the grant support the Chancellor announced last week—that is very welcome—but about a month ago I held a virtual roundtable event for the sector in Ipswich and it was probably one of the most sobering virtual meetings I have taken part in since this pandemic started. It was very sad to hear about the extreme anxiety those in the sector have; they have poured their whole lives into the businesses where they are working and there is still concern even now. So will my right hon. Friend confirm that he will be reflecting on what further support might be provided ahead of the Budget? I am talking specifically about a potential extension of the business rates holiday throughout 2021 and also the support on VAT, because there is light at the end of the tunnel but when we go into that much better place I want to make sure that The Brickmakers Arms, The Kingfisher, the Belstead Arms, Pauls Social Club and the California Social Club, which I am now a member and stakeholder of—I own part of it now that I have become a member—are there with us.
Mr Speaker
Order. It has to be a shorter question. We have put you on early to make sure you can get things mentioned, but you cannot make a speech in a question. I think we more or less have the drift of it.
Rishi Sunak
My hon. Friend is a fantastic champion for his local hospitality industry, and I very much hope I have a chance to visit the California Social Club in Ipswich at some point in the future. I will bear in mind his suggestions for how we can look at providing further support. This is a vital industry for our local communities and nationally it employs more than 2 million people, and he rightly says that they have borne the brunt of these restrictions and deserve our support as we emerge on the other side.
Christine Jardine (Edinburgh West) (LD) [V]
First, may I associate myself and my Liberal Democrat colleagues with the remarks made about the right hon. Member for Old Bexley and Sidcup (James Brokenshire), whom I have come to respect greatly during my time here? I wish him the speediest of recoveries.
What we have from the Chancellor today is just another series of patches, whereas we need a long-term strategy. We still have nothing for the many millions who have been excluded from all financial packages, and our independent retailers need support against the online behemoths. Today, we learned that already a quarter of a million businesses are facing collapse. So when will he tell us what his long-term strategy for recovery is? Will he extend the furlough through the summer? Can he tell businesses what help there will be for them now that they face an enormous burden of debt?
Rishi Sunak
All our economic support now extends all the way through the spring. We will of course have a Budget on 3 March, where we will provide an update on the next stage of our economic response to coronavirus and the economic outlook for the rest of the country as well. On the specific question regarding support for businesses as against those online, the hon. Lady will be aware that this year we implemented the digital services tax for the first time, which collects a levy on online marketplaces. That will collect significant revenue this year. It is a right step and we are working with other countries to put in place a multilateral solution, which is the best long-term way to solve the problem she highlighted.
Steve Double (St Austell and Newquay) (Con)
I thank the Chancellor for his latest announcement on grants, which has been warmly welcomed by the hospitality sector. Can he confirm that the up to £9,000 he has made available is in addition to the up to £3,000 a month that has been made available to businesses that have had to close? He will be aware that businesses in the hospitality sector will continue to face real challenges in the coming months in order to play a part in our recovery. Will he reflect carefully on what further support we might be able to make available to this vital sector in the Budget?
Rishi Sunak
I can confirm that the £9,000 is in addition to the monthly grants of up to £3,000, which means that over the next three months, businesses could receive up to £18,000 of total cash support. I will bear in mind other avenues for future support. As we come out of this, it will be important that the hospitality industry is given every possible chance to succeed and flourish.
Sammy Wilson (East Antrim) (DUP) [V]
The Chancellor has said that we are now seeing signs of hope, especially because a deal has been struck with the European Union. It does not look like that in Northern Ireland, where supermarket shelves are empty and thousands of people are being sent letters from suppliers in England saying that neither they personally nor their businesses will any longer be supplied with goods. The steel industry today has received a letter from Her Majesty’s Revenue and Customs saying that engineering firms will have a 25% tariff imposed on steel that they bring here, and companies that sell goods to GB have been told that they will not get a refund on the taxes they have to pay, even though their goods are not going into the EU. All this has been brought about as a result of either a lack of knowledge by officials in HMRC or a reneging on the promises the Government made that there would be unfettered trade and access for UK firms selling in Northern Ireland and vice versa. What is the Chancellor doing about the impact that his Department is having on businesses in Northern Ireland?
Rishi Sunak
I am sorry to hear about some of the examples that the right hon. Gentleman raised. I know that goods in aggregate continue to move smoothly between Great Britain and Northern Ireland, and I am not aware of any significant queuing. Individual issues are being addressed by UK authorities. My right hon. Friend the Chancellor of the Duchy of Lancaster is talking with colleagues across the House to make sure that we are kept abreast of any particular issues, so that we can look to resolve them as we can.
Robert Halfon (Harlow) (Con) [V]
The Chancellor will know that I have worked hard and lobbied for financial support for Harlow’s small businesses, and I really welcome the financial package for our town, worth well over £160 million so far. However, I have been contacted by many businesses in my constituency that have yet to receive much of the grant funding they have been allocated, such as Carol Bush, the wonderful landlord of the Golden Swift pub, because Harlow Council is yet to distribute it. What steps can he take to ensure that councils across the country distribute these grants from the Government immediately, as they should have already done, to help our hard-pressed businesses?
Rishi Sunak
My right hon. Friend is right that this cash should get to businesses as quickly as possible. I can confirm that the guidance will be published this week, and cash from central Government should be with local authorities by the end of this week, at which point it will be up to them to distribute it as quickly as possible. I know that they have been focused on this in the past several months, so hopefully this process can be as quick as we all need it to be.
Bill Esterson (Sefton Central) (Lab) [V]
Infection rates in Sefton have more than doubled in the last week, and hospital admissions are up by 50%. Those people who have been excluded from financial support so far want to reduce infection levels and hospital admissions by staying at home, protecting the NHS and saving lives—they want to play their part too, but they need the Chancellor’s help to do so. What is his objection to using the £2 billion that the large retailers have returned in unused business rate relief to enable the many freelancers, self-employed people, people who run small firms and people who changed jobs at the wrong time to play their part in the national interest while we wait for the vaccine to be rolled out?
Rishi Sunak
I think that the Opposition had called for that money—the £2 billion—to be used to support small businesses, particularly retail and hospitality businesses, which we have now supported to the tune of £4.5 billion; I know it would be nice to spend the same money twice. With regard to those who need supporting for self-isolation purposes, we have made available £500, on a means-tested basis, to those who need that help, and that money is being worked through with local councils and the Department of Health.
Dr Liam Fox (North Somerset) (Con)
Given the state of public finances, and as we look to the post-covid recovery, will my right hon. Friend resist any calls, in his forthcoming Budget, for increases in public expenditure? This needs to be a private-sector-driven recovery, most importantly by small businesses who will provide the employment and prosperity that we will need going forward if we are to fund our public services in future.
Rishi Sunak
My right hon. Friend is absolutely right and has spoken passionately about this throughout his entire career. I firmly agree with him: this must be a private-sector-led recovery. Government cannot and should not do everything. We can support free enterprise by investing in skills, innovation and infrastructure, but ultimately it will be those small and medium-sized businesses that create the jobs that we desperately want to see.
Derek Twigg (Halton) (Lab) [V]
Like my hon. Friend the Member for Sefton Central (Bill Esterson), I am very disappointed that the Chancellor has not given support for the many self-employed people who are not getting help, but my question is on another issue. The Chancellor appears to have little appreciation of how low-paid people manage to survive from week to week. Given the huge coverage today pleading with people to stay at home and follow the rules, I would have expected him to have announced better support for those who need to isolate. The fact remains that some people who should be isolating will go into work because they are struggling to put food on the table or pay their heating bills, and cannot afford to lose any income. I ask the Chancellor again: will he go away and look at what extra support can be given to ensure that people who are isolating do not lose any income and that gives them the incentive to stay at home?
Rishi Sunak
We have in fact put in place payments to financially support those who need help when they are asked to stay at home, and they are available up to £500. As we have now reduced over time the period of self-isolation, the real value of those payments has actually increased, in some cases by 20%, 30% or 40%, depending on when people were contacted. More generally, throughout this crisis the Government have always made sure that we look after the most vulnerable. That is clear in the measures that we have taken and clear in the data that was published over the summer showing that those on the lowest incomes have had their situation protected the most by this compassionate Conservative Government.
Sir Graham Brady (Altrincham and Sale West) (Con)
In normal times, a successful British aviation sector supports 1 million jobs in this country. Will the Chancellor look urgently at what can be done best to ensure a rapid recovery for the sector heading into the summer? In particular, as he prepares his Budget, will he look at whether it makes sense for us to have one of the highest levels of air passenger duty anywhere in the world?
Rishi Sunak
I thank my right hon. Friend for his question. He is right to passionately champion both our aviation and aerospace sectors, which are critical to our economy. I am grateful for the help that he gave in helping to design a test-to-release policy for quarantining arrivals, but also in campaigning for business rates relief for airports—up to £8 million per airport, which is benefiting dozens of our regional airports up and down the country. I will bear in mind his suggested measures for forthcoming Budgets, but, like him, I want to see our industry return to its strength.
Gavin Newlands (Paisley and Renfrewshire North) (SNP) [V]
Just for the record, the Chancellor said that he was unsure of what the Scottish Government were going to do with regard to the business top-up grants. It has just been announced that larger hospitality businesses will receive up to £25,000 in Scotland. Due to his intransigence, it looks like the 3 million excluded will be going a full calendar year without support. That is absolutely shameful. The fact that the £20 per week uplift to universal credit does not apply to legacy benefits is equally shameful. Can the Chancellor tell my constituents about to lose that £20, when Minister after Minister admits that they could not survive on universal credit rates, why and how he expects so many of our constituents to do just that?
Rishi Sunak
The Scottish Government obviously have control over their tax-raising powers and indeed have the ability to top up and design benefits, so if that is something that they are keen to do, they have the ability to raise the tax to fund a permanent uplift in the welfare system. I am sure that that is an opportunity that the Scottish Government can take up if they want to and see fit to do so.
Neil O’Brien (Harborough) (Con) [V]
As well as the 18,000 people in my constituency who benefited from the furlough, businesses here have benefited from more than £50 million-worth of loans. As we move into the recovery, we need to make sure that they are creating jobs and are not held back by excessive debt repayments. What will the Chancellor do through pay as you grow or other schemes to make sure that they can get on with the business of creating wealth and creating new jobs?
Rishi Sunak
My hon. Friend is absolutely right about the importance of cash flow, and he is right to highlight pay as you grow, which means that the 1.3 million businesses that have benefited from bounce back loans will have the opportunity significantly to reduce and extend their repayments for those loans. By extending the repayment term to 10 years from five, we have cut the average monthly payment by almost half from just over £500 to just over £300. Businesses also have the option to move to interest only, which further reduces the payment to around £60 or £70 on a typical loan. That extra cushion will ensure that businesses can save their cash for driving their businesses forward as they reopen after these restrictions.
Stephen Farry (North Down) (Alliance) [V]
I acknowledge the scale of the financial support that has been provided by the Chancellor, but almost a year on there is a stubborn refusal to address the needs of those who are excluded often by what are seen as very arbitrary rules. Will the Chancellor confirm that the Treasury has indeed received a number of constructive proposals on how existing schemes can be modified without the risk of fraud? Will he commit to giving those proposals a fair consideration and, where appropriate, to making back payments?
Rishi Sunak
I am happy to assure the hon. Gentleman that my right hon. Friend the Financial Secretary to the Treasury has met various groups and has received various proposals, and of course we will give those proposals fair and due consideration.
Siobhan Baillie (Stroud) (Con) [V]
Stroud and the south-west is packed with creative people and industries that need innovative support right now. Specifically, many UK film and TV productions have struggled to get insurance for costs related to covid-19. Can my right hon. Friend outline for the House what the Government are doing to support this £4 billion UK industry?
Rishi Sunak
My hon. Friend is absolutely right to highlight the importance of the creative industries to the UK economy and, indeed, to our social or cultural capital. That is why the Government have created a £500 million film insurance scheme, to which she rightly alluded. More than 100 different film productions have taken advantage of the scheme so far and it is currently safeguarding over 14,000 jobs. It is that kind of thinking that we hope can help drive our recovery and support the industry that she rightly champions.
Charlotte Nichols (Warrington North) (Lab)
In line with advice from the Royal College of Obstetricians and Gynaecologists, the Royal College of Midwives, the TUC and Maternity Action, will the Chancellor of the Exchequer today commit to amending the furlough scheme to cover the cost of maternity suspensions on full pay for women who are 28 weeks or more pregnant or otherwise medically advised to shield?
Rishi Sunak
There are specific provisions in place in guidance for employers for calculating pay with respect to periods of maternity. Hopefully, those are clear, but I am very happy to look into the hon. Lady’s specific point.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
My right hon. Friend is aware how good Bridgwater and Taunton College is and how many apprentices it is training for Hinkley Point and many other organisations. One of the unforeseen consequences of the pandemic is that £8 million of the college’s funding goes into training those people but, unfortunately, a lot of employers are not taking on apprentices, or are making them redundant, so those young people are not getting the chance to finish their training in the skills they need to get jobs. Can we urgently examine ways to ensure that they and the colleges are empowered to train those young people and get them into the workplace as soon as possible?
Rishi Sunak
I am fairly certain we have already put in place a new matching services for apprentices who, sadly, are unable to complete their apprenticeship with their current employer, but I am happy to get the details and write to my hon. Friend about that. More broadly, like him, I support passionately further apprenticeships, which is why we have given companies a £2,000 bonus to take on a new apprentice and provided additional funding to both businesses and colleges to pay for the associated training.
Alison McGovern (Wirral South) (Lab) [V]
Thank you for calling me, Mr Speaker, and well done Chorley FC!
If the only economic message is quibbling about how statistics have been used, there is no message. Now that the Chancellor is with us, can I ask him, if he thinks there is so much unity of purpose, does he really stand by the plan to cut £20 a week from universal credit and to maintain the cruel two-child policy? I give him the opportunity to make an announcement and do something today to make sure that his appearance before us in the House today is not a total waste of time.
Rishi Sunak
At the beginning of the pandemic, we put in place a temporary uplift in universal credit, which lasts all the way through to the end of this year. Of course, future tax and welfare decisions will rightly be made at the Budget.
Alexander Stafford (Rother Valley) (Con) [V]
Labour-run Rotherham Council took a long time to devise a discretionary scheme for businesses and individuals excluded from support during the first lockdown, and ended up handing back millions of pounds to the Government because it had not distributed the money. Can my right hon. Friend assure me that the Government have given councils the flexibility and support necessary to ensure that local businesses and the self-employed receive the full help they deserve, and that councils have a duty to distribute funds speedily and effectively, so that that mistake is never repeated?
Rishi Sunak
I can give my hon. Friend that assurance. The funding is indeed discretionary. Obviously, I and the Government do not know the exact economic circumstances in every local area and it is right that local authorities are best placed to make those discretionary decisions. They know their areas and how best to support their businesses, and our guidance gives them the discretion to do so.
Steve McCabe (Birmingham, Selly Oak) (Lab) [V]
The Chancellor says he is supporting 95% of the self-employed—a claim he knows is disputed—but even if we accept his figures, does that not mean that 250,000 people lose out? Surely writing off a quarter of a million people and their families is not what he means by “whatever it takes”?
Rishi Sunak
Those figures are not disputed; they are fact, based on the returns we have. Of the returns we have from people who are majority self-employed, 95% qualify and are eligible for support. The 5% who are not, to whom the hon. Gentleman alludes, are excluded because their income is greater than £50,000. He will have heard me say before that the average income of those people is £200,000, and I think it is right that we target support on those who most need our help.
Dr Kieran Mullan (Crewe and Nantwich) (Con) [V]
I thank the Chancellor for the further one-off grants for closed businesses of up to £9,000. Businesses in Crewe and Nantwich are very ready for the cash, but can he assure them that they do not need to choose between those one-off grants and the monthly grants—that both are available to affected businesses?
Rishi Sunak
I am happy to confirm that that is absolutely the case. Businesses do not have to choose: they will continue to benefit from the monthly grant of up to £3,000 a month, and on top of that, to help them to get through this difficult period till the spring, they can additionally receive a one-off grant of up to £9,000. That means that cumulatively over the next three months, businesses could receive up to £18,000 of support. I know that my hon. Friend’s businesses will warmly welcome that. He has spoken to me at great length about supporting his local hospitality industry, and I hope that this helps.
Mr Alistair Carmichael (Orkney and Shetland) (LD) [V]
The Chancellor’s assertion that the Prime Minister’s trade deal means that businesses can now start to do things differently and better will have been heard with total incredulity by anyone whose business involves the export of seafood. The new procedures for export are a bureaucratic mess that has brought export trade to a grinding halt. One local fish trader told me this morning that a single consignment now has to go with no fewer than 17 different attachments, and another told me on Friday that he had lost £50,000 on a single consignment that he had been unable to export. What is the Chancellor going to do to offer help to fish exporters to get them through this very difficult time—difficult because of the Department for Environment, Food and Rural Affairs’ own rules and procedures?
Rishi Sunak
What this deal ensures is that all those businesses that the right hon. Gentleman mentioned have tariff-free access to European markets. Otherwise, there would have been significant tariffs on those exports. He is right that there are changes to our trading relationship. That has always been the case, and the Prime Minister and the Government have been clear about that. I know that my right hon. Friend the Chancellor for the Duchy of Lancaster is working through individual issues as we look over time to streamline and improve all our processes. The right hon. Gentleman will also know that we have invested a huge amount of resource in the IT systems at DEFRA and in providing support for those businesses that need help to fill out various customs forms and meet new procedures.
Jo Gideon (Stoke-on-Trent Central) (Con) [V]
I welcome the £4.6 billion in grants announced last week for the retail, hospitality and leisure sectors. As my right hon. Friend will be aware, businesses in the hospitality industry have been subject to restrictions since the beginning of the pandemic, leaving the sector as one of the hardest hit financially. I have spoken to many affected business owners and workers in Stoke-on-Trent Central. As we approach the end of this financial year, with the possibility of restrictions now extending beyond it, will my right hon. Friend reassure me and businesses in my constituency that the Government will extend the existing package of measures, including the current business rates relief and VAT reduction, which act as an important lifeline for many in the sector?
Rishi Sunak
I know from visiting my hon. Friend’s local area how important hospitality businesses are to her. While I obviously cannot comment on future Budget decisions, I can give her the assurance that I remain very committed to supporting our fantastic hospitality businesses through this crisis, so that they can recover strongly on the other side.
Ian Paisley (North Antrim) (DUP)
I thank the Chancellor for his statement. Northern Ireland is facing a double whammy. First, we are coping with the economic consequences of covid, and we thank the Chancellor for the help with that, but at the same time we are also trying to deal with a protocol that is crippling businesses in Northern Ireland. South of the border, the Irish revenue authorities have said that all companies can circumvent customs to deal with this problem, but on our side of the border, HMRC is increasing the red tape. This protocol is an unmitigated disaster. Personal protective equipment can no longer get into Northern Ireland. Foodstuffs cannot get into Northern Ireland. Marks & Spencer has produced a list of 400 goods it will not bring into Northern Ireland. We now must invoke article 16, and I encourage the Chancellor to do that. I am sure that the Scots Nats are delighted they do not have a protocol now.
Rishi Sunak
I thank the hon. Gentleman for his question and for registering some of those issues with me. I know that he and other colleagues are speaking to the Chancellor of the Duchy of Lancaster about individual issues, and I will be sure to follow up with him later today. The hon. Gentleman will know, and I hope it is helpful, that we funded with £200 million a trader support service, which is helping businesses in Northern Ireland to adjust to the new arrangements. I think 25,000 at the last count had signed up, and I know that the response has been pretty good, but there is always more we can do, and I look forward to talking to the Chancellor of the Duchy of Lancaster later.
Dr Andrew Murrison (South West Wiltshire) (Con) [V]
The Treasury has done really well supporting businesses and jobs in this crisis, but directors of small limited companies are many of the people who will ultimately be paying for the Treasury’s support. What can be done, perhaps using a version of the Federation of Small Businesses’ suggestion of a directors income support scheme, to help prevent hard-working linchpins of our economy—on modest incomes taken as dividends—from falling through the cracks?
Rishi Sunak
We always will give fair and due consideration to any proposals that we receive. Indeed, the Financial Secretary to the Treasury, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) has met the FSB and received the proposal, and we will go through it in detail.
Patrick Grady (Glasgow North) (SNP)
Musicians and performers in Glasgow North have already very often been excluded from the Chancellor’s support packages, and they will find it difficult to look towards a brighter future when they then hear that the Government have failed to negotiate visa-free touring for them across the European Union. Many of us have been warning that Brexit would simply compound the economic crisis caused by a pandemic, and that kind of decision seems to prove the point, does it not?
Rishi Sunak
We have provided significant support to our cultural industries. I think it is right that we highlight the contribution they make both to our society and to our economy. I struggle to find any other countries that have matched the £1.5 billion of support we have provided, which has now gone out, I believe, to over 3,000 different cultural institutions, supporting the livelihoods and local institutions that cover performing arts, such as musicians, and we know that they will play an important part in our recovery.
Stephen Crabb (Preseli Pembrokeshire) (Con)
There are businesses in my constituency in Pembrokeshire that only made it through to the end of 2020 because of the outstanding support and intervention by this UK Government, and the funding support that the Treasury has provided for the devolved Administrations has been a key part of that. However, does my right hon. Friend share my concern that, at the same time as businesses in my constituency tell me they feel shut out of the Welsh Government’s business support grant scheme, it appears that the Welsh Government are sitting on about £1 billion of unallocated funding support? Does he agree that this is not a moment for holding back support and that we need to be getting it to the frontline, especially for small businesses?
Rishi Sunak
I thank my right hon. Friend for the question, and he is absolutely right. We must try to get our cash support out to businesses as quickly as possible; they are suffering as we speak. The Welsh Government have been provided with over £5 billion in an up-front funding guarantee, and he is right to highlight the importance of that money getting out to support the local businesses that he knows are so important to driving the future prosperity of the Welsh economy.
Kate Osborne (Jarrow) (Lab) [V]
Analysis by the Resolution Foundation, based on the number of households claiming universal credit or working tax credit in April last year, found that 34% of working-age households across the north-east stood to lose out on over £1,000 a year if the uplift is cut, as currently planned, in April 2021. Unless I am mistaken that is still the case, although the Chancellor said it was at the end of the year in answer to an earlier question, so maybe he can clarify that. Can I ask the Chancellor if he agrees with me that it would now be unthinkable to cut this lifeline given the ongoing significant impact the pandemic has had on low-income families?
Rishi Sunak
It is important to recognise some of the other things that we have put in place for next year already, notably support for over 3.5 million vulnerable households with their council tax bills—£150 each, worth £670 million in aggregate—but also increasing the national living wage above inflation, at 2.2%, providing about £350 of benefit to those on low wages. Those are the kinds of things that this Government will continue to champion.
Elliot Colburn (Carshalton and Wallington) (Con) [V]
Can I first welcome the furlough extension, as announced by my right hon. Friend the Chancellor, which will give many Carshalton and Wallington residents a great sense of peace of mind? However, some businesses have been in touch with me with concerns about the October cut-off date to be eligible to start furloughing staff, so can my right hon. Friend outline whether this decision could be reviewed or what other support businesses can access to help mitigate this?
Rishi Sunak
The change in the date from the original spring date to October will bring an additional 3 million people into the scope of benefiting from the furlough scheme, and I know that is something my hon. Friend will welcome. With regard to additional support, he will know our comprehensive plan, whether it is discounted or Government-backed loans, tax cuts, tax deferrals, VAT deferrals, business grants, business rates holidays or discretionary funding from local councils. All of that is available depending on a business’s circumstances, and I would urge his businesses to look online and see what they might be eligible for.
Caroline Lucas (Brighton, Pavilion) (Green) [V]
The Chancellor said earlier that there is “unity of purpose” across this House. One area where it is clear there is unity with everybody except for him is that more support is needed for the excluded. It frankly beggars belief that he has yet again come to this House with nothing to announce for them, so I urge him to urgently look at the directors income support scheme for directors of small limited companies, which has been on his desk since November. There are also the recently self-employed still left out in the cold, and freelancers, those who combine PAYE and self-employment, and women who have taken time out because of pregnancy all still utterly abandoned. I want to know how he has the gall to continue pretending that he is doing enough for my constituents and the millions like them who are still left in poverty and despair.
Rishi Sunak
With regard to our support for the self-employed, it is worth noting—not that you would know it from what the hon. Lady said— that almost 3 million people have benefited to the tune of around £20 billion. I do believe that that is comprehensive. It is certainly more comprehensive and generous support than has been provided by almost any other country I can find. Of course, we always look at other suggestions we receive, and I will continue to do that.
Simon Fell (Barrow and Furness) (Con) [V]
As the pandemic continues, it is only right that the Government provide further financial assistance to support jobs and businesses. That is why I welcome the £4.6 billion of funding for grants that was announced last week, which will benefit people and businesses across Barrow and Furness. However, does my right hon. Friend agree that in the long term we have to return to sustainable public finances in order to build resilience to similar shocks in the future, whatever they may be?
Rishi Sunak
My hon. Friend makes an excellent and insightful point. This is about resilience in the public finances—he used the word well. We have faced two supposedly once-in-a-generation shocks in the space of 10 years and we do not know what the future holds. What we do know is that we want to encounter the next shock that comes along in as strong a position as possible, because ultimately that will enable us to respond in as comprehensive and generous a way as we have here. That is why, over time, we must rebuild our public finances to that position of, as he said, resilience and strength.
Madam Deputy Speaker (Dame Eleanor Laing)
I wonder if hon. Members really do believe in being fair to everyone. If they do, I implore them to ask short questions—do not make statements and do not make speeches. This is a statement by the Chancellor. It is an occasion for a quick question. I have 36 people to get in and 25 minutes in which to do it. Shall we see whether Members really do want to be fair to everybody else?
Daniel Zeichner (Cambridge) (Lab) [V]
Behavioural scientists are clear that to get people to self-isolate requires that they have the capacity, motivation and opportunity to do so. So far, frankly, the £500 on offer is not achieving that. What assessment has the Chancellor made of that scheme, and what is he planning to do to improve it?
Rishi Sunak
I am not aware of any science or feedback showing that that scheme is not doing what it needs to do. The £500 is means-tested, it provides support and it has increased in real value as the number of days people are required to isolate has reduced.
Alec Shelbrooke (Elmet and Rothwell) (Con) [V]
A constituent approached me to say that many supply teachers working through agencies are not being furloughed because schools are open to key worker children, yet those supply teachers are not being called into schools because most year groups are learning remotely. Will my right hon. Friend look at flexibility within the furlough scheme in this area, similar to last time, to assist agency workers?
Rishi Sunak
I would be very happy to look at the specific point my right hon. Friend raises.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
I shadowed the right hon. Member for Old Bexley and Sidcup (James Brokenshire), and I wish him successful treatment and a speedy recovery.
About 130,000 individuals across Greater Manchester are ineligible for any support—that number is second only to London. Many of them have been shut out of support since day one, which is almost a year ago now. Will the Chancellor confirm today that he is actually looking at this important issue, and confirm whether more support for this group is actually coming their way?
Rishi Sunak
As part of the announcement made last week, half a billion pounds of discretionary funding is being made available to local councils. That comes on top of the £1.1 billion that was made available at the end of autumn last year. If local councils want, some of that funding can go to support the very people the hon. Gentleman is talking about.
Felicity Buchan (Kensington) (Con)
Financial services are very important to my constituency and to the country as a whole. I welcome the free trade agreement, but clearly there is more to be negotiated on financial services. Will my right hon. Friend outline how we can retain the strong relationship with Europe on financial services, while retaining autonomy to adapt the industry to our needs?
Rishi Sunak
I praise my hon. Friend for being a fantastic representative of her constituents when it comes to financial services. I have enjoyed my conversations with her, and I look forward to working with her and the industry to ensure that we maintain a close relationship with the EU, but also that we look to capitalise on the new opportunities, making sure that London remains a pre-eminent global centre and that the UK does its bit. Whether it is on greening the financial system or taking advantage of new digital technologies, we must lead the world, and I know that she will help me to do that.
Tonia Antoniazzi (Gower) (Lab)
The Welsh Government have not hoarded money meant for Welsh businesses, and it is dangerous to hear the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) saying such things in the Chamber. They are getting help to those businesses while the UK Government make a big fanfare over new help that turns out not to be new help at all. Will the Chancellor tell me and my constituents how much new money for Wales he has announced today?
Rishi Sunak
I am happy for the hon. Lady to refer to the answer I gave earlier, but if she would prefer that, rather than give up-front funding guarantees and certainty to the devolved Administrations in a pandemic, we returned to piecemeal funding by announcement, she should please write to me and let me know. The Welsh Government have received over £5 billion in up-front funding guarantees, and as we make announcements it is right that we highlight the amount of additional Barnett funding that flows from those announcements, so that that can be netted off against the guarantee.
Andrew Selous (South West Bedfordshire) (Con) [V]
I am delighted to learn that local authorities will be receiving additional cash at the end of this week. Could I please ask the Chancellor to do everything possible to help local authorities to get that money out of the door as quickly as possible, to help businesses’ cash flow?
Rishi Sunak
I agree with my hon. Friend about the importance of speed. We try to keep the guidance the same, and that helps local authorities. Indeed, the guidance for the £500 million discretionary funding will be the same as for the £1.1 billion, and that will help local authorities. They should have the cash by the end of this week at the latest, and I too urge them to get it out as quickly as possible.
Layla Moran (Oxford West and Abingdon) (LD) [V]
As in many places, local pubs and bars in Oxford, West and Abingdon on their knees. One of my constituents, a bar owner, has told me that her business is slowly going under and that she stands to lose everything. The £9,000 is of course welcome, but the concern is that this will delay rather than stop them going under, so will the Chancellor step in and save our locals by scrapping the rateable value cap for pubs, allowing them to access the retail, hospitality and leisure grant fund, offering rent holidays during times of enforced closure and guaranteeing now to extend the furlough scheme for as long as it is needed?
Rishi Sunak
The hon. Lady makes a good point about the importance of our local pubs. There is no rateable value cap on the grant. That was the case in the earlier iteration in the spring, but the latest grants are done by rateable value, and they are available for businesses with a rateable value in excess of £51,000. The businesses also benefit from the business rates holiday, so I hope that helps, but I share her sympathy for the industry. I know it is difficult, and we must do what we can to help them.
Gary Sambrook (Birmingham, Northfield) (Con)
The Chancellor will know that the furlough scheme and the self-employed scheme have helped to protect many millions of jobs across the UK and many livelihoods across the Birmingham, Northfield constituency, but as he said, unfortunately not every job is going to be able to be protected during the pandemic, so can he outline the measures he is taking across Government to help to support those who find themselves unemployed?
Rishi Sunak
I can give my hon. Friend my assurance that the Government’s No. 1 economic priority remains jobs and trying to help people into employment. To that end, we have created various schemes and put billions of pounds towards them, whether through doubling the number of work coaches, the restart scheme for the long-term unemployed or, indeed, our kickstart scheme to help 250,000 young people at risk of becoming unemployed to find new work in Government-funded jobs. I look forward to working with him and delivering all those vital initiatives.
Kirsty Blackman (Aberdeen North) (SNP) [V]
A number of people are still in childcare voucher schemes rather than having moved to tax-free childcare. A number of them did not realise, at the start of the pandemic, how long the impact would last, and they have now racked up large balances that they will not be able to spend before their child no longer needs wraparound childcare. Will the Chancellor please look at the people who have these large balances and consider putting in place some flexibility, or asking employers to put in place some flexibility, because they have ended up in this situation through no fault of their own?
Rishi Sunak
I am not familiar with the specific details that the hon. Lady raises, but I can see the logic of what she is saying, if I followed it correctly. I will happily have a look at that and write back to her.
James Daly (Bury North) (Con) [V]
I welcome the Chancellor’s announcement of an extra £500 million of discretionary funding for local authorities in England. Will my right hon. Friend confirm that councils have absolute discretion in the use of those moneys, including, if they so choose, the provision of grants to self-employed workers or sole traders whose businesses are based at their home address?
Rishi Sunak
I can give my hon. Friend the assurance that the grants are meant to be discretionary. It is for local authorities to make the decisions at their discretion as to how best support their local economies. The guidance should remain the same as it was before. I believe it gives local authorities the discretion they need.
Afzal Khan (Manchester, Gorton) (Lab) [V]
A supply teacher in my constituency contacted me last week after being told she would not be furloughed despite being unable to work while schools are closed. Last summer, less than half of supply teachers were furloughed. In some cases, they were furloughed at just 80% of the national minimum wage. What steps will the Chancellor now take to ensure all supply staff are able to access the furlough scheme during the lockdown and prevent them falling through the gaps?
Rishi Sunak
If I follow the question correctly, I think the guidance has already been clarified. It was already in place that childcare was a reason people could be furloughed. With regard to supply teachers, I will have a look at what the guidance says.
Mark Menzies (Fylde) (Con) [V]
I welcome the continuation of the unprecedented support provided by the Chancellor throughout this crisis. While looking forward to economic bounce back, may I call on my right hon. Friend to extend the business rate holiday and VAT reduction, which have been absolutely critical to the tourism and hospitality sector in Fylde?
Rishi Sunak
I know how important the tourism and hospitality sector is to my hon. Friend’s constituency and what a fantastic champion he is for it. I know how important those initiatives have been. Of course, future decisions of that magnitude will be for the Budget, but I will take what he says into consideration.
Stephen Kinnock (Aberavon) (Lab) [V]
Community union self-employed members have raised serious concerns about discrimination in the self-employment income support scheme for those who have taken maternity or parental leave. They point out that eligibility conditions and calculation methods chosen by the Chancellor discriminate against women because they do not exempt periods of maternity leave. What steps has the Chancellor taken to ensure that all parents, and women in particular, are not penalised in their income support payments for having children?
Rishi Sunak
The guidance on eligibility for the particular circumstances the hon. Gentleman mentions has been published. It is designed to be fair to everyone and to take into account, as best we can, everyone’s varying and different circumstances.
Dr Jamie Wallis (Bridgend) (Con) [V]
My constituency contains an award-winning nature reserve at Kenfig and some of the best surfing beaches in the world. The town of Porthcawl is a popular tourist town and Bridgend itself is an historic market town. It is no surprise, therefore, that the impact of covid-19 on the hospitality sector has really hit my constituents hard. Many have written to me recently to ask me to support UKHospitality’s recommendations on how the Government can help, in particular with an extension of VAT and business rates support. Does my right hon. Friend agree with me that every step possible should be taken to support this vital sector?
Rishi Sunak
My hon. Friend is right about the importance of this vital sector to our local communities and our economy, with hundreds of thousands of businesses and millions of people employed. Like him, I am keen to see it spring back to its former glory. I look forward to hearing from him about how best he thinks we can support that industry into the future.
Zarah Sultana (Coventry South) (Lab) [V]
Contrary to the Government’s briefings, the problem with lockdown is not support bubbles or exercising with a friend. The key problem is that people are still being forced into work, with too many non-essential workplaces open and statutory sick pay so low many cannot afford to self-isolate when they need to. Will the Chancellor provide the economic support necessary for people to stay at home by ensuring that all non-key workers who cannot work from home are furloughed on full pay, and by raising sick pay to the real living wage at £330 a week?
Rishi Sunak
With the greatest respect to the hon. Lady, I think it is best that we listen to the scientists with regard to the appropriate health restrictions. She will have heard the chief medical officer this morning giving his view on the right approach to other restrictions. With regard to support, the furlough scheme remains one of the most generous and comprehensive anywhere in the world. It is something that I am proud of and which I know is providing security to many millions of people at this very difficult time.
Esther McVey (Tatton) (Con) [V]
The Chancellor will know that the Blue Collar Conservatism group was instrumental in persuading the supermarkets to return the business rates relief that they did not need; we asked them to do so on the basis that there were many who had gone without support, and they agreed to do so on that basis. Will the Chancellor therefore ensure that that £2 billion returned by the supermarkets goes to those who have so far been excluded from support? They cannot go another three months without any income.
Rishi Sunak
I pay tribute to my right hon. Friend’s tireless campaigning on this issue. She is a great advocate for the cause. She will know that we have just provided over £4.5 billion of support to many small businesses up and down the country, which I know she will warmly welcome and has called for. Indeed, part of that is half a billion pounds of discretionary funding for local authorities to support local businesses, many of which may include the people she has talked about who will be eligible for that support.
Paula Barker (Liverpool, Wavertree) (Lab) [V]
For 10 months, 3 million people have been forgotten or excluded by this Government, including several of my own constituents, such as Graeme Park, and Karen and Matthew Cox. The Prime Minister said last week that these people will be listened to and that support packages are there to protect people, so can the Chancellor tell us clearly today what package of support is actually available for these groups, how much is available and when will people be able to access them?
Rishi Sunak
Rather than me recapping every single thing that we have done, let me say that it is worth bearing it in mind when the hon. Lady talks about 3 million people that for over half of those people self-employment is not the primary source of income; they are not majority self-employed. From memory, the average income from self-employment of those individuals is around £2,000. It is actually the case that many of the other things that we have done will be of more significant support to them. Indeed, the majority of them are actually employed and can benefit from our furlough scheme, so it is not right to say that they have received no support. We have put in place a range of different things, and many people are benefiting from them.
Jason McCartney (Colne Valley) (Con) [V]
The hospitality supply chain is crucial to the sector: food and drink producers, dairies, breweries, wholesalers and many more. Will the Chancellor look at extra support for hospitality supply chains, such as with VAT and business rates, so that when the vaccine allows hospitality to reopen again, there is a supply chain there to support them?
Rishi Sunak
My hon. Friend is right about the supply chain. He will know that much of the supply chain also supplies the on-premises trade as well as the off-premises, so those businesses will have some trade during this period, but he is right that we must ensure that it is there for the recovery. The supply chain will, of course, benefit from our furlough scheme, which is very comprehensive in its eligibility and very generous. I thank him for his points and will of course bear them in mind.
Madam Deputy Speaker (Dame Eleanor Laing)
Let us see if we can go a bit faster to try to get everybody in.
Hannah Bardell (Livingston) (SNP) [V]
The Young Women’s Trust found that because of covid 1.5 million women are losing income; 69% are claiming benefits to the first time; half of young mums are unable to keep or find employment because of childcare costs; and a third of women will not report sexual harassment for fear of being fired. Can the Chancellor therefore tell me how his Government can possibly continue to justify the five-week wait, have statutory sick pay at a disgracefully low £94 a week, and exclude many female business owners from help? Will he take proper action for women, who are bearing the brunt of this pandemic?
Rishi Sunak
All the support that we have put in place is blind to gender; no one is excluded on the basis of gender and I do not think it is fair to suggest otherwise. One of the reasons that I have been so keen to try to support the hospitality industry throughout this period, and to encourage people to be able to go back to it when it was open, was because of the social justice aspect. It is an industry that disproportionately employs women and other groups that we want to try to see protected. That is why it is a very important industry to me, and we must get it back to its former glory.
Marco Longhi (Dudley North) (Con) [V]
While politics is played with narratives around council tax increases, will the Chancellor confirm that the most important thing right now is support for local authorities to deliver public services in constituencies like mine? Will he please outline the steps that the Treasury is taking to deliver that support?
Rishi Sunak
My hon. Friend is right. We have provided over £3 billion of additional funding for local authorities next year to help them get through coronavirus in different ways and, within their day-to-day budgets, an additional £300 million of adult social care grant. They are seeing one of the highest core spending power increases in a decade. With regard to the political points that he knows others are trying to make, it is probably worth bearing it in mind that under the last Labour Government council tax rose on average by about 6% every year; under this Conservative Government since 2010, it has risen so far by just over 2%.
Carla Lockhart (Upper Bann) (DUP) [V]
The Chancellor of the Exchequer will share my desire to see economic recovery right across the United Kingdom. I thank him for the support provided to sustain businesses in this difficult time. However, in addition to covid-related challenges, businesses in my constituency are being hampered in trading by the chaos created by the Northern Ireland protocol. A local haulage company reports that protocol-related difficulties cost it an additional £48,000 last week. Another business in my constituency is being hit by 20% VAT on bicycle parts. Our second-hand car industry faces wipe-out because of the VAT margin scheme. The protocol spells economic harm for business and consumers in Northern Ireland. What will the Chancellor and his Government do to remove the barrier to economic recovery and free and unfettered trade within the United Kingdom?
Rishi Sunak
I am sorry to hear the various examples that the hon. Lady gave. I hope that the Trader Support Service can be of some assistance to her small and medium-sized businesses. We have funded it to the tune of about £200 million to provide support for the change of circumstances, and I know that 25,000 companies have already signed up and are benefiting from quite speedy support. I will of course keep that under review and ensure that it is doing what it needs to do.
Kate Griffiths (Burton) (Con) [V]
I thank my right hon. Friend for providing grants of up to £9,000 to businesses forced to close due to the new national restrictions. I know those businesses in retail, hospitality and, in particular, the pub industry in my constituency of Burton and Uttoxeter are grateful for that safety net. Will he continue to review the support available to them to ensure their long-term survival and growth as we come out of the pandemic?
Rishi Sunak
I can give my hon. Friend that assurance. Hospitality is such an important sector for our local communities and indeed our national economy. I cannot comment on future Budgets, but I will bear what she says in mind. She can rest assured that I will do what I can to support the hospitality industry and ensure that it can drive our recovery.
Mary Kelly Foy (City of Durham) (Lab) [V]
Last week, the Chancellor graced Members of this House with a 90-second video on Twitter announcing support for the retail, hospitality and leisure sectors. While I look forward to him delivering the Budget on TikTok, those gimmicks leave businesses in the dark through a lack of scrutiny. Now that he has been freed from Twitter’s time limits, will he tell struggling businesses in my constituency just how long they need to make those grants last?
Rishi Sunak
The grants we have put in place are one-off but can help businesses through to the spring. Additionally, they will, of course, continue to receive the monthly grants of up to £3,000, which will be paid throughout. That means that, for example, over the next three months, a business could receive up to £18,000 in cash support. We will, as the hon. Lady said, have a Budget on 3 March, before that time elapses, at which point we will set out the next stage in our economic response to coronavirus.
Conor Burns (Bournemouth West) (Con)
My right hon. Friend the Chancellor knows—not least from the conversations he had last November with businesses in my constituency—how heavily our local economy depends on the hospitality sector and how hard hit it has been. Will he give me and the sector an assurance that he will look sympathetically at its calls to extend the lower rate of VAT and the business rate holiday? What message has he got for the sector about its importance to the UK economy and to the wellbeing and quality of life of our citizens?
Rishi Sunak
I thoroughly enjoyed my conversation with my right hon. Friend’s local businesses. He mentioned exactly the right point: quality of life. This is not just about our economy and jobs; this industry is so vital for our wellbeing, and it brings spirit, life and vitality to our local communities. He can rest assured that I will want to continue supporting the industry, as I have done in the past, and I will bear what he says in mind for future Budgets.
Liz Twist (Blaydon) (Lab)
A failure to make the £20 uplift to universal credit permanent would have a disproportionate impact on families across the north-east, which has the highest rate of unemployment and the second highest rate of child poverty. Will the Chancellor now commit to make that £20 uplift permanent?
Rishi Sunak
The hon. Lady, for whom I have a lot of respect, mentioned two things: unemployment and child poverty. We know that the best way to ensure that children do not grow up in poverty is for them not to grow up in a workless household; indeed, the rate of poverty among children who are not in workless households is five times lower. Work—removing unemployment—is the best, surest and most sustainable way out of poverty, which is why this Government have backed with billions of pounds our various initiatives to support people into work, which I know she will support, whether that is the restart scheme, the kickstart scheme, doubling the amount of work coaches or increasing the incentive for people to take on new apprentices. Those are all the surest ways to help people out of poverty, and that is why we are committing billions of pounds to that end.
Madam Deputy Speaker (Dame Eleanor Laing)
We are officially out of time, but I will keep this running for a few minutes longer if Members will be decent and be quick. There are two more items of business, and it is simply not fair on other Members later in the day if this item of business takes too long.
Rishi Sunak
My right hon. Friend is absolutely right, and I have enjoyed my conversations with her on this topic. We want to make sure that people can find new opportunities, which is why we have funded companies with bonuses to take on new apprentices, as well as providing a universal entitlement to a level 3 qualification for the 37% of our adult population that sadly does not have one, and traineeships also provide young people with a start into work experience and then a job interview. Those are the kinds of thing that help people find economic opportunity, and we will make sure that women benefit equally from all of them.
Tony Lloyd (Rochdale) (Lab) [V]
Amy Pierce, the director of a small company in my constituency, was doing well until the pandemic. Since then, her turnover has dropped by 40%, but her costs have not. She has now had to lay off her staff, which is massively regrettable. What can the Chancellor say to small businesses like that to assure them that the employment base and the economic base will be there in towns such as Rochdale when the pandemic ends?
Rishi Sunak
I am incredibly sorry to hear about the example of the hon. Gentleman’s constituent, which will be mirrored by many others up and down the country. As I said in my statement, the restrictions we have had to put in place have taken a significant economic toll on the country. Hundreds of thousands of people have lost their jobs, and businesses are suffering. We have tried to protect as many as possible. It is not possible to protect all of them, but with the support that we have put in place, I am confident that we are helping many businesses, protecting many people’s incomes and saving many people’s jobs. I hope that his constituent’s business and many others can bounce back strongly once we are through this.
Chris Grayling (Epsom and Ewell) (Con) [V]
I very much welcome the Chancellor’s substantial grant support to smaller hospitality businesses in my constituency, which will at least give them a chance of seeing through this difficult period. I also represent a constituency with a large number of small travel businesses that depend on the revival of the travel industry and, in particular, the aviation sector. As he prepares for the Budget, will he look at any way he can to help that industry and that sector get back on their feet as restrictions are lifted, hopefully in the spring?
Rishi Sunak
My right hon. Friend is absolutely right to highlight the importance of the travel sector to our economy. I was pleased to work with him to help to put in place a test and release policy for international travel, which was helping, and to provide business rates support to our many airports—I know that up to £8 million per airport has been of value. I will continue to listen to him and others to see what we can do to support the economy as we recover out of this crisis.
Ellie Reeves (Lewisham West and Penge) (Lab) [V]
We are nearly a year on since the Chancellor rightly introduced the self-employed income support scheme, but despite his having had months to fix the gaps that have wrongly excluded millions, he is refusing to do so. The right hon. Member for Tatton (Esther McVey) asked the Chancellor whether the £2 billion in business rates relief that is being returned to the Treasury from supermarkets and other large shops could be used immediately to support those who have been excluded and received nothing; will he now answer that question?
Rishi Sunak
The hon. Lady’s party called specifically for that money to be used to support small businesses and high streets; indeed, not only have we just done that but we have done it to the tune of £4.5 billion, not the £2 billion that her party was calling for.
Anthony Browne (South Cambridgeshire) (Con) [V]
Green finance has a crucial role to play if we want to build back better and transition to a net zero economy by 2050. The UK has a critical role in the development of the sector internationally, not just as a global leader in finance but with this year’s presidency of COP26 and chairmanship of the G7. Will the Chancellor outline for the House what he is doing to develop the vital green finance sector?
Rishi Sunak
My hon. Friend makes an excellent point: not only are we leading in the world in reaching our net zero targets but we are a global financial centre, and we have combined the two to lead the greening of the financial system, which is an opportunity for us. We are going to issue a sovereign green bond this year and will be the first major economy to make mandatory the climate-related financial disclosures recommended by the international taskforce, which will help to cement our global leadership. I look forward to hearing from my hon. Friend the other things that we can do in this vital year for our journey to net zero.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]
A Castleford constituent—a single mum who works at a major company’s distribution warehouse—has been told that her employer will not furlough her while schools are closed and that she has to take six weeks’ unpaid leave that she cannot afford. The school has said that she cannot have a place as it is overwhelmed with key worker applications. Does the Chancellor agree that the employer’s response is completely unfair? What should my constituent do now?
Rishi Sunak
I am more than happy to receive a letter from the right hon. Lady about the particular situation that she describes, but I hope she will understand—she will know this, having been in a similar position—that it is hard for me to comment on the specific circumstances between an employee and employer. The furlough scheme can be used for the circumstances that she described. Obviously, the school will be better placed than I am to determine whether the constituent in question is a key worker, but if the right hon. Lady writes to me, I will be more than happy to follow up on her questions.
John Howell (Henley) (Con) [V]
I add my support to the cause of directors who take income as dividends. As a former inspector of taxes, I have heard what Her Majesty’s Revenue and Customs has said and do not entirely agree with it. Will my right hon. Friend agree to meet me to discuss the options available to deal with directors who take income as dividends?
Rishi Sunak
My right hon. Friend the Financial Secretary to the Treasury has met several groups and heard representations on different proposals. I am not aware of another country that has found a way to support people’s dividend income, but if my hon. Friend knows of one, I would be delighted to look into it if he sends it in.
Dame Angela Eagle (Wallasey) (Lab) [V]
Does the Chancellor believe that the £22 billion cost of Serco test and trace has been spent in a way that represents the best value for money?
Rishi Sunak
The testing capacity that we have in this country has considerably increased from where it was. The House will remember that at the start of this crisis it was 10,000, and now we are doing several hundred thousand a day, so that is a substantial increase, and testing can play a part in reducing the spread of transmission. Obviously, given the new strain of the virus, we have had to put in place new restrictions, which is disappointing, but I still believe that test and trace can play a role in suppressing the spread of the virus, especially as we come out of this crisis. The hon. Lady is right to hold me and others accountable for every pound of taxpayers’ money that we spend and I am sure will continue to do so.
Angela Richardson (Guildford) (Con) [V]
I have exciting, innovative companies of tomorrow located in Guildford, and they will be crucial to our economic recovery. Will my right hon. Friend ensure that these companies remain at the centre of his future plans?
Rishi Sunak
My hon. Friend is right: our innovative companies are a great strength of the UK economy compared with others and they will help drive our recovery. That is why we put in place the future fund, which was an unprecedented intervention to help 1,000 of our fastest-growing start-up companies with match funding. Innovate UK also made available £500 million of additional grants and loans through its innovation schemes, and most recently, we have committed extra funding for our start-up loans scheme next year. Taken together, it is a significant vote of confidence in those innovative companies, and I look forward to hearing from her other ways that we can support them to help drive our recovery.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
Last week, when I challenged the Prime Minister over the lack of support for the 3 million excluded, he claimed that they had “not been excluded”, so can the Chancellor spell out what is being done to make the PM’s word a reality, as I did not hear anything today that will give meaningful support to my constituents who have had 10 months of zero income or Government help?
Rishi Sunak
It is just not right to say that people have not been able to receive any support. Obviously, I cannot comment on the individual circumstances of every single person, but we have put in place £280 billion of direct support in a multitude of different ways, and then there is additional support that is not even fiscal—for example, mortgage holidays, which now one in six, or one in seven mortgage holders have taken advantage of. So yes, it may be the case that people have not been helped in the exact way they wanted, but with £280 billion of support in literally 20 different ways, this Government are doing what they can to provide reassurance and security to millions of people and businesses through this difficult crisis.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC) [V]
The Welsh hospitality sector employs over 8.5% of the Welsh workforce and is even more important in rural areas, such as Dwyfor Meirionnydd, where hospitality provides 27.3% of employment. Today’s statement provided no new money and no clarity for struggling hospitality businesses that need to be able to make informed decisions in the coming months. Will the Chancellor therefore confirm that there will be no further announcements of extra funding prior to the March Budget?
Rishi Sunak
The Welsh Government have received over £5 billion of up-front funding guarantees to support their local economy. I hope they will use it to do exactly that, but also, Welsh businesses will benefit from UK-wide interventions—for example, our furlough scheme, our loan programme or, indeed, some of the VAT reductions—and I have said that all our support now extends through to the spring. We will have a Budget on 3 March, where we will set out the next stage of that economic response to coronavirus.
Madam Deputy Speaker (Dame Eleanor Laing)
Between this item of business and the next statement, I will briefly suspend the House for three minutes.
Covid-19: Support for Businesses
Rishi Sunak Excerpts(3 years, 10 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Following my announcement yesterday that the Government are providing £4.6 billion of UK-wide funding to support hardest hit businesses, I am pleased to share further details regarding these grants.
Throughout this crisis, our economic priority remains the same: to protect jobs. We have already set out our economic package of support for businesses over the winter, including: monthly grants for closed businesses worth up to £3,000 per month; 100% business rates relief for all eligible retail, hospitality and leisure premises in 2020-21; extending the furlough scheme to April; extending the 100% Government-backed covid-19 lending schemes to March; and providing further self-employment income support scheme grants to support the self-employed to April.
But given further national restrictions announced by the Prime Minister on Monday that will prevent further spread of the virus, the Government will provide additional support to the most affected businesses, worth £4.6 billion across the United Kingdom.
All business premises in England which are legally required to close, including retail, hospitality and leisure, can claim a new one-off grant of up to £9,000. The one-off additional grant each business premises will receive depends on their rateable value.
Businesses with a rateable value of £51,000 or over will receive grants of £9,000.
Businesses with a rateable value between £15,000 and £51,000 will receive grants of £6,000.
Businesses with a rateable value of £15,000 or under will receive grants of £4,000.
This one-off grant is in addition to the existing monthly closed grants of up to £3,000 per month that businesses continue to be eligible for. These grants are worth over £1 billion in total per month.
We expect over 600,000 business premises in England to benefit from these grants. Businesses can receive multiple grants, as they are eligible on a per premises basis. Local authorities will receive the funding for the one-off grants next week, and we encourage them to make payments to businesses as soon as possible.
In addition to these one-off grants, we are making available discretionary funds of £500 million to local authorities in England to enable them to support their local businesses. This builds on the £1.1 billion discretionary funding (worth £20 per head of population) which local authorities in England have already received to support their local economies and help businesses impacted.
This announcement also includes £729 million of funding for the devolved Administrations as part of the unprecedented up-front funding guarantee. The total of the guarantee is reviewed regularly to ensure it reflects all additional funding and was most recently increased by £800 million to £16.8 billion on 24 December. The Government are likely to increase this shortly to take into account any further expected increases in support in England.
This support will help businesses get through this difficult period through to the spring. We will take further decisions about our economic response to coronavirus and how best to support the economy, businesses and jobs at the Budget on 3 March.
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Budget 2021: Office for Budget Responsibility Forecast
Rishi Sunak Excerpts(3 years, 11 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Today I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast for a Budget on 3 March 2021.
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Economy Update
Rishi Sunak Excerpts(3 years, 11 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Covid-19 is the biggest threat this country has faced in decades and, throughout the first and now second waves of the virus, the Government have sought to protect people’s jobs and livelihoods while also supporting businesses and public services across the UK, with over £280 billion of support spent so far. The vaccine deployment is a milestone in the recovery from the pandemic and the eventual return to normal life. While vaccination of the most vulnerable people has begun, it will take some time for the vaccine to be rolled out to the wider population. During this time, the Government remain committed to supporting people and businesses and providing them with the certainty they need.
In my previous statement to the House on 5 November 2020, I said we would review the scheme in January 2021. However, to provide certainty to businesses so that they can plan for the remainder of the winter and the new year, we have undertaken this review earlier. As the CJRS is already UK-wide, these changes will continue to apply to all devolved Administrations.
Following my last update in November, I can announce today that the coronavirus job retention scheme (CJRS) will be extended by another month, until the end of April 2021, with employees continuing to receive 80% of their current salary for hours not worked. Employers will be required to pay wages, national insurance contributions (NICS) and pensions for hours worked; and NICS and pensions only for hours not worked. The eligibility criteria for the scheme will remain unchanged, as I have previously set out.
The Government-guaranteed covid-19 business loan schemes—the coronavirus business interruption loan scheme (CBILS), the coronavirus large business interruption loan scheme (CLBILS) and the bounce back loan scheme (BBLS) have been open since the spring. As of 13 December, over 1.5 million businesses have been supported with facilities worth more than £68 billion.
To support UK businesses through continuing economic disruption, the Government have decided to extend the closing date to new applications for CBILS, CLBILS and BBLS. The schemes, currently due to close on 31 January 2021, will now be open to applications until the end of March. Together, the schemes provide vital support across all sectors of the UK economy for businesses who have been impacted by coronavirus. The loans can be used to support businesses with any liquidity needs, whether covering costs, additional expenditure or investment. We are extending the schemes now, ahead of Christmas and further into the new year, to provide businesses with continued access to the support they need through any continued disruption in early 2021. The British Business Bank will provide accredited lenders with further guidance in due course.
The Government will provide a further update on covid-19 economic support at Budget, which will be held on 3 March 2021.
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Oral Answers to Questions
Rishi Sunak Excerpts(3 years, 11 months ago)
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Rachel Hopkins (Luton South) (Lab)
The Chancellor of the Exchequer (Rishi Sunak)
Before I start, I know that Members from around the House will join me in commemorating World AIDS Day and the many organisations that make this day happen. As we remember those we have lost to HIV and AIDS, we also remind ourselves of the need for further action. I am proud that this Conservative Government’s policy is to end new HIV transmission by 2030—a commitment reaffirmed today at the launch of the HIV commission.
Throughout this crisis, the Government’s economic priority has been to protect jobs, livelihoods, businesses and public services, and we have spent more than £280 billion in doing so.
Jessica Morden [V]
Given that the Chancellor has accepted that the job retention scheme and the self-employed income support scheme need to be in place until March, does he think it is right that those who have fallen through the gaps in those schemes—highlighted by the Federation of Small Businesses—will have been without support for an entire year by then? Why have Ministers not had the decency to meet groups such as ExcludedUK?
Rishi Sunak
My right hon. Friend the Financial Secretary is meeting that group and other Members, and I and other members of my team have met various representatives of the self-employed and other employed people who would like to make representations. It is fair to say that I do not agree with the idea that those people have been excluded: the Government have provided support in many different ways to many people in different circumstances. We remain committed to that support throughout this crisis.
Chris Elmore
Surely the Chancellor can understand that these people do not have any money—they have not benefited from the Government schemes that Members from all parties welcome. How can it be that the Musicians’ Union, ExcludedUK, the FSB and various other organisations and trade unions can be wrong, and that the people who have not benefited from the schemes can be wrong, and the Chancellor can be right? Why does he not accept that he has made a mistake and introduce additional funding to support those people who have been excluded from the schemes?
Rishi Sunak
I am not making the point that every single person can access every single scheme that the Government have put in place. That is not what I am saying; everyone will have different circumstances. What I am saying is that across the suite there is a range of support—a sum total of £280 billion-worth—designed to protect businesses, the employed, the self-employed and public services. Indeed, councils have been given large amounts of funding—billions of pounds—to help those in their communities who need it most, and they are well placed to make those decisions.
Paul Blomfield [V]
In the summer, one of my constituents opened a new bar in a previously thriving area, but she shut it on 23 October as we went into tier 3. She paid her workers for that week, but she could not get furlough support until 1 November because, as hers was a new business, her staff were not eligible for registration with the previous scheme. She is just one of many who the Chancellor will know have fallen through the gaps in his support schemes. Will he recognise the problem, act to close the loopholes and provide the support that is needed, particularly in the hospitality sector and its supply chain?
Rishi Sunak
The hon. Gentleman mentioned support for the hospitality sector and bars; he will of course know that support has been provided through initiatives such as the business rates holiday, which I am sure his constituent benefited from for this entire year up until the point she was struggling, as well as the cash grants for businesses earlier in the crisis, the VAT discount, eat out to help out and the further support provided to local authorities to support the supply chain. There is a significant amount of resource to help businesses like that of the hon. Gentleman’s constituent, which I know have had an extremely difficult time.
Afzal Khan [V]
I was recently contacted by David and Alice, a couple with four young children. They are both directors of Around the Box Limited, but have seen their income slashed this year as a result of the pandemic. Around the Box sells boxes of puzzles and games to encourage families to laugh and connect. I trust the Chancellor will agree that such companies, which bring joy to families in times of real hardship, should be protected. Why, therefore, have my constituents, David and Alice, along with millions of people like them, been excluded from all Government support and left to fend for themselves?
Rishi Sunak
I feel very bad for David and Alice with the difficult situation that they are facing. However, I am sure that their small business, like a million other small companies across the country, has been able to benefit, I hope, from the bounce back loan programme, one of the most successful small business loan programmes that we have seen throughout this crisis. It has provided tens of billions of pounds to a million small and medium-sized businesses—up to £50,000—to help exactly those companies to get through this difficult time.
Rachel Hopkins
While the Government have provided support for creative institutions through the culture recovery fund, they are running the risk of losing our world-renowned elite west end musicians who are excluded from financial support due to being freelancers or limited companies. We risk losing these elite skills altogether and damage to the industry would have a negative impact on the ability of young musicians from working-class towns such as Luton being able to pursue a career in music.
Considering the sector provides more than £5 billion to our economy, can the Chancellor update the House on what barriers remain to getting support to musicians?
Rishi Sunak
There is no barrier to support for anyone to access any of the various things that we have put in place. I am glad that the hon. Lady mentioned the culture recovery fund. At £1.5 billion, it is something that I do not believe any other country has done at such a scale, coupled to which is our further support for the creative arts and the film and TV production industry, which my right hon. Friend the Financial Secretary to the Treasury will be talking about later. We agree that this is an important sector and we want to ensure that it can get back to work.
Alison Thewliss (Glasgow Central) (SNP)
I would never accuse the Chancellor of misleading the House, but he certainly seems to have misled “Good Morning Britain” when he told viewers that he had spoken to, and had back and forth with, representatives of excluded groups. Those groups are clear that he has not. Will he apologise for the oversight and make amends by meeting MPs and representatives of all groups that have been denied financial support?
Rishi Sunak
I know that my right hon. Friend the Financial Secretary to the Treasury is meeting with that particular group. In that interview, I was making a general point about the fact that I and my team had met with various representatives of those who are self-employed. It is something that we did right at the beginning of this crisis as we looked to design the self-employed scheme and we have continued to do so throughout.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
We all understand that it was hard back in March to get every detail right on Government support schemes, but nine months on, why does the Chancellor still have absolutely nothing new to say to those millions of people right across our country who have been shut out from support since the beginning?
Rishi Sunak
Perhaps the hon. Lady could let me know whether she thinks that it is right to target support on those who are majority self-employed. She refers to the millions of people, but, as I have explained from this Dispatch Box, 1.5 million of the 5 million people who file self-employed tax returns are not majority self-employed; they earn the majority of their income from things such as employment, which means that they can access, for example, the furlough scheme. That was a decision that was made because we are targeting support in a certain way and we do not know what individuals are doing. By the way, the principle of our decision was supported by every organisation that I spoke to as we designed the scheme. Indeed, they were all supportive of a much higher threshold—a less generous threshold—than the one that we ultimately used, which was a majority of 50%. They were all supportive of something higher— 60%. Rest assured, Mr Speaker, that those who are in that category have median self-employment earnings of between £2,000 and £3,000; it is not the primary source of their income. At that level, all the various other things that we have done will be of some help to them.
Owen Thompson (Midlothian) (SNP)
The Chancellor of the Exchequer (Rishi Sunak)
The economic impacts of coronavirus and the substantial fiscal support provided have meant a necessary increase in our deficit and debt levels this year. That is the right thing to do to combat the pandemic, but once the economic recovery begins and uncertainty recedes, we will return our public finances to a sustainable and strong position.
Mel Stride (Central Devon) (Con) [V]
There are reports that the Treasury has created an economic impact analysis, providing significant detail on the effect of coronavirus across the various sectors of the economy. For each sector, this analysis allocates red, amber and green ratings for revenue, jobs and financial stability. Given the vote tonight, may I ask my right hon. Friend why that analysis has not been published?
Rishi Sunak
My right hon. Friend will have seen the analysis we did publish, which talked specifically about sectoral impact. In the document, there were specific links to the various places that people can find GVA and employment by sector and, indeed, the financial resilience of local businesses at some stages by sector and by region. It is that analysis, as we have said, that will determine the particular economic impact in an area. That information is all provided in the report for people to look at.
Felicity Buchan (Kensington) (Con)
Andrew Griffith (Arundel and South Downs) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
This Government’s economic priority remains the protection of jobs and people’s livelihoods. It is our relentless focus. To that end, we have committed £280 billion this year.
Andrew Griffith
I thank my right hon. Friend for his answer. Many businesses in Arundel and South Downs, such as hospitality, events, beauty and wedding venues, have been hit terribly hard by the pandemic. It is no exaggeration to say that the support he has offered so far has been an absolute lifeline. But as my constituents now find themselves in tier 2, with all the uncertainty and restrictions, will he continue to do what he can to protect the very enterprises this nation will need—
Rishi Sunak
My hon. Friend is right to champion his local businesses, something he knows well from his own experience. I can give him that reassurance. I know it has been a very difficult time for his small and medium-sized companies. They have my assurance that I will keep working hard to support them. He knows, better than most, that they will drive our recovery.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Last week, the Chancellor said that public sector workers on less than £24,000 would be guaranteed a pay rise, but then said that they would receive a fixed increase of £250. Will he correct the record to confirm he is delivering a real-terms pay cut for many teaching assistants, prison officers and police constables?
Rishi Sunak
I stand by what I said. Those earning less than £24,000 in the public sector, 2.1 million people, or 38% of all people working in the public sector, will receive a guaranteed fixed increase of at least £250.
Anneliese Dodds
Even if no deal is avoided, we appear to be headed for a thin-as-gruel deal with the EU. The Office for Budget Responsibility says that that would lead to a long-run loss of output of about 4%. That is on top of the slowest recovery from covid in the G7, as predicted by the OECD today. The Chancellor previously said that his Government’s deal would reduce costs for ordinary working families and promised its impact would be modelled. Will he provide that modelling and is he confident that it will show that positive impact?
Rishi Sunak
I would not want to pre-empt the outcome of the ongoing talks, which I can say are constructive and proceeding with full intensity. I am very hopeful that they can reach a positive conclusion. More broadly, regardless of the exact nature of our trading relationship with our European friends and allies, I remain very confident in the economic future of our country and the opportunities that will come our way.
Damien Moore (Southport) (Con)
Rishi Sunak
I am happy to provide that information. The new national infrastructure bank will invest in projects like transport, digital infrastructure and renewable energy through a series of loans, guarantees, equity and other hybrid products. The levelling-up fund will fund what I call the infrastructure of everyday life—projects up to £20 million that can be delivered quickly—make a tangible difference to our constituents and increase the pride we feel in the places we call home.
Alison Thewliss (Glasgow Central) (SNP)
Yesterday, Scotland’s First Minister announced her intention to award a £500 thank you payment to Scottish health and social care staff in recognition of all they have done throughout the pandemic. Powers over tax allowances, exemptions and national insurance are reserved to the UK Government, so will the Chancellor do the right thing and ensure that this festive gift of good will is not clawed back by Her Majesty’s Revenue and Customs?
Alex Cunningham (Stockton North) (Lab)
Rishi Sunak
I am sure that the hon. Gentleman will listen carefully to what the Prime Minister and the Health Secretary have to say immediately after these questions, and I believe there is hope for all parts of our country as we fight against this virus. With regard to this dashboard, I would refer him to the document published, which contains a sectoral dashboard and, as I said, links to further information that people can find about the regional composition of their local economies, sectoral business resilience and employment outcomes.
Elliot Colburn (Carshalton and Wallington) (Con)
Ruth Jones (Newport West) (Lab)
Rishi Sunak
The hon. Lady raises a good point. Obviously, the news about Arcadia and Debenhams will be deeply worrying for employees and their families, and the Government stand ready to support them. With regard to various things that are ongoing, there are negotiations between various parties in the companies at the moment, particularly with regard to pensions, and it would not be right for me to comment specifically on those, but she can rest assured that we keep an eye on the situation.
Munira Wilson (Twickenham) (LD)
Rishi Sunak
I know about the difficulties that the hospitality sector is experiencing at the moment. The hon. Lady will know that the various measures she spoke about—the business rates holiday and the VAT cut—last all the way through to next spring, so they will provide support during the winter, and we have in place a grants programme that provides grants to businesses in the hospitality sector, whether they are open in tier 2 or closed, with further support provided to local authorities for discretionary support, as they see fit.
Mark Fletcher (Bolsover) (Con)
Sir Edward Leigh (Gainsborough) (Con)
Rishi Sunak
That is music to my ears. My right hon. Friend is absolutely right: this is a Government who believe in a low-tax dynamic economy. He will also appreciate that, in the midst of the crisis that we are facing, it is incumbent on the Government to provide unprecedented support to preserve the economic capacity of our country. But as soon as we get through this, I, like him, look forward to returning to that dynamic free market economy that we both passionately believe in.
Andrea Leadsom (South Northamptonshire) (Con)
Spending Review 2020 and OBR Forecast
Rishi Sunak Excerpts(3 years, 12 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Mr Speaker, today’s spending review delivers on the priorities of the British people. Our health emergency is not yet over and our economic emergency has only just begun, so our immediate priority is to protect people’s lives and livelihoods. But today’s spending review also delivers stronger public services, paying for new hospitals, better schools and safer streets, and it delivers a once-in-a-generation investment in infrastructure, creating jobs, growing the economy and increasing pride in the places we call home.
Our immediate priority is to protect people’s lives and livelihoods, so let me begin by updating the House on our response to coronavirus. We are prioritising jobs, businesses and public services through the furlough scheme, support for the self-employed, loans, grants, tax cuts and deferrals, as well as extra funding for schools, councils, the NHS, charities, culture and sport. Today’s figures confirm that, taken together, we are providing £280 billion to get our country through coronavirus. Next year, to fund our programmes on testing, personal protective equipment and vaccines, we are allocating an initial £18 billion. To protect the public services most affected by coronavirus, we are also providing: £3 billion to support NHS recovery, allowing it to carry out up to a million checks, scans and operations; over £2 billion to keep our transport arteries open, subsidising our rail network; more than £3 billion to local councils; and an extra £250 million to help end rough sleeping. Although much of our coronavirus response is UK-wide, the Government are also providing £2.6 billion to support the devolved Administrations in Scotland, Wales and Northern Ireland. Taken together, next year, public services funding to tackle coronavirus will total £55 billion.
Let me turn to the Office for Budget Responsibility’s economic forecasts. I thank the new chair, Richard Hughes, and his whole team for their work. The OBR forecasts that the economy will contract this year by 11.3%, the largest fall in output for more than 300 years. As the restrictions are eased, it expects the economy to start recovering and growing by 5.5% next year, 6.6% in 2022 and then 2.3%, 1.7% and 1.8% in the following years. Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022. The economic damage is likely to be lasting. Long-term scarring means in 2025, the economy will be around 3% smaller than expected in the March Budget.
The economic impact of coronavirus and the action we have taken in response means that there has been a significant but necessary increase in our borrowing and debt. The UK is forecast to borrow a total of £394 billion this year, equivalent to 19% of GDP—the highest recorded level of borrowing in our peacetime history. Borrowing falls to £164 billion next year and to £105 billion in ’22-’23, then remains at around £100 billion, or 4% of GDP, for the remainder of the forecast. Underlying debt, after removing the temporary effect of the Bank of England’s asset purchases, is forecast to be 91.9% of GDP this year. Due to elevated borrowing levels and a forecast persistent current deficit, underlying debt is forecast to continue rising in every year, reaching 97.5% of GDP in ’25-’26.
High as these costs are, the costs of inaction would have been far higher. But this situation is clearly unsustainable over the medium term. We could only act in the way we have because we came into this crisis with strong public finances. We have a responsibility, once the economy recovers, to return to a sustainable fiscal position.
This is an economic emergency. That is why we have taken, and continue to take, extraordinary measures to protect people’s jobs and incomes. It is clear that those measures are making a difference. The OBR now states, as the Bank of England and the International Monetary Fund already have, that our economic response has protected jobs, supported incomes and helped businesses to stay afloat. It has said today that business insolvencies have fallen compared with last year, and the latest data shows the UK’s unemployment rate is lower than that of Italy, France, Spain, Canada and the United States.
We are doing more to build on our plan for jobs. I am announcing today nearly £3 billion for my right hon. Friend the Secretary of State for Work and Pensions to deliver a new three-year restart programme to help over a million people who have been unemployed for over a year to find new work. But I have always said: we cannot protect every job. Despite the extraordinary support we have provided, the OBR expects unemployment to rise to a peak, in the second quarter of next year, of 7.5%— 2.6 million people. Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024.
Today’s statistics remind us of something else. Coronavirus has deepened the disparity between public and private sector wages. In the six months to September, private sector wages fell by nearly 1% compared with last year. Over the same period, public sector wages rose by nearly 4%. Unlike workers in the private sector, who have lost jobs, been furloughed, and seen wages cut and hours reduced, the public sector has not. In such a difficult context for the private sector, especially for those people working in sectors such as retail, hospitality and leisure, I cannot justify a significant across-the-board pay increase for all public sector workers.
Instead, we are targeting our resources at those who need it most. To protect public sector jobs at this time of crisis, and to ensure fairness between the public and private sectors, I am taking three steps today. First, taking account of the pay review bodies’ advice, we will provide a pay rise to over a million nurses, doctors and others working in the NHS. Secondly, to protect jobs, pay rises in the rest of the public sector will be paused next year. But, thirdly, we will protect those on lower incomes; the 2.1 million public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least £250. What this means is that while the Government are making the difficult decision to control public sector pay, the majority of public sector workers will see their pay increase next year.
And we want to do more for the lowest paid. We are accepting in full the recommendations of the Low Pay Commission to increase the national living wage by 2.2% to £8.91 an hour; to extend this rate to those aged 23 and over; and to increase the national minimum wage rates as well. Taken together, these minimum wage increases will likely benefit around 2 million people. A full-time worker on the national living wage will see their annual earnings increase by £345 next year—compared with the position in 2016, when the policy was first introduced, that is a pay rise of over £4,000.
These are difficult and uncertain economic times, so it is right that our immediate priority is to protect people’s health and their jobs, but we need to look beyond. Today’s spending review delivers stronger public services—our second priority. Before I turn to the details, let me thank the whole Treasury team, and especially my right hon. the Chief Secretary, for their dedication and hard work in preparing today’s spending review. Next year, total departmental spending will be £540 billion. Over this year and next, day-to-day departmental spending will rise, in real terms, by 3.8%—that is the fastest growth rate in 15 years. In cash terms, day-to-day departmental budgets will increase next year by £14.8 billion.
And this is a spending review for the whole United Kingdom. Through the Barnett formula, today’s decisions increase Scottish Government funding by £2.4 billion, Welsh Government funding by £1.3 billion and Northern Ireland Executive funding by £0.9 billion. The whole of the United Kingdom will benefit from the UK shared prosperity fund, and over time we will ramp up funding so that total domestic UK-wide funding will at least match EU receipts, on average, reaching around £1.5 billion a year. To help local areas prepare for the introduction of the UKSPF, next year we will provide funding for communities to pilot programmes and new approaches. And we will accelerate four city and growth deals in Scotland, helping Tay Cities, Borderlands, Moray and the Scottish islands create jobs and prosperity in their areas.
Our public spending plans deliver on the priorities of the British people. Today’s spending review honours our historic, multi-year commitment to the NHS. Next year, the core health budget will grow by £6.6 billion, allowing us to deliver 50,000 more nurses and 50 million more general practice appointments. We are increasing capital investment by £2.3 billion: to invest in new technologies; to improve the patient and staff experience; to replace ageing diagnostic machines such as MRI and CT scanners; and to fund the biggest hospital building programme in a generation, building 40 new hospitals and upgrading 70 more. We are investing in social care, too. Today’s settlement allows local authorities to increase their core spending power by 4.5%. Local authorities will have extra flexibility on council tax and the adult social care precept, which, together with £300 million of new grant funding, gives them access to an extra £1 billion to fund social care—and this is on top of the extra £1 billion social care grant we provided this year, which I can confirm will be maintained.
To provide a better education for our children, we are also getting on with our three-year investment plan for schools. We will increase the schools budget next year by £2.2 billion, so we are well on the way to delivering our commitment of an extra £7.1 billion by 2022-23.
Every pupil in the country will see a year-on-year funding increase of at least 2%, and we are funding the Prime Minister’s commitment to rebuild 500 schools over the next decade. We are also committed to boosting skills, with £291 million to pay for more young people to go into further education, £1.5 billion to rebuild colleges, £375 million to deliver the Prime Minister’s lifetime skills guarantee and extend traineeships, sector-based work academies and the National Careers Service, as well as improving the way the apprenticeships system works for businesses.
We are also making our streets safer. Next year, funding for the criminal justice system will increase by over £1 billion. We are providing more than £400 million to recruit 6,000 new police officers—well on track to recruit 20,000—and £4 billion over four years to provide 18,000 new prison places. New hospitals, better schools, safer streets—the British people’s priorities are this Government’s priorities.
Today’s spending review strengthens the United Kingdom’s place in the world. This country has always been and will always be open and outward-looking, leading in solving the world’s toughest problems. But during a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people, especially when we are seeing the highest peacetime levels of borrowing on record. I have listened with great respect to those who have argued passionately to retain this target, but at a time of unprecedented crisis, Government must make tough choices. I want to reassure the House that we will continue to protect the world’s poorest, spending the equivalent of 0.5% of our national income on overseas aid in 2021, allocating £10 billion at this spending review. Our intention is to return to 0.7% when the fiscal situation allows. Based on the latest OECD data, the UK would remain the second highest aid donor in the G7—higher than France, Italy, Japan, Canada and the United States. And 0.5% is also considerably more than the 29 countries on the OECD’s Development Assistance Committee, which average just 0.38%.
Overseas aid is, of course, only one of the ways we play our role in the world. The Prime Minister has announced over £24 billion of investment in defence over the next four years—the biggest sustained increase in 30 years—allowing us to provide security not just for our country, but around the world. We are investing more in our extensive diplomatic network, already one of the largest in the world, and providing more funding for new trade deals. We should, however, judge our standing in the world not just by the money we spend, but by the causes we advance and the values we defend.
If this spending review’s first priority was getting the country through coronavirus and its second was stronger public services, then our final priority is to deliver our record investment plans in infrastructure. Capital spending next year will total £100 billion— £27 billion more in real terms than last year. Our plans deliver the highest sustained level of public investment in more than 40 years —once-in-a-generation plans to deliver once-in-a-generation returns for our country.
To build housing, we are introducing a £7.1 billion national home building fund, on top of our £12.2 billion affordable homes programme. We will deliver faster broadband for over 5 million premises across the UK, better mobile connectivity with 4G coverage across 95% of the country by 2025, the biggest ever investment in new roads, upgraded railways, new cycle lanes and over 800 zero-emission buses. Our capital plans will invest in the greener future we promised, delivering the Prime Minister’s 10-point plan for climate change. We are making this country a scientific superpower, with almost £15 billion of funding for research and development, and we are publishing today a comprehensive new national infrastructure strategy. To help finance our plans, I can also announce that we will establish a new UK infrastructure bank. Headquartered in the north of England, the bank will work with the private sector to finance major new investment projects across the United Kingdom, starting this spring.
I have one further announcement to make. For many people, the most powerful barometer of economic success is the change they see and the pride they feel in the places we call home. People want to be able to look around their towns and villages, and say, “Yes, our community—this place—is better off than it was five years ago.” For too long our funding approach has been complex and ineffective, and I want to change that. Today I am announcing a new levelling-up fund worth £4 billion. Any local area will be able to bid directly to fund local projects.
The fund will be managed jointly between the Treasury, the Department for Transport and the Ministry for Housing, Communities and Local Government, taking a new, holistic, place-based approach to the needs of local areas. Projects must have real impact, they must be delivered within this Parliament and they must command local support, including from their Member of Parliament. This is about funding the infrastructure of everyday life: a new bypass; upgraded railway stations; less traffic; more libraries, museums and galleries; better high streets and town centres. This Government are funding the things that people want and places need.
Today I have announced huge investment in jobs, public services and infrastructure, yet I cannot deny that numbers alone can ring hollow. They stand testament to our commitment to create a better nation, but on their own they are not enough to create one. When asked what our vision for the future of this country is, we cannot point to a shopping list of announcements and feel that the job is done. So as we invest billions in research and development, we are also introducing a new immigration system, ensuring that the best and brightest from around the world come here to learn, innovate and create. As we invest billions in the building of new homes, we are also simplifying our planning system to ensure that beautiful homes are built where they are needed most. As we invest billions in the security of this country, we are also defending free speech and democratic rule, proving that our values are more than just words. And as we invest billions in public services, we are also protecting the wages of those on the lowest incomes and supporting jobs, because good work remains the most rewarding and sustainable path to prosperity.
The spending review announced today sets us on a path to deal with the material matters of Government and it is a clear statement of our priorities, but encouraging the individual and community brilliance on which a thriving society depends remains, as ever, a work unfinished. We in government can set the direction. Better schools, more homes, stronger defence, safer streets, green energy, technological development, improved rail and enhanced roads: all investments that will create jobs and give every person in this country the chance to meet their potential. But it is the individual, the family and the community that must become stronger, healthier and happier as a result. This is the true measure of our success. The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes. These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by Government. These things must come from each of us, and be shared freely, because the future—this better country—is a common endeavour.
Today, Government have funded the priorities of the British people, and now the job of delivering them begins. Mr Speaker, I commend this statement to the House.
Mr Speaker
This is an important statement, which is why it has run much longer than usual, but that was agreed with the Chancellor. Obviously, I have divided up the time to give an increase to the other parties as well. I call the shadow Chancellor of the Exchequer.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Thank you, Mr Speaker. This spending review was a moment for the Chancellor to take the responsible choices that our country needs. It was an opportunity to protect key workers, secure the economy and recover jobs in every part of our country.
During this crisis, we have seen who has taken responsibility: community health workers working round the clock to keep us all safe; the teachers who kept working so that key workers could too; the delivery drivers and shop staff who made sure that we had critical food supplies. Earlier this year, the Chancellor stood on his doorstep and clapped for key workers. Today, his Government institute a pay freeze for many of them. This takes a sledgehammer to consumer confidence. Firefighters, police officers and teachers will know that their spending power is going down, so they will spend less in our small businesses and on our high streets; they will spend less in our private sector. Many key workers, who willingly took on so much responsibility during this crisis, are now being forced to tighten their belts now; not in the medium term to which the Chancellor refers, but now.
In contrast, there has been a bonanza for those who have won contracts from this Government. Companies with political connections have been 10 times more likely to win Government contracts. So many businesses have worked tirelessly through the pandemic to support local communities, to keep critical supplies going and to produce drugs and vaccines—at cost price in AstraZeneca’s case—working with some of our country’s best scientists. But in their response to this pandemic, the Conservative Government have wasted and mismanaged public finances on an industrial scale: £130 million to a Conservative donor for testing kits that were unsafe; £150 million for face masks and £700 million on coveralls that could not be used; a £12 billion hit to our economy because the more effective, shorter, circuit breaker was blocked and a lengthier, more expensive lockdown put in place instead; £12 billion so far spent on a test and trace system that is still not working; and, today, news of £10 billion in additional costs for personal protective equipment, which was at least partly down to the Conservatives’ lack of pre-pandemic planning.
This waste and mismanagement is part of a longer-term pattern, showing that claims today around levelling up simply do not match the evidence: hospitals in Liverpool and Sandwell left unbuilt, over deadline by years and over budget by hundreds of millions of pounds; not a single starter home built, despite almost £200 million being spent; Northern Powerhouse Rail still not even approved six years after being announced; the courts modernisation programme three years behind schedule, letting victims down up and down the country; and people in the north more likely to have been made redundant during this crisis holding everything else equal.
Photo calls are not enough. We need delivery like the promotion of green manufacturing in the west midlands by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) and the work of Labour Mayors and councils across the country. We need a Government in Westminster who take their responsibility towards all four nations seriously. That means informing the Finance Minister of Northern Ireland about the shorter timescale for this spending review ahead of time and fulfilling the “New Decade, New Approach” commitments. It means doing the right thing by the people of Wales to repair flood damage and make safe legacy coal tips. It means ending the barney between Westminster and Holyrood and instead working together in partnership to protect jobs and livelihoods.
It means a shared prosperity fund that is effective because it is delivered not on the whim of Conservative Ministers but from our devolved Governments and our regions. The levelling-up fund that the Chancellor just announced—his rabbit out of the hat—yet again, just as with the Beeching reopening programme, involves MPs going to Ministers and begging for support for their areas, rather than that change being driven from local communities. So much for taking back control! This is about the centre handing over support in a very top-down manner.
Labour has been clear about the responsible choices that we wanted the Chancellor to make today to recover jobs, retrain workers and rebuild businesses. To recover jobs, Labour called for £30 billion of capital spending accelerated over the next 18 months, focused on green initiatives, supporting 400,000 jobs and bringing us in line with countries such as France and Germany. This Government’s ambition is for half that number of new jobs. To retrain workers, we needed an emergency programme to support people back into work, but kick- start has been slow to get started, and the skills offer for those over 25 will not start until April. The Chancellor said at the beginning of his speech that our economic emergency “has only just begun”—try telling that to people who have been out of work since March.
Restart, announced today, must meet three key tests to be effective. It should help people who need it most, not cherry-pick. It should be up and running as soon as possible, yet it appears that only a fraction of Restart funding will be available next year. And it must involve local actors who know their communities, not be imposed from Whitehall. Of course, job search support ultimately only works if sufficient new jobs actually exist. That is why we needed ambitious action to boost our economy and to support our businesses.
To rebuild business, we called for a national investment bank. I welcome the announcement of a new UK infrastructure bank, given that valuable years have been lost since the Green Investment Bank was sold off. Now the Chancellor must boost its firepower, and he must deliver on his Department’s responsibility for the drive to net zero. We have known since the Stern report that the climate crisis is the biggest long-term threat to our economy, yet far too often, this spending review locks us into a path that will make the transition to net zero harder, not easier, locking our economy out of the green jobs of the future.
To rebuild business, the Chancellor also needs to listen to business. We are less than a week from the end of the lockdown, yet we have heard nothing about whether extra support will be provided through the additional restrictions support grant for areas subject once again to tough restrictions. The Chancellor is still threatening employers with an increased contribution to furlough in January, at the worst possible time for increasing and building confidence.
In fewer than 40 days, we are due to leave the transition period, yet the Chancellor did not even mention that in his speech. There is still no trade deal, so does the Chancellor truly believe that his Government are prepared and that he has done enough to help those businesses that will be heavily affected? Will he take responsible action to help those excluded from Government support? Why is he still refusing to make the speedy fixes to universal credit that Labour has advocated, which would aid the self-employed, and why will he not provide families with certainty by ensuring that the increase in universal credit continues beyond April?
The IMF has made it clear time and again that now would be the worst time to slam on the brakes and put the car into reverse. It has called for a “meaningful additional push” from our Government to maintain fiscal support until the recovery is on a sound footing. The UK’s GDP is 10% smaller now than it was at the end of last year. We have seen the worst downturn in the G7. We needed ambitious action today to stimulate growth and maintain demand, and we needed the Government to take responsibility for the real reasons why people and communities up and down our country are being held back.
Over the past 10 years, child poverty has risen by 600,000. We have had the worst decade for pay growth in eight generations. The cost of childcare has risen twice as fast as wages. The number of young apprentices has plummeted. Last quarter, we saw the highest level of redundancies on record. Social care is in increasing crisis and, despite the Conservative party’s manifesto having promised a long-term solution, we are still waiting.
It was trailed in the press that the Chancellor would be moving 20,000 jobs out of London, yet cuts to local authorities over the past 10 years have seen 240,000 jobs lost—12 times that figure of 20,000—with the hardest-hit communities often those in the north, midlands and south-west. Today, the Chancellor could have matched his Government’s promise to do whatever is necessary to support local authorities through this crisis; he did not. And yet again he showed his Government’s lack of confidence in their own measures by failing to provide an equality impact assessment.
The measure of this Government will not be the number of press releases issued during this crisis or the number of pictures it published on Instagram; it will be the responsible action that they took, or did not take, for the sake of our country.
Next year, the eyes of the world will be on the UK as we assume the presidencies of the G7 and the UN Security Council and host the COP26 summit, yet now is the time that the Chancellor has turned his back on the world’s poorest by cutting international aid. It is in Britain’s national interest to lay the foundations for economic growth around the world—no wonder many British businesses have condemned his move.
Businesses have been more and more vocal about the problems with this Government’s last-minute approach, always one step behind when we need to plan responsibly for the future. We must learn the lessons from previous failures and ensure that the next challenge—the roll-out of the vaccine—is dealt with as efficiently, effectively and speedily as possible.
Next time, we need a comprehensive spending review that takes responsible choices—to build a future for our country as the best place in the world to grow up in and the best place to grow old in. People should have opportunities on their doorstep, not at the other end of the country. Everywhere in the UK should feel like a good place to set up home. That is what the Chancellor must deliver.
Rishi Sunak
I will address all the points made by the hon. Lady in turn, but it is important to note, up front, that despite her criticisms, there is actually a lot that she and her Opposition colleagues should welcome: more funding for public services; a pay increase for NHS workers; support for those on the lowest incomes; a once-in-a-generation investment in infrastructure; a multi-billion pound commitment to support those looking for work; a new schools building programme; and the Prime Minister’s 10- point plan. I could go on, Mr Speaker.
It is right that the hon. Lady should provide challenge, but I think, even if she does not, that the British people will judge this spending review as a reflection of their priorities: protecting jobs, defeating coronavirus, strengthening our public services and upgrading our infrastructure. If there is any politics here at all, surely it is unifying, and I think that, deep down, she will recognise that.
Let me address the specific points. The hon. Lady asked about pay and the importance of consumption, and I agree that of course there is an impact on consumption from pay. She will know that the marginal propensity to consume is obviously greater the lower down the income spectrum you go, which is why, in particular, we have protected the incomes of those on lower incomes.
Anyone in the public sector earning less than the UK median salary of £24,000 will receive a pay rise of £250 or more. Taken together with all the other things we have done, including giving a pay rise for those who work in the NHS, this will mean that the majority of public sector workers will see an increase in their pay next year. Also, pay progression and promotions—all of that—will carry on. We have increased wages for those on the national living wage: an extra £345 a year, as the wage rate goes up to £8.91. That, again, will help to drive consumption.
The hon. Lady rightly talked about delivery. We believe very firmly in making sure we can deliver the change we promised the British people. The Chief Secretary to the Treasury, my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay) and I chair something called project speed, which is already delivering benefits, with plans for the landmark A66 upgrade shortened in time and reduced in cost, so we can get on with delivering what the people want on time and on budget, making a difference in their communities.
The hon. Lady asked about the levelling up fund and, I thought rather bizarrely, seemed to suggest that local Members of Parliament were not a good reflection on their local communities and able to articulate the local needs of their communities. I say to colleagues on the Opposition Benches that I am more than happy to hear from them and their local areas about the needs that they want met, because this Government will meet the needs of local communities up and down the country.
The hon. Lady talked about support for businesses during coronavirus. We have already put in place support through this winter period. The local restrictions grants we announced a while ago are paid monthly and they work. If your business has been closed, you will receive a grant of up to £3,000 per month depending on your rateable value. If you are a hospitality, leisure or accommodation business in a tier 2 area, where obviously the restrictions have an impact on your ability, you will receive a grant of 70% of that value up to £2,100. Those amounts mean that the business can help to cover the fixed costs of rent. They, of course, have access to the furlough scheme right the way through winter.
That comes on top of the other recent support announced for businesses. Today, I announced major reforms to the way the apprenticeship system works, giving businesses what they have long asked for: the flexibility to spend unused apprenticeship levy funds down the supply chain with small and medium-sized enterprises, and the ability to frontload payments for training. We are also looking at ways to introduce even more flexibility for some professions. We also recently announced an extension of the annual investment allowance for a further year up to £1 million, giving 98% of small and medium-sized businesses the ability to write off investments in full next year, which will help to drive their recovery.
The hon. Lady talked about welfare. Again, I stand proud of this Government’s and previous Conservative Governments’ record on this issue since 2010: hundreds of thousands fewer people in absolute poverty; several hundred thousand fewer children living in workless households; and income inequality lower coming into this crisis than when we first came into office.
This Government care greatly about those who are most vulnerable. We have demonstrated that during this crisis by the support we have put in place. The evidence shows that those on the lowest incomes have been protected the most by this Conservative Government. And that does not stop. The temporary uplift in universal credit runs all the way through to next spring, providing security for those families. Of course we will look, when we come to next spring, at the best way to support people and their families when we have a better sense of where the economy is and where we are with the virus, but we are providing extra support for next year: £670 million to help struggling families meet their council tax bills, worth about £150 each for families up and down the country. We also said we will maintain the £1 billion increase in the local housing allowance that we instituted this year into next year, providing support for many millions of families. We are also making available further funds, as the House knows, to provide extra support for food and meals for children throughout the holidays next year.
The hon. Lady talked about support for local authorities. Perhaps she has not seen it yet in the document—that is fair enough—but we announced over £3.5 billion of extra support for local authorities next year specifically to deal with coronavirus. That comes on top of their core spending power increasing at decade-level highs of 4.5%. That £3.5 billion is there to help to meet the shortfall in sales fees and charges, and the unrecoverable losses in business rates and council tax that they have experienced this year, as well as £1.5 billion for general pressures. Let no one say that we are not standing behind our local authorities at this difficult time.
Finally, the hon. Lady asked about green issues. I think she compared us with France and Germany and questioned this Government’s and the Prime Minister’s ambition. Let me say this about our plans. They are, I believe, among the most comprehensive and ambitious of any developed economy. She talked about France and Germany, but in this country we are phasing out certain vehicles in 2030; in France, it is 2040. In this country, we are phasing out coal in 2025; in Germany, it is 2038. She talked about the billions of pounds being spent by our friends, but it is important when we make these international comparisons that we understand the detail of what the other countries promise. The German numbers include the subsidies for renewables; ours do not. That happens separately outside our plan and is worth £44 billion, supporting renewable energy in this country through the tariff system, which is what Germany alluded to. The German numbers also include support for public transport, which ours of course do not, because that is something we do just in the ordinary course of business. I am proud of this Conservative Government’s record. We are the first major economy in the world to legislate for net zero, and our economy has decarbonised faster than any other in the last 20 years. This Conservative Government will deliver the Prime Minister’s plans to get us to net zero, and that is something that I hope the whole House can welcome and support.
In conclusion, this spending review puts the full force of the Government behind the priorities of the British people, and while we may have many disagreements with the Opposition, I am confident that, in private at least, they will recognise the significant investment we are making to protect jobs, strengthen our public services and improve our infrastructure. We in this House are all answerable to the people we represent, and it is in their interests that we serve. Today, we have made some difficult choices to fulfil that responsibility, but with the positive news about the development of vaccines, the winter covid plan being announced by the Prime Minister and the very real hope that we are finally entering the final stages of our fight against coronavirus, now is the time for us to come together. The British people have been through so much this year, as have right hon. and hon. Members, and it is my belief that, with this spending review and the fresh hope given by medical advances, we can finally begin our recovery. Now, difficult decisions and all, we must deliver on the priorities of the British people.
Mel Stride (Central Devon) (Con) [V]
I very much welcome many of the positive measures that my right hon. Friend has just announced. However, he has inevitably revealed some of the more difficult decisions that he has to make around a reduction in overseas development aid and the freezing of public sector pay next year—not across the board but on a selective basis—and there will be many difficult decisions of that type around spending and taxation in the future. Does he agree that, in terms of dealing with the deficit, it is not just about spending and taxation but also very much about growth? Does he also agree that we should look to private sector businesses and entrepreneurs to provide that growth? Can he set out how he is going to ensure that, as we come out on the other side of the crisis, businesses and entrepreneurs are given every possible support and freedom to power our economy forward over the years ahead?
Rishi Sunak
I completely agree with my right hon. Friend that we will build our recovery through the dynamism of the private sector, and he is right about the power of entrepreneurship. Probably the most important thing we can do in that regard is to make it as easy as possible for businesses to take on new people. He will have heard about the unemployment numbers. We want to get as many of those people back into work as quickly as possible, so we will be looking at how we can make that as easy as possible for those dynamic businesses that are growing. At a very micro level in this spending review, we have also announced more funding for our start-up loan scheme, which provides discounted Government-backed loans of up to £50,000 for budding entrepreneurs to start their new businesses at the smallest level. I hope that that is something that he will support.
Alison Thewliss (Glasgow Central) (SNP)
This spending review was an important opportunity and an important test, and instead of posing for photographs in his favourite hoodie, the Chancellor should have been listening to those who are struggling. Spending £29 million on a festival of Brexit while they let weans go hungry at home and abroad just about sums up this tawdry Government. Reneging on the 0.7% aid commitment while the world struggles with a covid pandemic is just cruel. He says he has come to talk about jobs, but how many jobs has this Chancellor cost? Last month, the Office for National Statistics reported that since March 2020 the number of payroll employees has fallen by 782,000, and how many job losses could have been avoided if the Chancellor had not wound back furlough and threatened to cut it short? With a reported £1.4 billion for Jobcentre Plus, will he restore the job centres in Scotland that were closed by his Government?
What about those who have been ignored, patched, and blanked by the Chancellor at every turn—those excluded from his support schemes altogether, many of them limited company directors, freelancers, short-term PAYE workers, new starters and those on maternity leave, who have had absolutely nothing at all from this UK Government? He knows this and it is unjustifiable. He might have had some excuse back in March and April, but we are now in November, so I ask him: what does he expect these 3 million people to live on this winter? Will he look at the proposals for the directors income support scheme and the Equity creatives support scheme? Many of those excluded are in jobs in sectors that cannot safely restart due to the public health restrictions, so he must apologise and he must take action to put it right.
The Chancellor has spoken of the importance of getting young people into jobs, but he has utterly failed to address the reality of low-paid, part-time, precarious work. The Young Women’s Trust says that a staggering 1.5 million young women have lost income since the start of the pandemic. Many of them are in sectors such as retail and hospitality that have been clobbered by covid. What he should be announcing today is a real living wage: £9.50 an hour, as set by the Living Wage Foundation, not his pretendy living wage. I am glad to see that over-23s are eligible, but he said nothing about those in the 21-to-24 bracket, who are on £8.20 an hour, the 18-to-20s, on £6.45 an hour, the under-18s, on £4.55 an hour, and apprentices, on merely £4.15 an hour. What about them? Young people do not get a discount on their rent or their bills due to their age, but this Chancellor continues to short-change them in wages. A fair wage for a day’s work is the very least young people should expect from their Government. In not acknowledging the injustice, the Chancellor fails to protect the rest of our young people.
We need fair wages, too, for public sector workers. It feels like the Government are punishing people for working in the public sector. The absolute heroes who saw us through this pandemic have more than earned their pay. A public sector pay freeze takes £4 billion out of the economy, squeezes living standards and starves the economy of investment at the very worst possible time. These are the hospital porters, the teachers, the jannies, the police officers and the firefighters: those who kept our streets clean and our public services going. All of them—all of them—deserve better than applause on the Chancellor’s doorstep in the summer and a pay freeze in the depths of winter.
Not content with short-changing young people and public sector workers, the Chancellor wants to change RPI in a move that will impact about 10 million pension incomes and cost retirees over £100 billion. SNP Members urge him to see sense and not to pick the pockets of our pensioners. He must also use this spending review to make the £20 uplift to universal credit permanent, scrap the benefit cap and extend the £20 uplift to legacy benefits and those with disabilities—who, for unfathomable reasons, he seems to have forgotten even exist—and to increase the pitiful level of statutory sick pay.
Businesses across the country have been racking up debt while their incomes have not been there. Businesses are terrified by business rates relief coming to an end next year. Will the Chancellor look at this issue so that we can also act in Scotland? Will he make the VAT cut for the hospitality sector permanent to see it through this crisis?
We still await proper details of the shared prosperity fund and what it will mean for Scotland. The Scottish Government have done their part in preparation, and the Chancellor needs to bring forward proposals as a matter of urgency so that we can spend this money properly in Scotland rather than having it hived off to Tories in key seats in England.
The spending review is only for one year, and I appreciate why that is, but this failure to plan effectively for the future is why the UK is doing worst in the G7. What are the Chancellor’s plans for next year if things do not go as he expects? There is nothing in his statement about Brexit and the cost that that will bring, when we see lorries queuing all the way through Kent. We call on him also to make a £98 billion stimulus to invest in a greener, better future for us all. None of this really has anything to do with the strength of the Union; it is merely a reflection of the powers that he has as Chancellor that the Scottish Government do not. So if he will not do these things—if he will not act—he must devolve the full financial powers and let the Scottish Government get on with the job.
Rishi Sunak
Let me run through the hon. Lady’s questions in turn. She asked about my favourite hoodie. I can tell her that it is not the one in the picture, but actually the kickstart hoodie that was given to me by the Secretary of State for Work and Pensions, which I wear with pride.
The hon. Lady asked about the self-employed and again mentioned this number of 3 million people. I would like to address this point properly. It is not a number that I recognise, and I do not think that it is right to describe those people as excluded, as 1.5 million of those people are not majority self-employed; they are people who earn the majority of their income from being employed. That decision was taken to help target the support at those who really needed it. We have heard a lot from Opposition Members about support being targeted, especially regarding the self-employment scheme. That decision was made because if someone earns the majority of their income from employment, it is reasonable to assume that they will benefit from the furlough scheme, and that is how the majority of their earnings come in. That principle was supported at the time by every trade association that I spoke to when designing the scheme. In fact, those conversations were supportive of a much higher threshold than the one that we adopted, which was just “a majority”; others said that 60% or two thirds would be reasonable.
I hope that it is also of comfort to the House to know that the median amount of self-employment income that those 1.5 million people who are not majority self-employed have in their returns is somewhere between £2,000 and £3,000, so it is not the overwhelming part of their earnings. At that level, the universal credit system and other support that we provide will be significant in making up the difference.
The hon. Lady asked about welfare and again mentioned universal credit. I guess it is worth reminding the House that the Scottish Government have plenty of powers over tax policy and welfare policy—and, indeed, have used them in the past. I hear that there is to be a Scottish budget. We look forward to seeing what the Scottish Government decide to do with the powers that they have over both tax and welfare decisions.
The hon. Lady asked about jobs and talked about the OBR. I am glad that the OBR has today joined the IMF and the Bank of England in commending the Government’s economic response and recognising and stating explicitly that the interventions that we have put in place have reduced the level of unemployment and saved people’s jobs. I think that the OBR actually quantified that in its report today, putting the number at hundreds of thousands and confirming what the IMF said—that our response has held down unemployment.
The hon. Lady asked about young people. We are determined to help young people. They have borne the brunt economically of this crisis, which is in part why we created the kickstart scheme—an ambitious programme under which, I think, 19,000 fully funded placements have now been created for those under the age of 24 who are at risk of unemployment. We also provide a cash bonus to businesses to take on new young apprentices. All those things will make a difference to our young people at what is, without question, a very difficult time.
Sir Peter Bottomley (Worthing West) (Con)
The House will be glad that the Chancellor has met the needs of the poorest, that he is going to maintain the increase to the state pension and that he is ensuring that people get opportunities to get back into work if they have been out of it. He talks about the £250 minimum for the lowest-paid people in the public sector. May I ask him whether that includes people working in local government or just national Government? That would be useful to know.
There will be a welcome for the increase in spending for schools. There are also many other things that people will think are sensible and that could—or should—have been done as the Labour Government went through the crisis in 2008, when they also implemented a public sector pay freeze. May I put it to him that it would be incredible if the Independent Parliamentary Standards Authority were to force a pay increase on Members of Parliament when others do not get it? One way or another, will the Government—and perhaps you, Mr Speaker —talk to IPSA and ensure that that does not happen? I have the view that MPs’ pay should only be adjusted after a general election; that may be a minority view, but I think it would be wrong for us to have pay forced on us when others cannot get a pay increase.
Let me turn to overseas aid. When the Departments were merged, the Foreign Secretary said that the 0.7% figure would be maintained. My right hon. Friend the Chancellor was elected in 2015, as I was, under a commitment to meet 0.7%. We were re-elected in 2017, and the only difference in 2019 was that the word “proudly” was put in front of that commitment. I am proud of that commitment. I will work with anyone across the House to make sure that a change of percentage does not happen. Obviously, with our GNP coming down by 10%, the amount that goes on aid will come down automatically. I fight to maintain the pledge that the Prime Minister, the Chancellor, the Foreign Secretary and I made at the last general election.
Mr Speaker
I do not like being brought into the situation on pay. What I would say is that there is no decision on pay; there is no award to MPs. There is a big mistake out there somehow that there is an amount that has been given. Let me reassure the Father of the House that that is not the case. It will not even be looked at til next year—probably later, towards Easter.
Rishi Sunak
I am grateful to my hon. Friend for his thoughtful and powerful contribution. I respect what he has to say on aid. He is right about the language that was used. He will know the extraordinary circumstances that this country and this Government are grappling with. In order for us to meet our many other commitments and deliver on the British people’s priorities, we have had to make difficult decisions. Of course, it is something that I regret that we have to do, but I believe it is the right decision so that we can keep delivering on the priorities of the people at what is an enormously challenging time.
I turn briefly to my hon. Friend’s other questions. On local government employees, he will know that those pay levels are not mandated by central Government, and local government will typically make its own decisions. With regard to the social care workforce, which I know he also cares about, he will know that many of those workers are on the national living wage and will benefit from the 2.2% uplift—£345—that we have accepted.
On my hon. Friend’s last point, I can tell him that the Chancellor of the Duchy of Lancaster wrote on behalf of the Government to IPSA in advance of this statement to inform it of the Government’s approach to public sector pay and to ask it to take that into consideration when it decides what it would like to do. Obviously, it is an independent body, but we have expressed our views in the light of the pay policy that we have announced today.
Christine Jardine (Edinburgh West) (LD) [V]
I listened intently to the Chancellor, but what I did not hear was enough—enough to protect jobs by extending furlough to the summer, enough for those in the public sector who have endured so much in this crisis and now will have a pay freeze, or enough for those millions of families facing enormous financial hardship because they are excluded. I point out to the Chancellor that they do exist; I can give him plenty of examples of people who phone my office every day in deep distress. Will he, for a minute, pause and put himself in the shoes of those 3 million excluded people, and then tell us why he still finds it acceptable to turn his back on them?
Rishi Sunak
I very much hope that the hon. Lady will welcome the £2.4 billion in additional funding that has been provided to the Scottish Government to use as they see fit. Of course, they can use that to support many of the causes that she articulates. In the interests of time, I will not go over the answer I gave to the hon. Member for Glasgow Central (Alison Thewliss), but we have provided comprehensive support to those who are self-employed; between 2.5 million and 3 million people have received £14 billion of support, with more to come. It remains one of the most generous ways to treat the self-employed that I have found anywhere in the world.
Gareth Johnson (Dartford) (Con)
I welcome this statement and the fact that the Chancellor recognises that debt has to be paid back. May I ask him about the changes in public sector pay? According to the ONS, private sector pay has fallen of late, whereas public sector pay has gone up by about 4%. The Chancellor’s announcement today that the 2 million lowest-paid public sector workers will receive £250 shows, does it not, that they are our priority? They are the people who need this most and they are the people we will give attention to.
Rishi Sunak
My hon. Friend is absolutely right. It would be wrong to describe a situation in which a majority of those working in the public sector next year will see an increase in their pay as a blanket pay freeze. We have done exactly as he suggests: we have targeted our resources on those who need them most, meaning that over 2.1 million people who earn less than £24,000 in the public sector, who comprise 38% of all those in the public sector, will see that increase of £250 or more in their pay packets.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
We welcome the additional £900 million for the Northern Ireland Executive—yet again, a benefit of Northern Ireland being part of this United Kingdom. I think we all believe that nurses, doctors and healthcare workers should receive a decent pay rise, but will the Chancellor acknowledge that there are other public sector workers who have been on the frontline on covid, such as our armed forces and our police officers, and look again at including them in the public sector pay rise? Of course, I agree with the Father of the House that that should not include Members of Parliament.
Rishi Sunak
I am grateful to the right hon. Gentleman for welcoming the £900 million in Barnett funding for Northern Ireland. He will be pleased to know that we have had productive conversations about fixing some technical baseline issues for the budgeting as well, which I know will be welcomed by the Executive.
With regard to pay, we are protecting those who earn less than the UK median salary. Whichever part of the public sector they work in, if someone earns less than £24,000, they will receive the £250. It is the right approach to provide that support to those with lower-than-average earnings.
Mr David Davis (Haltemprice and Howden) (Con)
I lend my support to everything said by the Father of the House. Covid-19 means that the Chancellor’s strategy is broken into three phases: first, as we are doing now, spending everything necessary to stop the economy collapsing, which he is doing successfully; secondly, essentially from next spring, doing everything possible to maximise growth and recovery in the economy; and thirdly, after that, when things get on to an even keel, returning to conventional economics. Does he agree that the enormous deficit inevitably created in the first and second phases of the strategy needs to be financed in a similar way to major incidents such as wars, with very long-term bonds, not destructive short-term taxes?
Rishi Sunak
I am grateful to my right hon. Friend for his comments. I would distinguish between two things. The borrowing that we are carrying out this year, which is, as he knows, at a peacetime high, is financed through the gilt markets. He will be pleased to know that we push as much as we can to the long end of the curve relative to our international peers; the average maturity of our debt stock is about 14 or 15 years, which is almost double the average of the G7. He is right that we should do that. I would differentiate that from an ongoing structural deficit, which is with us for many years. As he said, our first priority coming out of this will be to get growth going again.
Ben Lake (Ceredigion) (PC)
On average, Wales received £400 million a year from EU structural and investment funds, sadly well above the UK per capita average due to our greater relative need. Promises have been made that Wales will receive not a penny less from the UK shared prosperity fund. The Chancellor has stated that he will match total UK funding, but will he also confirm that Wales’ share will not be diminished, that it will represent additional investment, and that the fund will be allocated according to need?
Rishi Sunak
We have said that as the EU funding that we are currently financing runs off, we will step in and replace it up to the tune of about £1.5 billion, which is the UK amount. Obviously there are conversations to be had about how best to allocate that, what kinds of projects, and how it should be done. Some initial thoughts on that are published today, alongside more than £200 million of funding to start piloting the approach and working with communities to see what works best. I know that people in Wales will welcome that and I look forward to seeing the proposals that they come up with.
Derek Thomas (St Ives) (Con)
The Chancellor is quite right that people want to look back and see that their community is better off than before. To pick up on the point about the shared prosperity fund, Cornwall also received European funding and has been promised the shared prosperity fund, but it is often difficult in areas where the population is not so large to demonstrate value for money to the Treasury, and as a result we miss out. As he sets out more on the levelling-up fund and the shared prosperity fund, wages in Cornwall remain stubbornly low. Can he reassure me that those funds will address low wages, provide good jobs, improve skills, and provide the pathway to the skills and opportunities that people in Cornwall need?
Rishi Sunak
I commend my hon. Friend, because he consistently comes to the House to champion his constituents and talk about increasing the opportunities available to them. He is right that we want to make sure that we target our resources at the places where they can make the most difference. I look forward to hearing from him what projects he thinks will be able to transform the lives of his constituents and the communities that they are proud to call home.
Caroline Lucas (Brighton, Pavilion) (Green) [V]
The Chancellor speaks of a fiscal emergency, but said not a word today about the climate and nature emergencies. There is a real risk that any green steps will be fatally undermined by the reckless pursuit of business-as-usual, environmentally destructive spending, such as the £27 billion road-building programme. He has said that there can be no lasting prosperity for people if we do not protect the planet, so will he adopt a new economic rule—a net zero test—and assess all spending and fiscal measures against the UK’s climate and nature goals, so that the whole package is properly green?
Rishi Sunak
The Government firmly believe in making sure that the recovery is green. I urge the hon. Lady to have a look at the national infrastructure strategy that we have published today, entitled, “Fairer, faster, greener”, which outlines the funding for all the green measures contained in the Prime Minister’s 10-point plan. I think it represents a comprehensive and ambitious path to deliver our net zero commitments.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I thank my right hon. Friend for his courtesy over the weekend and I assure him of my very strong support for virtually all of his package today. As a result of the pandemic here in the UK, 50,000 people have died and we are rightly moving heaven and earth to prevent more deaths here at home. Is he aware that his proposed breaking of the 0.7% promise and the 30% further reduction in cash will be the cause of 100,000 preventable deaths, mainly among children? This is a choice that I for one am not prepared to make. None of us in this House will be able to look our children in the eye and claim that we did not know what we were voting for.
Rishi Sunak
I am enormously grateful to my right hon. Friend for the conversations I have been able to have with him, and I fully respect his passion on this subject. He brings an enormous amount of experience to this House on this topic, and obviously he will have heard the reasons that I set out for doing what we are doing. I believe we can still make a difference to the world’s poorest countries with the measures that we have put in place. The most pressing issue that the developing world faces at the moment is the ability to deliver and deploy a coronavirus vaccine. He will know that we are the largest donor globally to the COVAX advance market commitment, the global initiative that is supporting developing countries’ access to vaccines. Right now, that is probably the most important thing we could be doing. We are doing it. We are leading the world in helping tackle coronavirus. I know that my right hon. Friend and I will carry on this conversation.
Stephen Farry (North Down) (Alliance) [V]
The covid pandemic has exposed structural weaknesses in our economy and society, but it is also likely to accelerate change in how people work, live and interact. May I also point out to the Chancellor that the excluded are a genuine problem? One of the difficulties is that the Government are not counting those who are sole directors of limited companies as part of the self-employed, which is how the figures are coming across as confusing. Does the Chancellor accept that public spending should not necessarily assume a restoration of the status quo ante but must be based on a transformation of our society and economy around social justice, inclusion, reskilling and investment in a green new deal?
Rishi Sunak
We want our recovery to be green and the national infrastructure strategy sets out an ambitious way to do that. Skills are at the heart of what we believe, giving people the tools they need to improve their lives and go on to better things. We are funding £375 million today to deliver our commitments on the Prime Minister’s lifetime skills guarantee and other matters. The hon. Gentleman can rest assured that that remains an area of enormous focus for this Government.
Dr Luke Evans (Bosworth) (Con) [V]
In the light of the difficulties the country faces with its finances, I was pleased to see the commitment to infrastructure. Is the Chancellor aware of Hinckley bridge on the A5, which has been awarded the status of “most bashed” bridge in Britain? It has been hit 25 times and causes a delay of six hours every time. It is a prime example of the pinch points littered up and down the A5, which strangle productivity. Will he commit to provide funds to the likes of the A5 to bring prosperity to the midlands and grow our economy out of the covid situation?
Rishi Sunak
My hon. Friend articulates well an example of local pinch points being a blight on communities, stopping people improving the quality of their life and driving growth. It seems like a very good example of the type of project that our new levelling-up fund would be interested in, and I look forward to discussing it with him further.
Jeremy Corbyn (Islington North) (Ind) [V]
Throughout the corona crisis, public sector workers in all areas have delivered brilliantly and helped to save lives and look after all our communities. Civil servants have lost 19% in wages over the past 10 years due to austerity, and there is a 12% gender pay gap that affects civil servants. So will the Chancellor recognise the importance of their work and their participation and give an increase of 10% to begin to make up the ground that they have lost over the past 10 years? Instead of saying to them that, as thanks for all their work, they will get a maximum of £5 a week for the lowest paid, will he return to proper national pay bargaining for all civil servants, so that those people who deliver for us are seen to be treated properly and fairly as we come out of the corona crisis?
Rishi Sunak
I am glad the right hon. Gentleman gives me an opportunity to thank my fantastic team of civil servants in the Treasury, who have been extraordinary in their hard work and creativity throughout this crisis, and have remained so over the past few weeks in concluding the spending review. I put on record my thanks to them.
Unsurprisingly, my numbers are slightly different to those of the right hon. Gentleman. According to the ONS, before this crisis even started in 2019, there existed at least a 7% pay premium between the public and private sectors after accounting for characteristics and pensions. That gap no doubt has been exacerbated and widened over the past six to 12 months as a result of widening pay inequality between public and private sector pay. That is why I believe it is fair to take the approach we have, but I share with him a desire to protect those on lower incomes, which is why those 2.1 million people who earn less than £24,000 will receive a pay rise of £250.
Mr Tobias Ellwood (Bournemouth East) (Con)
I commend the Chancellor for having to make some very difficult decisions, but as President-elect Biden commits to a new era of western leadership, here we are about to mark the start of our G7 presidency by cutting our overseas aid budget. Downgrading our soft power programmes will leave vacuums in some of the poorest parts of the world that will further poverty and instability. It is likely to see China and Russia extending their authoritarian influence by taking our place. Will my right hon. Friend concede that we cannot genuinely claim to be global Britain, or claim to be serious about creating post-conflict strategies for countries such as Libya and Yemen—strategies that could lead to greater UK prosperity —when our hard power is not matched by our soft power? Will he meet me to discuss how these dated rules governing overseas aid should be updated?
Rishi Sunak
My right hon. Friend will I am sure welcome the very significant increase in our defence budget, which he has campaigned for to fix many of the issues of the past. He also alluded to our ability to help lots of different parts of the world in lots of different ways; Libya was one example that he gave. He will know that we are the fifth largest contributor to the UN’s peacekeeping operations. He makes a good point about aid rules. For example, we spend about half a billion pounds every year on peacekeeping and security operations in countries such as Libya, Mali, Somalia, Sudan and the Democratic Republic of Congo. That spending, that difference we make on the ground and that security that we bring to some of the world’s poorest places is not currently counted as overseas development aid.
Catherine West (Hornsey and Wood Green) (Lab)
The Chancellor has spoken well today of the scars that are felt by so many in society due to the triple whammy of covid, climate change and Brexit. Will he outline how he will manage to ring-fence money for mental health within the health spend? Mind, the charity, has said that phone calls have doubled, with many young people experiencing debilitating anxiety, depression and self-harm. Will he urgently look at mental health and ring-fence money for workforce changes, which are desperately needed, and for a decent revenue spend to bring mental health up into line with physical health?
Rishi Sunak
The hon. Lady makes a good point, and I am pleased to tell her that of the £3 billion of extra money for the NHS that we have announced for next year to help recover from coronavirus, half a billion pounds of that is specifically earmarked to address waiting times in mental health services, to give people the support they need and to invest in the workforce that she rightly identified. I hope that gives her some reassurance. That is incremental to the existing NHS plans.
Mrs Pauline Latham (Mid Derbyshire) (Con) [V]
I congratulate the Chancellor on how he has handled the financial pressures that the pandemic has thrown at the Government, by thinking outside the box with brilliant, innovative solutions. However, I cannot support the new tiering system, because it is totally illogical and will force too many people to stay holed up at home. Hospitality businesses will fold in their tens of thousands, and I cannot condone that when they have spent tens of thousands becoming covid-safe.
I will also not support the reduction in the aid budget. This country has made an amazing difference to the lives of millions, but with the reduction of GNI and the proposed cut, the aid budget will be decimated. No longer will girls have 12 years of quality education—resulting in more child marriages, more instances of early childbirth, more female genital mutilation and more domestic violence. We will not be vaccinating millions, preventing polio and TB, providing medication for HIV or preventing malaria. We will be reduced to spending on humanitarian crises in emergencies only—
Mrs Latham
So many things will be damaged, and our relations with the developing world will lose the soft influence that we have today. I cannot condone this, and therefore I will not be supporting this statement.
Rishi Sunak
My hon. Friend makes a passionate case, and a right case, for our ability to help provide immunisation to the world’s poorest children. It is something that I proudly support, and I am happy to tell the House that we are the largest donor to the Gavi consortium globally, of any country in the world. That is the multilateral body that provides immunisation against infectious diseases for 75 million children, and as I have said, we are proudly the largest donor to that effort.
Mr Deputy Speaker
I just remind Members that we must not have a speech and eventually a question. Can we get quickly to the questions in order that we can get everybody in?
Ms Angela Eagle (Wallasey) (Lab)
In this covid crisis, the Government have presided over an horrific double whammy of one of the largest per capita death rates in the world and the deepest recession in the G7, and that is before the Brexit disruption due at the end of the year. Is the Chancellor really proud of his record?
Rishi Sunak
My priority throughout this crisis has been protecting jobs. I am pleased to see that that is something the OBR, the Bank of England and the IMF all acknowledge has happened as a result of our interventions. We currently have an unemployment rate that is lower than Italy, France, Spain, Canada and the United States. So, yes, I do think what we are doing is making a difference to millions of people up and down the country.
Huw Merriman (Bexhill and Battle) (Con)
Can I commend all the work that the Chancellor has done this year? Many constituents I speak to credit him personally with keeping them in a job. I am also pleased to see that, despite the financial pressures, the Chancellor is investing in transport. We see multi-year settlements for road, rail and active travel, and changes to the way infrastructure projects are appraised to increase the number of transport projects in deprived parts of the country, as well as a green book, a national infrastructure strategy, a red book and a £4 billion levelling up fund—and I am pleased to see that the Department for Transport is a sponsor. Can I ask him to keep a watchful eye on how all that is spent? Will he continue to place transport investment at the heart of our recovery and his long-term vision for this country?
Rishi Sunak
I am very grateful for my hon. Friend’s intervention. He is absolutely right, and he has championed tirelessly for his constituents and the country the importance of transport in our levelling-up agenda and in helping to drive growth and spread opportunity. He is also right that we should be careful about how this money is spent and make sure that it is delivered. I talked about Project Speed earlier, and I would welcome his involvement and advice on that. He will notice in the spending review document a new focus on outcomes across public services with a new public value framework. That will deliver what he is asking for.
Stewart Malcolm McDonald (Glasgow South) (SNP) [V]
Could I raise with the Chancellor the issue of statutory sick pay? Even before the crisis hit earlier this year, statutory sick pay in the United Kingdom was not comparable with that in similar advanced economies. Sitting at only £95, we know that it is not enough for those who need it for self-isolation, and that it is estimated to make up only about a fifth of workers’ wages. Will the Chancellor look at building up the statutory sick pay mechanisms in this country, so that they are fit not just for the present times, but for the hard times people are going to face in future, and give workers the proper financial security they deserve and are lacking right now?
Rishi Sunak
At the beginning of this crisis, we made changes to the way that statutory sick pay operates, ensuring that it was payable from day one rather than day four, and for those who are self-employed, and we made changes to the way that universal credit, employment and support allowance and the minimum income floor work—all to enable some of the things that the hon. Gentleman mentioned. It is worth bearing in mind that, on the last survey evidence we have, a majority of people —something north of 60%—get more than statutory sick pay as a result of the treatment of their employers.
Jeremy Hunt (South West Surrey) (Con)
I recognise that the Chancellor will have made the decision on 0.7% with an extremely heavy heart, but does he recognise that the respect felt for this country around the world is because we have championed causes throughout our history that matter to people everywhere, such as democracy, human rights and the rule of law? One of those causes is tackling extreme poverty. To cut our aid budget by a third in a year when millions more will fall into extreme poverty will make not just them poorer but us poorer in the eyes of the world, because people will worry that we are abandoning a noble ideal that we in this country have done more to champion than anyone else.
Rishi Sunak
I am enormously grateful to my right hon. Friend for the approach that he has taken and I appreciate our conversations on this topic. Of course he rightly feels passionately about it. As he knows better than anyone, there are many ways in which we exert our influence and our values across the world—aid is just one part. Even at 0.5%, we will still be more generous as a percentage of GDP than almost all our major economy peers—France, Japan, Canada, Italy, the United States—and than the average of the OECD. The values that he cares deeply about I also care deeply about, and I look forward to talking with him further about how best we can express those values and make a difference to those who need our help everywhere that we find them.
Rachael Maskell (York Central) (Lab/Co-op)
Charities up and down the land will wonder why the Chancellor has abandoned them today. Charities have already accumulated £10 billion-worth of debt, and 20% of them could fold, despite the extraordinary work they have done for our nation during the pandemic. His statement says that there will be further rationing in the Office for Civil Society. Will he reflect on that and come back to the Dispatch Box with real money to support our valuable charities?
Rishi Sunak
Almost uniquely among other countries during this crisis, we have provided enormous financial support to our charity sector. The Department for Digital, Culture, Media and Sport has distributed £750 million to small and large charities up and down the country. They do fantastic work, and it has been a difficult time for them. That is why this Government stood behind them at a time of acute crisis.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
On 26 February, I asked the Prime Minister to offer additional support to Wales over and above the devolved settlement in the face of unprecedented flooding caused by Storm Dennis. The Prime Minister gave an assurance that funding would be “passported” to Wales. Nine months later, with winter approaching, that funding still has not been delivered. What discussions has the Chancellor had about that, and when does he think the Government will be able to deliver on the Prime Minister’s promises to Welsh communities?
Rishi Sunak
I believe we have, with £1.3 billion of extra funding next year for the Welsh Government to spend as they see fit on their devolved competencies, of which flooding is one. I am sure that the hon. Gentleman can raise that with the Welsh Government. We in England are doubling investment in flood defences over the next few years to over £5 billion, protecting over 300,000 homes, and the £1.3 billion of Barnett funding for Wales will enable that funding to go to where it is needed.
Sir Robert Syms (Poole) (Con)
I thank the Chancellor for his statement. Over the last 10 years, we have spent over £100 billion on overseas aid, with a lot of it borrowed. Most of my constituents will understand the difficult decision that the Government have had to make. At 0.5%, our aid spending will be higher than that of most of our neighbours, and probably higher than the Major Government and many other Governments in the past. He has set out the recovery in GDP and growth over the next three or four years, and no doubt the budget will go up again.
Rishi Sunak
I thank my hon. Friend for his comment. He is right—I think the average aid spending of the last Labour Government was 0.36%, so it will be sufficiently ahead of that. As I said, we intend to return to this over time when the fiscal situation allows. He will appreciate better than others the unbelievable uncertainty at the moment, but that is our intention.
Mr Clive Betts (Sheffield South East) (Lab) [V]
May I declare an interest in this question, as I suffer from myeloma, a form of blood cancer?
We all recognise and applaud the incredible work that the NHS and its staff have done for us all in the past few months. In terms of the future, does the Chancellor recognise, however, that much research for cancer is funded by charitable donations, which have fallen significantly during recent months for reasons that everyone can understand? To ensure that treatments continue to improve in the future, will he agree to fully fund cancer research to make up the difference in charitable donations, at least for the next few years?
Rishi Sunak
I am grateful to the hon. Gentleman for his question. I know that it is a topic on which he speaks passionately. He will be pleased to know more generally about our record spending on R&D next year of just shy of £15 billion; the exact allocation is for the Department for Business, Energy and Industrial Strategy, but there is a significant increase for basic research. Also, within the Department of Health and Social Care Budget settlement, there is about £1.3 billion to fund research for the National Institute for Health Research and Genomics England—both of which do a fantastic job, and I am sure will be working on treatments for us all for many years to come.
John Penrose (Weston-super-Mare) (Con)
I welcome the Chancellor’s continuing commitment to sound money. It is particularly easy to forget, in a year when we have just seen an 11.3% cut in the size of the economy, that ultimately, all the money that we are borrowing must eventually be paid back by us as taxpayers. So I urge him not to lose that focus, and as soon as possible to get back to a sustainable basis. As part of that, could he say more about the Restart programme, which he mentioned earlier—a crucial thing to get members of the long-term unemployed back into work? How many people does he expect that to help, and what benefit does he expect that to have for our long-term, sustainable economy?
Rishi Sunak
As ever, my right hon. Friend speaks fantastically good sense. He is right; we will need to return to a sustainable fiscal position, not least to build resilience for the next crisis or shock that comes along. We want to be able to react in the same comprehensive and generous way that we did this time, and that requires us to have a strong set of public finances going into it.
My right hon. Friend is right about the Restart programme, which will help, we hope, around 1 million of those who are long-term unemployed; it will be an exciting and ambitious programme. The Institute for Employment Studies has spoken very well about the evidence in favour of that type of high-quality, individual work-focused approach making an enormous difference in getting people back into work. If we can do that, we can reduce some of the long-term scarring that they will face. So I have high hopes for what that programme can achieve.
Sammy Wilson (East Antrim) (DUP)
I first welcome the £900 million that will be available to the Northern Ireland Executive, which is a reminder to the people of Northern Ireland of the economic security that we have as a result of being part of the United Kingdom. The Barnett consequentials for Wales and Scotland should also be a reminder to the people there of the benefits of the Union.
May I ask the Chancellor one thing about the levelling up fund, the infrastructure bank and the shared prosperity fund? When will he have the details of access to those, and can he assure us that the access to all those funds will be equally available to different parts of the United Kingdom?
Rishi Sunak
I can give the right hon. Gentleman that assurance. Those are UK-wide programmes and we hope to have more details about the infrastructure bank in the spring, so that we can get it up and running, at least in shadow form, as quickly as possible and make a difference to communities all around the United Kingdom.
Mark Pawsey (Rugby) (Con)
May I first join my hon. Friends in expressing concern about the proposal to reduce overseas aid, but welcome today’s announcements in particular on infrastructure, apprenticeships and research and development, which will create wealth and jobs? I also welcome the substantial support that the Chancellor has provided to help businesses and people get through coronavirus. However, my constituents know that those measures will all have to be paid for, so can he assure them that when this economic emergency is over, he will return to a policy of balancing the books?
Rishi Sunak
My hon. Friend is absolutely right. Although it is right to act in this way during the crisis, it would not be a sustainable way to operate. The important thing to know is that right now the focus should be on supporting businesses and jobs; but once our economic recovery is secure, we can turn our task to making sure that we have a strong set of public finances.
John Cryer (Leyton and Wanstead) (Lab)
The Chancellor has announced a pay freeze for hundreds of thousands of public sector workers today who do not deserve it. Firefighters, care assistants and teaching assistants will all suffer a pay freeze. What is the assessment of the economic impact of that pay freeze? There must be one in the Treasury somewhere. What is it?
Rishi Sunak
It would be wrong to describe this policy as a blanket pay freeze when a majority of those working in the public sector will see an increase in their pay next year, because they earn less than the UK median salary of £24,000 or they work in the NHS, or, indeed, they are on the national living wage. Across all those areas, there will be a pay increase. That will benefit millions of people and make a difference to the economy.
Laura Farris (Newbury) (Con)
I welcome the significant financial commitment to mental health services. One of the striking takeaways in my constituency is the proliferation in anxiety, depression and sometimes addiction that is emerging from the crisis. We know that these have a pernicious correlation with long-term unemployment and, for that reason, I invite my right hon. Friend to keep a sharp focus on mental health spending over the years ahead, because the best training programmes and the best labour market interventions in the world will only work if the workforce is mentally well enough to engage.
Rishi Sunak
My hon. Friend makes an excellent point and it is a topic that she knows very well. I hope that she was heartened to hear what I said earlier about £500 million of the increase of £3 billion for the NHS this year being specifically targeted on mental health to address all the things she said. She is right about the difference they will make for many people in our country.
Darren Jones (Bristol North West) (Lab)
Over 4 million children are in poverty in the UK. Under successive Conservative Chancellors, Sure Start centres have closed, child trust funds have been slashed, nurseries today are on the brink of collapse and the number of children falling into poverty increases month after month. It is an unnecessary national tragedy, so why, especially at these difficult times, could the Chancellor not today commit to eradicating child poverty in his economic statement?
Rishi Sunak
On the last numbers, there are 100,000 fewer children in absolute poverty than in 2010 and 750,000 fewer children living in workless households than in 2010. The hon. Gentleman asked about nurseries and early years. He will be pleased to know that an above-inflation increase in the hourly rate for nursery providers is contained in the spending review.
Richard Burgon (Leeds East) (Lab) [V]
A few months ago, the Conservative party was clapping public sector workers. Now it is cutting the pay of millions. This crisis should not be paid for on the backs of the working class, but it is. Over 2 million people are now paid less than the minimum wage—up fivefold. Sick pay is so low that people are forced to choose between their health and putting food on the table, and millions of people’s benefits—largely sick and disabled people—will rise by just 37p a week. Instead of forcing millions into poverty, will the Chancellor impose a windfall tax on those who have made super-profits from this crisis?
Rishi Sunak
The hon. Gentleman talked about those on the lowest pay. We accepted the recommendations from the Low Pay Commission to increase the national living wage by 2.2%. That will make a difference of £345 to full-time national living wage workers, as well as protecting those in the public sector who earn up to the average UK salary of £24,000, who will receive a £250 uplift.
Mr John Baron (Basildon and Billericay) (Con) [V]
I commend the Chancellor on many of these measures, including the support for the lower-paid. When it comes to funding, I encourage him not to stifle enterprise through increases in taxes, as these are often counter- productive. May I raise with him the case of social care workers? They provide an essential service but they are often overlooked, in part because they span the private and public sectors. What more can he do for them? For example, further to my letter to him, will he consider raising their personal tax threshold so that they can take home more of their pay?
Rishi Sunak
My hon. Friend is right about the importance of social care workers. He will know that they are not formally part of public sector pay settlements, but many of them are national living wage workers, as he knows, so they will benefit from the increase of 2.2% that we are putting in place for next year. He will also know that we have already made a start in the Budget on our desire to raise the national insurance threshold, delivering cash benefits to people of about £100 this year, but it is something that we will keep under review for future fiscal events.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
The Chancellor has already allowed UK unemployment to rise to 4.8% and expects it to rise further, with redundancies at a record high. Will he now admit his mistake in leaving the 3 million without furlough or the self-employed help scheme and give contractors, freelancers, creators and others the help that they so desperately deserve?
Rishi Sunak
The OBR and others have said that our economic interventions have helped to keep down unemployment and protected jobs, and that is part of the reason why our unemployment rate is lower than that in Italy, France, Spain, Canada and the United States.
Philip Davies (Shipley) (Con)
I support the Chancellor’s decision to cut the overseas aid budget, which will be widely welcomed across the country in the real world, even if not always in here. I do not see why it should be controversial to say that we should spend only what we can afford on overseas aid. I suspect that the vast majority of the British public will be asking not why he has cut so much, but probably why we are still spending so much. If some of that money that he is saving can be spent on the much-needed and long-awaited Shipley eastern bypass and on some proper flood defences in the Shipley constituency then so much the better.
Rishi Sunak
I thank my hon. Friend for his support. He makes an important point: this spending review is about delivering on the British people’s priorities. Yes, we have made some tough choices, but we have done that so that we can continue investing in the things that our constituents value most. I look forward to talking to him further about the bypass and flooding defences that he needs, but, hopefully, with a doubling of our flood defences over this Parliament, it is something that we can make progress on for him.
Steve Double (St Austell and Newquay) (Con)
May I place on record my thanks to the Chancellor for the recent announcement of support for airports, which has been very welcome? I also thank him for the measured and sensible way that he is approaching the unprecedented challenges that we are facing, but may I just raise the challenges facing the hospitality sector, which has been impacted more than any other? Although the Government have provided incredible support in recent months, the sector is facing real challenges this winter with the restrictions that we are placing on it. It says that 94% of businesses in tier 3 will be unviable, 74% in tier 2, and, even in tier 1, 30% of businesses are likely to be unviable. The sector has played an incredible part in our growth and job creation over the past 10 years and wants to continue doing so as we recover from this crisis. Will he please look again at what support we can give to the sector to make sure that it is still around in the spring to help our recovery?
Rishi Sunak
My hon. Friend is, as ever, a passionate champion for the hospitality sector, and he is right to be so. It employs 2 million people, often lower paid, and it has been hit harder than almost anybody by this crisis, which is why, as he acknowledged, we have put in place unprecedented support, from VAT cuts, initiatives over the summer such as eat out to help out, business rates holidays and now cash grants when those businesses are either closed or in tier 2 areas facing restrictions to help get them through the winter. Those grants in general will equate to the rental payment of most of those businesses—we have that information and that is the single biggest fixed cost of hospitality businesses; and, of course, they can furlough their staff. I know that it is difficult, but, hopefully, those interventions will make a difference, because he is right that we want them to be able to bounce back strongly.
Lilian Greenwood (Nottingham South) (Lab)
The midlands engine has identified priorities for investment as transport, digital connectivity and energy. That is what we need to enable the midlands and the UK to recover from this pandemic and to build back bigger, better and greener, but, according to the Institute for Fiscal Studies, the east midlands has suffered the lowest level of transport spending per person since 2014-15. We have also been at the back of the queue for all capital spending for at least five years. If the Chancellor is serious about levelling up, can he guarantee that the east midlands will receive the highest allocation of any region when he hands out his new levelling-up fund?
Rishi Sunak
The hon. Lady talked about a few different things, transport and digital connectivity being among the most important to her region. This spending review delivers on both those priorities, with record amounts of spending on road, rail, intra-city transportation, buses and cycling, and, on digital connectivity, with our plans to bring 85% of the country to gigabit-capable broadband by 2025, we are also delivering on the green plan that I outlined. I very much look forward to hearing from her and her local areas once we launch the levelling-up fund, because I am sure there will be projects we can make a difference to.
David Morris (Morecambe and Lunesdale) (Con) [V]
I welcome the levelling-up fund. From the outset I have been championing the Eden Project North in Morecambe, which is coming shortly, so will the Chancellor meet me to discuss it, as it is exactly the kind of shovel- ready project that would level up not just Morecambe, but the whole of our region?
Rishi Sunak
Yes, Mr Deputy Speaker, I think it was something about the Eden Project. I would be very happy to meet my hon. Friend to discuss his ambitions for his area and this project. I know he has put a lot of thought and energy into it, as has his community, and I very much hope we can make progress in the coming years.
Richard Fuller (North East Bedfordshire) (Con)
In his statement, my right hon. Friend said:
“The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes. These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by Government.”
He is right on that, and the private sector and businesses will respond to what he has announced today. When it comes to the consideration of taxes, will he look to protect the incentives for those who invest and grow such businesses?
Rishi Sunak
I thank my hon. Friend for his comment, as he is absolutely right, and from his own business experience he knows this well. He will know that one thing we do to incentive entrepreneurship through the tax system is our world-leading enterprise investment scheme and seed enterprise investment scheme programme, which provides significant support to private investors to help fund new businesses. We have expanded that scheme over time. I know he has thoughts on it, and I look forward to hearing them.
Navendu Mishra (Stockport) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests.
The taxpayer support for British businesses and jobs during this pandemic has been a lifeline for many, but today we hear that Rolls-Royce, which has benefited handsomely from the public purse while moving highly skilled jobs abroad, intends to shut down its historic Barnoldswick site until after Christmas and offshore the work to Japan, Singapore and Spain, in a clear attempt to break the current industrial action there. Does the Chancellor agree that these kinds of bully-boy, strike-busting tactics are utterly unacceptable and that all the financial support must be immediately withdrawn until Rolls-Royce comes to its senses, ends its lockout and gets back to the table with Unite the union to resolve this dispute?
Rishi Sunak
I know that the aerospace industry has been suffering a particularly difficult time over the past few months, and that has impacted businesses such as Rolls-Royce and others up and down the supply chain. We have put some measures in place to help airports and get people flying again, and we enjoy conversations with specific companies all the time. I urge all companies to work constructively with their workforces through what is a difficult period and, we hope, find resolution. Collectively, we are all trying to protect jobs, but of course this is a very challenging set of circumstances.
Steve Brine (Winchester) (Con)
The £325 million for the NHS to invest in the new diagnostic kit is really welcome, as will be the £1 billion to begin tackling the elective backlog caused by covid. May I ask the Chancellor to stick with that? What freedoms will my local NHS trusts have to spend that money? I have constituents who are waiting for a knee op or a hip op, and although those may not be life or death issues, they are massively life-impacting issues, as people are being prevented from getting on with their lives, working or enjoying their children and grandchildren. I ask the Chancellor to stick with that and clear the backlog.
Rishi Sunak
My hon. Friend of course knows about this particularly well from his own experience, and he is right. One of the implications of the lockdown and what we have done in the past is that we have this backlog now. He rightly says that it makes a difference to people’s day-to-day quality of life, which is why we have provided £3 billion, of which £1 billion is to tackle exactly that elective backlog. It will enable 1 million more scans and treatments to happen, and, as he says, it is something we should stick with.
Kirsten Oswald (East Renfrewshire) (SNP) [V]
More than 1 million 1950s-born WASPI—Women Against State Pension Inequality Campaign—women remain in the workforce, including in front-facing roles. Many had planned to retire but cannot do so because the Chancellor’s Government hit them with a lengthy delay in accessing their pensions. WASPI women have asked me why the Chancellor cannot sort out their pensions, allowing them to retire and freeing up their jobs for others. That would be a win-win for the Chancellor and WASPI women, so will he look to do it?
Rishi Sunak
The case has been settled in the courts and there is not much further I can add, but today we have announced an uplift of 2.5% for 12 million pensioners on the state pension, which I know will make a difference to many.
Ben Everitt (Milton Keynes North) (Con)
I am sure the Chancellor shares my vision that Milton Keynes and the wider Thames valley can be the silicon valley of Europe. We know that 88% of UK companies are currently experiencing a lack of digital skills, and that this is costing our economy £63 billion a year. May I therefore ask whether the proposal for a brand new STEM-focused science and digital technology university in Milton Keynes would be eligible to apply for funding from the new £4 billion pot for levelling up?
Rishi Sunak
We will publish further details on how the levelling-up fund will work in due course. It is for those smaller, deliverable, everyday infrastructure projects that I have talked about. My hon. Friend is absolutely right to champion technology, innovation and digital adoption by small and medium-sized enterprises. He will be pleased to know that the spending review confirms just over £50 million to support the Department for Business, Energy and Industrial Strategy to deliver productivity-enhancing programmes for SMEs. I think that one of those does involve the use of digital technology, in which the UK lags behind its peers.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
We know that families are really struggling right now. The Bank of England has said that the inflation forecast next year is 2%. Can the Chancellor guarantee that the 2.1 million public sector workers he referred to will not face a real-terms pay cut next year? Will he also explain why on earth he is still going ahead with the appalling £1,000 cut in universal credit, which will hit millions of families across the country at this incredibly difficult time?
Rishi Sunak
Those in the public sector who earn less than £24,000, which is the UK national median wage, will receive a fixed increase of at least £250. That is 2.1 million people—38% of the workforce. [Interruption.] Well, it will depend on each worker’s exact salary, but there will be a fixed increase of £250 for all of those 2 million workers.
Nigel Mills (Amber Valley) (Con) [V]
I welcome much of the Chancellor’s statement, and look forward to sending him the bid for the Ripley-Codnor bypass. Is he able to offer any encouragement to the supply chain of the hospitality industry? He is supporting the restaurants and pubs that are closed, but not the important businesses that supply them and also cannot trade because they have no customers to sell to.
Rishi Sunak
Obviously those businesses will be able to use the generous terms of the furlough scheme for their staff through the winter period. The more than £1 billion of funding that we made available to local authorities before the start of the latest national restrictions was also to support businesses and local economies in the way that authorities saw fit throughout the winter period. That funding is available at a local level, perhaps to do some of the things that my hon. Friend mentioned.
Mick Whitley (Birkenhead) (Lab)
The Chancellor has promised the British people a green jobs revolution, but the UK is fast falling behind countries like France and Germany. We need investment in the jobs of the future now. What immediate steps will the Chancellor be taking to support green infrastructure projects such as offshore wind and the Mersey tidal projects, and green jobs on Merseyside?
Rishi Sunak
I do not believe that we are behind France and Germany. We are phasing out internal combustion engine vehicles 10 years before France, and we are phasing out coal 13 years before Germany. Indeed, the Prime Minister’s 10-point plan will support up to a quarter of a million green jobs, building on the progress that we have made by being the country that has decarbonised the fastest out of all major economies.
Anthony Browne (South Cambridgeshire) (Con)
My constituency is home to the global headquarters of AstraZeneca, the private sector company that has committed to producing, on a not-for-profit basis, the so-called Oxford vaccine—not just for the British population, but for developing countries around the world. It is doing that through Gavi, the Vaccine Alliance, of which the UK, as the Chancellor said earlier, is the biggest financial supporter. The coronavirus pandemic is the biggest crisis facing the world, and the UK is in a leading position in tackling it. Will my right hon. Friend confirm that, as a result of the spending review, the UK will continue to be able to play that leading role against the pandemic?
Rishi Sunak
I can give my hon. Friend that assurance. He highlights a perfect example of this country making an enormous difference to millions of people around the world, not just with our aid budget but through the quality of our research and then our desire to find commercial partners who will bring that life-saving treatment to millions of people at cost. It is a fantastic example, and my hon. Friend is right to highlight it.
Rebecca Long Bailey (Salford and Eccles) (Lab) [V]
It was frankly opprobrious that there was nothing today to help the 3 million people excluded from Government support schemes. They are desperate, they are struggling, and some have even taken their own lives. Will the Chancellor tell me whether we are to assume that, after eight months without any change in policy, he deems it politically expedient to exclude these people, because they just do not matter?
Rishi Sunak
I am sure the hon. Lady heard the answer to the previous question on this issue. She keeps mentioning this 3 million figure without giving an explanation of whether she agrees that 1.5 million of those people should be included, given that they make the majority of their earnings from employment and are eligible to be furloughed. Indeed, that approach was supported by all trade organisations at the time when the scheme was launched.
Gary Sambrook (Birmingham, Northfield) (Con)
Fifteen years after the MG Rover collapse, there is still 150 acres of unused land in Longbridge that could be used to provide much-needed jobs locally. Will the Chancellor support my campaign, along with Mayor Andy Street, to make sure that Longbridge is at the top of the list when it comes to levelling-up and that we have those jobs right across Northfield?
Rishi Sunak
That sounds like an excellent idea. I hope that the £400 million brownfield fund, which is part of our housing fund, could be of help. I know that Mayor Andy Street has spoken to the Secretary of State for Housing, Communities and Local Government about how best he can access the brownfield fund, and this sounds like exactly the kind of project that it is designed to help.
Mrs Emma Lewell-Buck (South Shields) (Lab)
The Chancellor has repeatedly said that he does not recognise them, but today 3 million taxpayers—including many of my constituents—who have been excluded from any support at all will have been in anguish waiting for his statement. Far from protecting lives and livelihoods, he has let them down yet again. Their income is down to zero, they are losing their homes and unable to feed their families and—again—some have even taken their own lives. Is it that the Chancellor does not understand the heartache and hopelessness of poverty? Or is it simply that he just does not care?
Rishi Sunak
Anyone in the circumstances described by the hon. Lady would surely be eligible for support through universal credit, which can provide, depending on the circumstances, somewhere between £1,500 and £1,800 per family per month to help to support them if that is what they need. She talks about the self-employed as if perhaps they are not also people who benefit from better hospitals, better schools, better local infrastructure and safer streets. That is what this spending review delivers, and it will benefit everybody in the United Kingdom in that way.
Marco Longhi (Dudley North) (Con) [V]
I very much welcome my right hon. Friend’s statement and strongly applaud the Government’s commitment to fund the NHS with investment not only in hospitals, such as the £3 million for the A&E at Russells Hall Hospital in Dudley, but in diagnostic equipment, as well as for more nurses and GP appointments. Will he outline how these commitments help the Conservative party to meet its manifesto commitment to deliver stronger public services, such as through 50,000 more nurses?
Rishi Sunak
My hon. Friend is absolutely right: not only are we maintaining our commitment to the NHS’s five-year long-term settlement, but we are providing additional funds, with £3 billion for covid recovery this year, and also providing fully the extra funding required to deliver on the commitments to 50,000 more nurses, 50 million more GP appointments and, indeed, 40 new hospitals.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The British people have faced an incredibly difficult year, with covid and the resulting economic crisis. We then have the looming prospect of either a no-deal Brexit or a minimalist one that will be very disruptive for businesses. The OBR has forecast a 5.2% loss of potential GDP over the next 15 years, while the Governor of the Bank of England has said that with a no-deal Brexit we could see a situation that is two to three times as bad. How much more economic carnage and unemployment should the British people expect, with these two scenarios on top of coronavirus and its impacts?
Rishi Sunak
All I would say is that our teams are hard at work, and I am very hopeful that we can reach a constructive agreement with our European friends and partners. Our wishes in this negotiation have always been consistent and transparent and are based entirely on the precedent of what other countries have achieved with the EU, so I am very much hopeful that, with good work and a constructive attitude, we can get there.
Sir David Amess (Southend West) (Con)
In what must be the most challenging circumstances ever to deliver a spending review, I welcome the Restart scheme to help the unemployed. Last year, £500 million was announced to help youth services, and Southend YMCA greatly benefited from that. Will the Chancellor recommit to that £500 million, and will he set out a timeframe in which that can be delivered over the next five years?
Rishi Sunak
My hon. Friend is absolutely right about the importance of youth services. I am not entirely sure exactly which bit he refers to, but I am happy to talk to him further about it. He will see in today’s spending review that the National Citizen Service is still there and we have provided more funding for capital projects for youth organisations, but I will happily pick up the specific case he mentioned separately.
Kevin Hollinrake (Thirsk and Malton) (Con)
I welcome my right hon. Friend’s statement, particularly the levelling-up fund. May I make an immediate representation for dualling of the A64 in my constituency? I also welcome the changes to the Green Book. Will he take a similar look at the housing infrastructure fund, which also has a built-in bias towards spending in London and the south-east?
Rishi Sunak
I know that this is an area that my hon. Friend knows particularly well, so I am very happy to take him up on that suggestion and discuss his concerns with the Housing Secretary. I thank him for bringing it to my attention.
Tim Farron (Westmorland and Lonsdale) (LD)
There are some positives for the NHS in the Chancellor’s statement, but it does feel like there is a blind spot: in the detailed documents, as far as I can tell, there is only one reference to cancer. Bear in mind that clinicians estimate that we will unnecessarily lose 60,000 years to cancer deaths during this time, and that it may take five years for the NHS to catch up with the colossal cancer backlog. There is no reference in the Chancellor’s statement to the urgent investment in radiotherapy or other treatment mechanisms that is necessary to catch up with cancer. Will he think again? Will he meet me and a cross-party group of MPs, clinicians and patients living with cancer, so that he can think again, act now and save lives?
Rishi Sunak
Of course, it will be for the Secretary of State for Health and Social Care to do the detailed allocation of this budget, but I would point to the £3 billion for covid recovery, £1 billion of which is to help tackle the backlog of elective surgery and of screening and diagnostics, which I think will help. We have also provided £325 million to invest in new diagnostic machines, replacing about two thirds of ageing machines, which presumably helps with referrals and identification of cancer, but of course the Secretary of State for Health and Social Care will be the best person to discuss the exact allocation of the increased NHS budget.
Andy Carter (Warrington South) (Con) [V]
I praise the measured and sensible way that the Chancellor has approached this spending review, and I welcome in particular the infrastructure fund. With levelling up in the north of England a real priority, I look forward to discussing more projects for Warrington South with him. I am particularly pleased to see that those working in the lowest-paid public sector jobs will get a pay increase, but can he confirm that the extra police officers promised for Cheshire will be delivered so that we can tackle antisocial behaviour and protect our communities from the dreadful impact of county lines drug gangs?
Rishi Sunak
My hon. Friend is absolutely right about the importance of safer streets. I am pleased to tell him that this spending review makes available £400 million more for the Home Office and local policing to make sure that we can recruit an additional 6,000 police officers next year, on top of the 6,000 this year, in order to make great progress on our way to 20,000 by 2023.
Matt Vickers (Stockton South) (Con) [V]
My right hon. Friend has had to make some tough decisions on issues such as foreign aid, but can he assure me that by doing that, he will be able to focus on domestic priorities and a levelling-up agenda that can do so much for so many in Teesside?
Rishi Sunak
My hon. Friend is absolutely right. This spending review is about focusing on the priorities of our constituents. I am sure that he and his constituents will be pleased to know that we have made £3 million available today for the Tees Valley hydrogen transport hub. Teesside is at the heart of our hydrogen revolution, bringing new jobs, attracting investment and driving growth in his local area. That is an example of the kind of local priority that we can now fund, having made these tough decisions.
Hilary Benn (Leeds Central) (Lab)
The Chancellor said that he wants to invest in the places that we call home, but the homes of thousands of leaseholders are currently worthless fire risks because of the cladding scandal that they did not cause. He will be well aware that the £1.6 billion that he has already allocated is nowhere near enough to make all those homes safe again. The leaseholders do not have the money and, as far as I can tell from the Blue Book, not a single additional penny has been allocated. How much longer will my constituents have to wait before they can once again call the place in which they live a home?
Rishi Sunak
We have made available £1.6 billion, which means that, at this moment, 80% of high-rise buildings with aluminium composite material cladding have work under way or complete. That number is likely to rise to 100% by the end of the year.
With regard to people who are unable to move, I think the right hon. Gentleman is referring to the issue with the EWS1 certificates. The Minister for Housing, my right hon. Friend the Member for Tamworth (Christopher Pincher), made a statement on that recently, but the right hon. Gentleman will be pleased to know that £700,000 was made available to help more assessors to qualify to undertake those assessments. I know that my right hon. Friend the Secretary of State for Housing, Communities and Local Government is in conversations with UK Finance and the Royal Institution of Chartered Surveyors to ensure that the use or demand of those certificates is appropriate and proportionate to the needs of the situation.
Julian Sturdy (York Outer) (Con) [V]
I understand that my right hon. Friend has had to make some difficult decisions as we seek to rebuild our economy in the months ahead. I am delighted to hear his commitment to investment in infrastructure, but can he set out what that means for the north, in particular York and north Yorkshire? What benefits will it bring to my constituents?
Rishi Sunak
My hon. Friend is right that it is about making difficult decisions so that we can prioritise the things that our constituents want us to. In his area, he will be pleased that there has been a success in accessing the new stations fund for Haxby station. That is an example of the Government delivering on our promises and trying to find ways to improve local transport infrastructure in his local area to drive growth and opportunity. We will relentlessly focus on those types of priorities.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) [V]
I ask the Chancellor of the Exchequer whether we can have the new infrastructure bank in Yorkshire, in particular in Huddersfield. Is he sure that he has paid enough attention to the tremendous challenge of young people’s unemployment and young people who want to get into a job and be trained? Is the programme that he announced today sufficient to train a whole new generation of young people as green apprentices?
Rishi Sunak
I would, of course, be sympathetic to the idea of putting the bank in Yorkshire, as the hon. Gentleman knows, but he was slightly beaten to the punch over the weekend by my hon. Friend the Member for Shipley (Philip Davies), who made a pitch for Bradford. In any case, I will happily hear his thoughts.
The hon. Gentleman is right about the focus on young people. The new Restart programme will be able to help a million people who have been unemployed for over a year. Before that happens, we have the kickstart programme that will benefit a quarter of a million young people—or more if it is successful. He talked about apprenticeships. Rightly, we have increased the cash bonus to businesses to £3,000 for them to take on a fresh new young apprentice, because he is right that that is where our focus should be.
Jane Stevenson (Wolverhampton North East) (Con)
I thank the Chancellor for the range of measures to support those on low incomes and to protect the most vulnerable, whether that is through an uplift to cash for local authorities to identify and support vulnerable families, or through the holiday activities and food programme and an uplift to the Healthy Start programme. Levelling up is crucial to a seat such as Wolverhampton North-East. Can he reassure my constituents that the Government will continue to prioritise job creation, investment and other opportunities for them?
Rishi Sunak
My hon. Friend is absolutely right. The Government are committed to spreading opportunity across the country, especially in places where people feel they have not had the same fair crack of the whip. Our levelling up fund is designed to correct that. Today, her local area will be benefiting from discounted funding from the Public Works Loan Board to help with local infrastructure projects. That is a symbol of our commitment to her area and her constituents.
Bill Esterson (Sefton Central) (Lab)
The Chancellor said that my hon. Friends were wrong about the number of working people excluded from financial support. It is the freelancers and the self-employed who have not had any support who think that he is wrong. In the Liverpool city region, the Mayor, Steve Rotheram, has found a package to support some of the people who have been excluded. When will the Chancellor step up, support Steve Rotheram, Andy Burnham and the other Labour leaders in local government, and put a support package together? He has to admit that these people have not qualified for furlough, self-employed support or business grants, and most of them are not eligible for universal credit. When is he going to end this burning injustice?
Rishi Sunak
Some £1 billion has been provided to local authorities across the country to support their businesses and local economies as they see fit. That funding has, of course, been made available to the hon. Gentleman’s local authority. If that is how it chooses to use the funding, that is up to the local authority. We have provided a range of different support, whether loans, access to our more generous welfare system or mortgage holidays that, in the end, one in six mortgage holders used. Those are all ways by which we have tried to do our best to provide support to the largest number of people possible.
Robert Largan (High Peak) (Con)
I wholeheartedly welcome the announcement that doctors, nurses and NHS workers will be getting a pay increase. This crisis has shown that we desperately need to invest in our urgent care capacity. That is why I have been campaigning for new urgent care centres for both Tameside Hospital and Stepping Hill Hospital. Will the Chancellor confirm that the Government remain 100% committed to the NHS hospital upgrade programme?
Rishi Sunak
My hon. Friend is absolutely right. On top of the existing in-year funding we have provided to deal with winter pressures for A&E, the spending review confirms £3.7 billion of funding over the next few years to deliver both the 40 new hospitals we have talked about and 70 hospital upgrades. Rest assured; we remain completely committed to this programme.
Carla Lockhart (Upper Bann) (DUP) [V]
I thank the Chancellor for his statement and welcome the additional financial support for the Northern Ireland Executive. I also look forward to the detail of the pay rise for nurses, doctors and healthcare workers, and how Northern Ireland healthcare professionals can benefit. In my constituency of Upper Bann, the private sector has been absolutely devastated by covid-19. Had it not been for the support provided by him, many businesses would be closed. What will the Chancellor do to ensure that the private sector recovery is supported across the United Kingdom, and will he undertake to show his clear commitment to a UK-wide recovery by visiting my constituency, when restrictions permit, to meet businesses who want to thank him and be part of our national economic recovery?
Rishi Sunak
I thank the hon. Lady for her kind comments. She is right about the importance of our businesses, especially our small and medium-sized businesses, in helping to drive our recovery. We have provided cash grant support to those most impacted by the restrictions and that extra funding comes to Northern Ireland. On a UK-wide basis, we have provided tax cuts, grants, loans and other measures that she will be aware of. She can rest assured that I will keep all that in my mind as we think about how to exit the crisis. I look forward to my first visit as Chancellor, hopefully, to Northern Ireland in the near future.
Angela Richardson (Guildford) (Con)
I welcome my right hon. Friend’s statement this afternoon. He will know that affordable housing is needed in my constituency, but that development is constrained by green belt, which we are rightly enhancing and protecting as a manifesto commitment. Therefore, will he outline what fiscal steps he is taking to support councils like mine to regenerate brownfield sites?
Rishi Sunak
My hon. Friend is absolutely right about the importance of going to brownfield first. Today’s spending review makes available an additional £100 million for non-mayoral combined authorities to access remediation funding. My right hon. Friend the Housing Secretary will be able to talk to her in more detail about that, but it is exactly the kind of thing that I think could make a difference in her constituency.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]
By introducing the emergency measure to increase universal credit by £20 per week, the Chancellor was acknowledging what many people have known for years: universal credit is simply not enough to live on. If that was the case during the pandemic, why will he not commit to retaining this uplift permanently?
Rishi Sunak
We put in place a range of temporary measures because we were dealing with an unprecedented crisis. We are now working our way through that crisis, and the future looks considerably brighter than it did in March, not least because of the medical advancements and our ability to do improved testing, so we can look forward. We keep everything under review. The uplift lasts all the way to the spring. As we get to the spring and have more clarity about the future path of our economy and restrictions, we will of course be mindful of how to support and protect those who are most vulnerable in our society.
Martin Vickers (Cleethorpes) (Con)
While I share some of the concerns expressed by colleagues about the aid budget, I think that if we are to continue asking our constituents to make sacrifices, this temporary move is the right one. Can the Chancellor give an assurance that the Greater Grimsby town deal, which is of great benefit to my constituency, will continue to be funded? He is aware from a note I gave him last week that modest support for LNER would restore our direct rail service to London, and I hope he can provide that.
Rishi Sunak
I thank my hon. Friend for his support. He is right about my need to make difficult decisions and tough choices so that we can prioritise the things that he talked about. I believe that his local area has received some seed funding to examine proposals for the south Humber line, which I hope will make a difference to his constituents. I hope that he and I can have a productive conversation about our levelling-up fund, as we figure out how best to support the wonderful town of Grimsby with its future ambitions.
Rachel Hopkins (Luton South) (Lab)
It is irresponsible to pit public sector and private sector workers against one another in the race to the bottom on wages, especially when key workers across both sectors kept us going through the pandemic. Notwithstanding the small amount given to low-paid workers, who frankly deserve better, this pay freeze for civil servants will also freeze any meaningful action on tackling the gender pay gap in the civil service, which is 12%. Will the Chancellor outline what discussions he has had with the Cabinet Office about eradicating the gender pay gap in Departments?
Rishi Sunak
For the record, no one is trying to pit anyone against anyone else. This is simply about doing what is fair for the country. It is the right decision to make. It is a difficult decision, but we have taken a targeted approach to protect those on lower incomes and those in the NHS, ensuring that a majority of public servants will receive an increase in their pay next year. I would be happy to go away and look at the gender pay gap in the civil service and ensure that we are making good progress on eliminating it.
Mike Wood (Dudley South) (Con) [V]
We all want to see people’s wages go up again after the pandemic, and my right hon. Friend’s statement provides a strong foundation for securing that. At a time when many workers in the private sector face cuts or job losses, I can understand why it is necessary to pause public sector pay rises, other than those for frontline NHS workers and those earning less than the national average. Will he join me in urging the Independent Parliamentary Standards Authority to ensure that that freeze also extends to the salaries of Members of Parliament?
Rishi Sunak
My hon. Friend makes an excellent point, and the way he framed it was spot on. He will be reassured to know that the Chancellor of the Duchy of Lancaster has written to IPSA on behalf of the Government, the Prime Minister and I to express our views on the situation, to inform it about the pay policy that we have put in place in the public sector and to urge it to take account of that when it sets pay policy. Of course, it is an independent body, but I hope very much that it will look at what we are doing.
Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]
The Youth Violence Commission report, published earlier this year, highlighted the importance of high-quality youth services provision, yet in a recent written response to the report, the Under-Secretary of State for the Home Department, the hon. Member for Louth and Horncastle (Victoria Atkins), made no mention of the youth investment fund, and neither did the Chancellor today. Indeed, when the hon. Member for Southend West (Sir David Amess) asked about it, the Chancellor did not seem to know what he was on about. Does this mean that the promised and already delayed £500 million has been shelved?
Rishi Sunak
No, it has not been shelved, and I can he tell the hon. Lady that there is extra funding in this spending review for youth services. There is an amount of money for extra capital projects for youth clubs and, of course, funding for the National Citizen Service. More generally, the Government will review their approach to all youth services later this spring, and my right hon. Friend the Secretary of State will set out the details in due course.
Andrew Jones (Harrogate and Knaresborough) (Con)
I welcome the focus on infrastructure in the statement. As my right hon. Friend knows, I chair the all-party parliamentary group on infrastructure, and I can tell him that the industry has been looking for the certainty that he is providing today. Does he agree that that certainty will allow the industry to plan better and, through that, to deliver better value and develop skills programmes, including apprenticeship programmes?
Rishi Sunak
My hon. Friend is absolutely right. It is because of that multi-year certainty, particularly on the capital side, that we can deliver projects more efficiently, faster and at lower cost. That certainty also helps the supply chain to take on new apprentices—helped, indeed, by our apprenticeship bonus as well. He is absolutely right to say that we must train the next generation and create jobs as we deliver this infrastructure, and that is exactly what we are doing.
Mr Toby Perkins (Chesterfield) (Lab)
Britain’s publicans and the wider hospitality trade are facing a catastrophic Christmas. The Government’s mishandling of coronavirus, the lack of evidence behind their policies, particularly on pubs, and the lack of a financial package to support pubs after the second lockdown will mean that many of them never open their doors again. Rather than getting to his feet and congratulating them on what they did in the first lockdown, will the Chancellor actually give Britain’s publicans some kind of sense that a package is coming that might see them through the winter?
Rishi Sunak
The reason I talk about the things that we have done is that they last all the way through the winter to next spring, whether it is the VAT cut or the business rates holiday. I have consistently come to this Dispatch Box to support the hospitality industry. Many times I have been accused of doing the wrong thing by Opposition Members, but the local restrictions grants that we put in place will last through the winter, which means that if a pub is closed, it will receive up to £3,000 per month. When we look at the average rateable value of a pub in England, we see that the vast majority of small and medium-sized pubs will have their rent covered by that. Of course, they can furlough their staff as well, and those pubs operating in tier 2 areas under restrictions will still get a grant worth 70% of that value. Of course we are trying to do what we can to support the hospitality sector. I have done that since the beginning of this crisis, and I will keep doing so.
Nickie Aiken (Cities of London and Westminster) (Con)
I congratulate my right hon. Friend on his statement today and on his stamina, as mine will be the 80th question he has answered so far this afternoon. Rough sleeping and tackling the causes of rough sleeping are subjects close to my heart. Sadly, in my constituency, we see more rough sleepers than in any other constituency in the United Kingdom. Will my right hon. Friend give me an assurance that today’s statement will provide financial support so that we can focus on the Government’s priority to end rough sleeping by 2024?
Rishi Sunak
I can give my hon. Friend that assurance. I think £254 million has been made available to local authorities to help them to end rough sleeping. That is a 60% increase in cash terms on the money available this year. She is absolutely right to say that this is something we must end, and I know that the funding will make an enormous difference in her constituency. I know this is an issue that she cares passionately about.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Braehead Foods is a large employer in my constituency that supplies top-quality produce all over the United Kingdom. Furlough has been welcome for the company, but it needs additional support to cover fixed overheads while borrowing is maxed out and orders are almost non-existent. Will the Chancellor please reconsider past requests from myself and the Federation of Wholesale Distributors to provide a grant or rates relief system that can be replicated in Scotland for UK food wholesalers such as Braehead that are above the £51,000 business rates threshold, so that they can stay afloat and play their part in the post-covid economic recovery?
Rishi Sunak
Business rates are, of course, a devolved competency, and I am sure the hon. Gentleman can talk to the Scottish Government about their plans. They will receive £2.4 billion of Barnett consequentials as a result of what we are doing this year, and they could choose to use some of that funding to provide support in the way that he asks.
Bim Afolami (Hitchin and Harpenden) (Con)
Earlier this week, I spoke to many people and companies— training providers and others—in my constituency about apprenticeships, and how we need to improve the system and make it more flexible. Will the Chancellor set out in further detail what the measures in this spending review will do to help businesses, training providers and young people get the apprenticeships they deserve?
Rishi Sunak
My hon. Friend knows this well, from his own business experience, and he is absolutely right. What businesses have been asking for is more flexibility on how levy funds are used. I am pleased that we can deliver that today. It means businesses can transfer their unspent levy funds down the supply chain easily, in bulk, to small and medium-sized companies. We are going to create a matching service for that to happen, and we are also going to allow employers, in certain industries at first, to front-load some of their training funding, which is what they also wanted. Those obviously will be funded by the Government—all those changes that happen as a result of our getting less in the levy funding—but we think they are the right thing to do. They will support business and support apprenticeships, and he is right to raise it.
James Wild (North West Norfolk) (Con)
The focus on the NHS and infrastructure is welcome. The Queen Elizabeth Hospital in King’s Lynn is on the frontline of dealing with covid, and it is 40 years old but was built to last only 30 years. Will my right hon. Friend look seriously at the compelling case for QEH to be one of the eight additional hospitals to be built on top of the 40 announced today?
Rishi Sunak
I look forward to hearing from my hon. Friend about the plans and the ambitions he has for his local hospital. The Secretary of State for Health will also be interested. My hon. Friend will know how committed we all are to improving our hospitals and having new ones across the UK. There is funding for that today, but I am happy to discuss it further.
Beth Winter (Cynon Valley) (Lab) [V]
In Wales, aerospace generates £1.47 billion in GVA for the Welsh economy. Since the pandemic, GE Aviation, which employs 200 of my constituents, has suffered 600 job losses, with future job losses likely. The sector faces a very uncertain future, which will have a devastating impact on our communities. These highly skilled workers have transferable skills. With the Chancellor’s stated interest in funding the development of green initiatives, will he consider a sector-specific package to support such a development for my constituents?
Rishi Sunak
I know from my conversations with the industry that one of the things it was very keen to see was an extension of our job support and furlough schemes, which is something we have been able to provide, and I know that will make a difference in preserving those valuable skill matches the hon. Member talked about. She will also know that there is an existing research and development park that the Department for Business runs, where it works with the aerospace industry to provide access. Some of the new R&D we have put aside for our net zero transition will also help because it is designed for reducing emissions and finding new ways in the transportation sector.
Mr William Wragg (Hazel Grove) (Con)
As somebody who campaigns to protect green-belt land, I welcome my right hon. Friend’s additional investment in prioritising brownfield developments. His changes to the Green Book will also benefit the north-west in relation to infrastructure investment. Will he say more about what he can do to incentivise business growth in the north of England, which will bring jobs and, importantly, tax revenue to fund many of the spending commitments he has announced today?
Rishi Sunak
My hon. Friend is absolutely right. Although not part of the spending review, just very recently announced is the extension to the annual investment allowance, which was due to expire at the end of this year. This allows small and medium-sized companies to write off, in full, investments of up to £1 million, so that is a tax break that we are extending into next year. I know that it will be warmly welcomed by businesses in his constituency, and it will allow them to invest in their growth in a tax-advantaged way.
Peter Kyle (Hove) (Lab)
Brighton and Hove has double the national average number of people renting their homes, yet the cost of rental in Brighton and Hove is the same as in central London. I am hearing from an alarming number of people who are struggling to pay their rent. They are either running businesses or they are in employment that is not covering the bills. They are running out of savings, and soon they will be destitute. Can the Chancellor say—he did not say anything about rental homes in his statement—what assistance can be given to making sure that people can stay in their homes till the end of this crisis and then start earning money again?
Rishi Sunak
What I can say is that the local housing allowance uplift that we put in place this year will be maintained into next year—the £1 billion—and I know that is of benefit to about 1 million households, at about £600 each. That is the main announcement today, but I would be very happy to hear if there are further things. The hon. Member will know about our £12 billion affordable homes programme, which is designed to build 180,000 affordable homes over the coming years as well.
Harriett Baldwin (West Worcestershire) (Con)
It is almost exactly a year since we launched our manifesto, and today’s sobering statement has laid bare the impact that the pandemic has had on the nation’s finances and the difficult choices the Chancellor is having to make. He has done well to keep manifesto pledges on track, but I feel I need to make it clear that I personally feel ashamed that the only manifesto pledge we are breaking today is our promise to the world’s poorest.
Rishi Sunak
I know that this is a topic about which my hon. Friend feels passionately, and rightly so. As she will have heard me say, we do this with a heavy heart. It enables us to make progress on our other priorities, and it is indeed temporary. We intend to return to 0.7% when the fiscal circumstances allow.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind) [V]
According to the Institute for Fiscal Studies, public sector pay is now at its lowest level in decades relative to that in the private sector. Although the announcement of a pay rise for NHS workers is welcome, other public sector workers will be put in even greater financial insecurity by the pay freeze. Does the Chancellor not feel that, in the context of the great work those people are doing in this pandemic, the public sector pay cap is a dramatic failure to show our appreciation for all their hard work?
Rishi Sunak
The hon. Lady mentioned the relative pay premium. It is worth bearing in mind that there still is a pay premium. The latest numbers we have, from 2019, show a 7% pay premium between public and private sector wages. That premium will without doubt have been exacerbated by the growing disparity in public-private sector wages that we are seeing this year. So in the interests of fairness and of protecting public sector jobs, I think it is right that we have taken a targeted approach and prioritised pay rises for those on lower incomes and in the NHS.
Tom Hunt (Ipswich) (Con)
I very much welcome the £4 billion levelling-up fund, but it cannot just be about the north and the midlands. Ipswich will need to be part of the mix as well. I also welcome the over £7 billion extra funding for schools, but I am very passionate about special educational needs provision, as the Chancellor will know, and I just wanted assurances from him. We are talking about this extra investment and the extra 500 schools in the next decade. That must include providing first-class special educational needs provision, which does cost a lot but is absolutely worth it.
Rishi Sunak
I know about my hon. Friend’s passion for this subject and I am pleased to be able to tell him that £300 million has been allocated for new school places for children with special educational needs and disabilities, which is, I think, about four times as much as was provided to local authorities a year ago.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
We have heard very much a smoke and mirrors statement today, with the Chancellor repeatedly saying that there is more cash year on year than in the last decade. Well, that is easy to say after 10 years of austerity and cuts. But I want to focus particularly on the local government settlement, which is a static settlement on the departmental expenditure limit but has this mysterious phrase, “core spending power”, which has become commonplace now in Government and includes the option to increase council tax. Council tax is a regressive tax. There are some councils with a very low council tax base where the percentage increase will mean very little money into the coffers. Even if they were to go down that route, how is he going to ensure, in his levelling-up agenda, that they do not lose out because they have a lower council tax base?
Rishi Sunak
As a former local government Minister, which was my first job, I am happy to tell the hon. Lady that there is nothing smoke and mirrors about core spending power. It is the metric on which the local government finance settlement is done each year and it is the main metric on which it is focused. It is going up 4.5%, which is a very high level compared with that in any of the last years. She is right about how council tax works, which is why we have put in an additional £300 million of grant on top of the existing grant. Part of that is used for equalisation and the exact way that that works is a matter for MHCLG. As is always the case, we have an equalisation element to the grant to deal with the specific issue she raises.
Tom Tugendhat (Tonbridge and Malling) (Con)
First, may I pay tribute to my right hon. Friend, who has the most extraordinarily difficult job in juggling the nation’s finances at this time? I pay tribute to him for his investment in levelling up, and I also pay tribute to his focus on business, which, after all, is going to pay for all the money that he has just spent. However, will he perhaps tell me a bit about the aid budget? I have noticed 20 basis points moving from aid into defence. It is a very welcome defence budget, certainly, but at a time when aid has never been more needed in extending the perimeter of our public health to countries where the covid crisis would otherwise run wild, surely this is not exactly the right moment to be reducing those defences.
Secondly, does my right hon. Friend agree that the International Development (Official Development Assistance Target) Act 2015, to which he has made reference this afternoon, clearly gives him the opportunity to opt out of the 0.7% target according to three different metrics, all of which are covered by the covid crisis? He can therefore do his reduction, if he feels it is necessary, with no change in the law whatever.
Rishi Sunak
I am thankful to my hon. Friend for his comments and, indeed, the constructive conversations I have had with him on our aid budget, our defence budget and, more generally, our place in the world, which he rightly champions, and he does a very good job at that. He is right that we should look holistically at this, and he made a good argument for why we play a role, particularly with providing security through our defence budget to many places. He is also right about the 2015 Act and the so-called ouster provision contained within it, but given that we cannot predict with sufficient certainty when exactly the current fiscal circumstances will have improved and given our need to plan accordingly, we do intend to look at bringing forward appropriate legislation in due course. However, my right hon. Friend the Foreign Secretary will make a statement tomorrow and can answer the question in more detail.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
May I admire my right hon. Friend the Chancellor’s stamina in answering well over 90 questions? I also warmly welcome his statement this afternoon and in particular the £100 billion he announced on infrastructure spending, which includes some vital projects in my constituency, notably the levelling-up fund and the feasibility study for the Cirencester light railway, the reconfirmation of the funding for the A417 and, above all, the extra funding to improve gigabit broadband, which is an issue my rural constituency suffers from. Will he confirm that very hard-hit economies, such as Gloucestershire’s, will benefit from this infrastructure funding, and that it will help speed up a strong recovery?
Rishi Sunak
I thank my hon. Friend for his kind words in support. He is absolutely right: we want to ensure that this record investment in infrastructure brings tangible benefits to our constituents wherever they live, whether that is in the rural south-west or a town up in the north-east. All the people of this country should see measurable improvement in the quality of their lives and see the opportunities that they can seize ahead of them. That is something that the Government will focus relentlessly on and intend to deliver.
Mr Deputy Speaker (Mr Nigel Evans)
It is not often that I get to bring a smile to the Chancellor’s face, but that is it. I thank him for his statement today and answering the questions. He was on his feet from 12.45, which is over two and a half hours. I am extremely grateful, as I am sure is the entire House of Commons.
I have now to announce the result of today’s deferred Division on the motion relating to the draft European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020. The Ayes were 354 and the Noes were 261, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
We will now suspend for a brief period for the sanitisation of the Dispatch Boxes and the safe departure and entrance of Members of Parliament.
Virtual participation in proceedings concluded (Order 4 June)
Notification of Contingent Liability
Rishi Sunak Excerpts(4 years ago)
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The Chancellor of the Exchequer (Rishi Sunak)
The Monetary Policy Committee (MPC) of the Bank of England decided at its meeting ending on 4 November to ask for an expansion in the maximum limit of purchases that may be undertaken by the Asset Purchase Facility (APF). This will encompass up to £150 billion of further purchases of gilts to support the economy.
In light of the recent economic conditions, the MPC judged further asset purchases financed by the issuance of central bank reserves should be undertaken to enable the MPC to meet its statutory objectives, and thereby support the economy. I have therefore authorised an increase in the total size of the APF of £150 billion. This will bring the maximum total size of the APF from £745 to £895 billion.
In line with the requirements in the MPC remit, the amendments to the APF that could affect the allocation of credit and pose risks to the Exchequer have been discussed with Treasury officials. The risk control framework previously agreed with the Treasury will remain in place, and HM Treasury will keep monitoring risks to public funds from the facility through regular risk oversight meetings and enhanced information sharing with the Bank.
There will continue to be an opportunity for the Treasury to provide views to the MPC on the design of the schemes within the APF, as they affect the Government’s broader economic objectives and may pose risks to the Exchequer.
The Government will continue to indemnify the Bank and the APF from any losses arising out of, or in connection with, the facility. If the liability is called, provision for any payment will be sought through the normal supply procedure.
A full departmental minute has been laid in the House of Commons providing more detail on this contingent liability.
[HCWS569]
Future of Financial Services
Rishi Sunak Excerpts(4 years ago)
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The Chancellor of the Exchequer (Rishi Sunak)
With permission, Mr Speaker, I would like to take this opportunity to update the House on our plans for one of the UK’s most productive and innovative sectors: financial services. They will be essential to our economic recovery from coronavirus, creating jobs and growth right across our country. As we leave the European Union and start a new chapter in the history of financial services in this country, we want to renew the UK’s position as the world’s pre-eminent financial centre. My hon. Friend the Economic Secretary to the Treasury will lay the foundations later, through the Financial Services Bill. I would like to put that Bill into context now by setting out for the House our plans to make this country more open, more technologically advanced and a world leader in the use of green finance.
Financial services have been fundamental to Britain’s economic strength for centuries and they remain fundamental today. The vigour and creativity of this industry adds over £130 billion of value to the UK economy, employs over 1 million people and has been a critical source of revenues to support the NHS through coronavirus, contributing nearly £76 billion in tax receipts last year. Let us put paid, once and for all, to the myth that financial services and the City of London are synonyms; two thirds of the people employed in financial and professional services work outside London, in places such as Edinburgh, Leeds, Durham, Cardiff and Belfast. About half of all financial services exports come from outside London too, with the north and midlands alone exporting as much as the entire financial services industry of France.
This is the start of a new chapter for financial services. The industry is better regulated, better capitalised and more resilient than it was in 2008. Coronavirus has reminded us that financial services are essential services, and the whole House will share my gratitude to the people keeping their local bank branches open, supporting vulnerable customers and working at extraordinary pace to deliver over £60 billion of new loan schemes, reminding us that this industry is at its best when it puts the interests of consumers first. As we leave the EU, we have an opportunity to set out a new vision for this sector—a vision based not on a race to the bottom, but for a financial services industry that is open, innovative and leads the world in the use of green finance.
I am taking three steps towards that vision today. Our first task as we write this new chapter for financial services is to give certainty on our approach to regulation after we leave the transition period. One of the central mechanisms for managing our cross-border financial services activity with the EU and beyond is equivalence. I remain firmly of the view that it is in both the UK’s and EU’s interests to reach a comprehensive set of mutual decisions on equivalence. Throughout, our ambition has been to manage these co-operatively with the EU, but it is now clear that there are many areas where the EU is simply not prepared to even assess the UK, so we need to now decide on how best to proceed. Of course, we will always want a constructive and engaged relationship with the European Union, but after four years I think it is time for us to move forward as a country and do what is right for the UK. To provide certainty and stability to industry and deliver our goal of open, well-regulated markets, I am publishing today a set of equivalence decisions for the EU and European economic area member states. Of course, we are ready to continue the conversation where we have not yet been able to take decisions, but in the absence of clarity from the EU we are acting unilaterally to provide certainty to firms, both here and in Europe.
I am also publishing today a detailed framework for our approach to equivalence more generally. Our approach here will be simple: we will use equivalence when it is in the UK’s economic interest to do so, taking a technical, outcomes-based approach that prioritises stability, openness and transparency. And of course we now have the freedom to build new, deeper financial services relationships with countries outside the EU. We are making good on that promise already, progressing our partnership with: Switzerland, the second biggest financial hub in Europe after the UK; India, holding a significant economic and financial dialogue just two weeks ago; and Japan, agreeing a new partnership that goes further than the EU’s own financial services arrangements.
Equivalence is not our only tool to ensure openness as a jurisdiction. Control of our own regulatory regime means that we need to be clear with our trading partners about how our overseas firms access the UK’s markets in a way that is predictable, safe and transparent, so I am announcing today that we will launch a call for evidence on our overseas regime before setting out our future approach next year. To boost the number of new companies that want to list here in the UK, I am setting up a taskforce to make recommendations early next year on our future listings regime. To build on the 113,000 jobs already supported by investment management, we will shortly publish a consultation on reforming the UK’s regime for investment funds. To encourage UK pension funds to direct more of their half a trillion pounds of capital towards our economic recovery, I am committing today to the UK’s first long-term asset fund being up and running within a year. To ensure that UK financial services exports to the EU remain competitive, we will treat those exports the same as we do for other countries. That means that UK firms will be able to reclaim input VAT on financial services exports to the EU—support for British industry and jobs worth £800 million.
We are known in this country not just for our openness, but for our ingenuity and inventiveness, too. The second part of our new financial chapter for financial services will use technology to deliver better outcomes for consumers and businesses. We are building on our existing strengths as a leading global destination to start, grow and invest in FinTech, and I look forward to welcoming Ron Kalifa’s report in this important area. We are staying at the cutting edge of payments technologies where we have just concluded the first stage of our payment landscape review and will shortly publish new plans to support the sector. We will make sure our regulatory environment is ready to manage the far-reaching implications of technology on money itself. We will publish a consultation shortly to make new forms of privately issued currencies, known as stable coins, meet the same high standards we expect of other payment methods. The Bank of England and the Treasury are considering further whether central banks can issue their own digital currencies as a complement to cash.
Finally, this new chapter means putting the full weight of private sector innovation, expertise and capital behind the critical global effort to tackle climate change and protect the environment. We are announcing the UK’s intention to mandate climate disclosures by large companies and financial institutions across our economy by 2025, going further than recommended by the taskforce on Climate-Related Financial Disclosures and we will be the first G20 country to do so. We are implementing a new green taxonomy, robustly classifying what we mean by “green” to help firms and investors better understand the impact of their investments on the environment. To meet growing investor demand, the UK will, subject to market conditions, issue our first ever sovereign green bond next year. This will be the first in a series of new issuances, as we look to build out a green curve over the coming years, helping to fund projects to tackle climate change, finance much-needed infrastructure investment and create green jobs across the country.
We have set out today our vision for this new chapter in the UK’s financial services industry, a vision of a global open industry where British finance and expertise is prized and sought after in Europe and beyond, a technologically advanced industry, using all its ingenuity to deliver better outcomes for consumers and businesses, a greener industry, using innovation and finance to tackle climate change and protect our environment and, above all, an industry that serves the people of this country, acting in the interests of communities and citizens, creating jobs, supporting businesses and powering growth as we direct all our strength towards economic recovery. I commend this statement to the House.
Anneliese Dodds (Oxford East) (Lab/Co-op)
We have become used to disjointed, last-minute policy making recently in this House. Today’s events—with a statement entitled “the Future of Financial Services” on the very day that the Financial Services Bill is being debated—surely takes this to new heights.
The UK produces 1% of global emissions, but companies and financial institutions based here produce 15% of those emissions. Action from the Government to match the green ambitions of many in financial services cannot come too soon. Recent developments have unfortunately gone in the wrong direction. Over the last decade, the UK has pumped £6 billion into overseas fossil fuel projects via UK Export Finance, so will the Chancellor do as Labour has demanded and immediately ban the financing of fossil fuel projects through UK Export Finance?
Labour supports the move to greater disclosure of climate-related information. Two months ago, we called on the Government to show leadership and introduce mandatory reporting ahead of COP26. The Chancellor’s announcement and that of the Financial Conduct Authority this morning are positive, but they only relate to a “comply or explain” basis, with full implementation not set for many years—until 2025. The climate crisis demands bolder action. Will the Chancellor move to mandatory reporting in the 2021-22 reporting year?
Again, the introduction of green gilts is welcome, but they are mechanisms, not ends in themselves; they obviously depend on where the money raised is then invested. So far this year, the UK Government have announced around £5 billion in green investment. That compares with £36 billion in Germany and £27 billion in France. Where is this Government’s ambition for a green recovery from the coronavirus crisis, and where is the replacement for the green investment bank that the Conservatives sold off?
As the Chancellor rightly said, the financial sector is of course critical in ensuring that start-ups and scale-ups can access the capital that they need to grow and succeed, and that is so important right now. But that must go hand in hand with oversight and protection. The drive to encourage more tech companies to list on our stock exchange cannot come at the expense of corporate responsibility, so what will he do to ensure the long-term health of British companies and the protection of British investors? And where is the action here to protect people’s access to local bank branches and to cash on their high streets? There is more in this statement about stablecoins—hardly the talk of living rooms up and down the land—than there is about people’s access to cash.
While we debate these often welcome measures, we must not forget the elephant in the room: this Government’s mishandling—I am calling it that because that is what it is—of ensuring market access for our firms to our largest trading partner. One in every 14 UK workers is employed in financial and related professional services, yet the City of London Corporation has recently said that the approach to negotiations makes them feel like the
“neglected child of an acrimonious divorce”.
With weeks to go until we leave the transition period, we still do not know whether the EU will determine that our rules are equivalent to its own. The Chancellor’s predecessor said that
“achieving equivalence on day one should not be complicated.”
The deadline for achieving equivalence was June of this year. By that date, the UK had filled in just four of the 28 forms that it needed to complete. This Government cannot even complete the paperwork on time to secure market access to our largest export industry. The Chancellor said that today he was setting out our approach to equivalence. That should have been done months ago; it is such a critical aspect of the UK’s economy.
We have already seen damage being done. EY research suggests that over 7,000 jobs have already gone and that £1.2 trillion in assets are set to be relocated from the UK, with potentially worse to come as firms making plans decide not to locate those plans and jobs within our borders. It is too late now to strike a deal that would preserve market access securely; too late now—a phrase, sadly, that we are coming to associate with this Chancellor. Let me ask him, when did one of our most important sectors fall so far down his list of priorities?
Rishi Sunak
I was hoping that this would be a rather more technical discussion. It was telling that we had all those questions from the hon. Lady but not really, until the last sentence, any word of praise or recognition for this industry. [Interruption.] Absolutely, it was about trying to score political points, sneering and sniding, with no recognition of the importance of this industry up and down the country and all the people who are employed in it—no recognition whatsoever. When I talked about the hard-working people in this industry who were making sure that customers had access to their branches and access to loans during the coronavirus, all I heard was muttering. That is not the right praise for the people in this industry because they have been working very hard and it is appropriate that they get the recognition that they deserve for that—and they will get it from this Government.
The hon. Lady asked about the TCFD disclosures and comply or explain. Comply or explain is the approach that others have taken. We will be the first major economy—the first in the G20—to mandate disclosures by 2025. A road map has been published today. It is the most ambitious timetable that any major economy has done to date. In fact, it goes far beyond what was recommended by the taskforce. I think that is something that Government Members at least will very proud of.
The hon. Lady asked about access to cash. She should know that, in the middle of October, on about the 15th, we published our access-to-cash call for evidence, which I announced back at Budget in March. The responses to that will inform our future legislative strategy. We laid out clearly that we believe it is important that everyone has access to cash. Depending on the responses to that consultation, we will decide on the appropriate next steps.
The hon. Lady commented on our response to the equivalence process from our EU partners. I think she was trying to accuse us of being slow in replying, or not quite replying sufficiently. That will be news to the team that has spent months producing 2,500 pages of responses to the Commission responses. I might add, as she seems more willing to defend the EU in its conduct of this process, that we have not had a single question back from the European Union after sending 2,500 pages of responses over to it. I might also add that we did not feel it necessary to send it thousands and thousands of pages—we adopted a constructive approach that required very little answers, given that we know its current regulatory arrangements because we all share the same ones.
We have chosen to take an approach that prioritises financial services. Rather than wait, we have acted unilaterally to provide certainty to our financial services firms and to enshrine our reputation as a place where global firms can come and do business, because this will always be the most open, the most competitive and the most innovative place to do financial services anywhere in the world.
Mr Speaker
We have two withdrawals, so I come to Alison Thewliss, the SNP spokesperson.
Alison Thewliss (Glasgow Central) (SNP)
Thank you, Mr Speaker. The Chancellor said in response to the shadow Chancellor that he was expecting a technical discussion. Well, technical discussion might have been possible if we had not received a heavily redacted statement at one minute to 4, which is disgraceful and disrespectful to Opposition Members. He does it time and again, and it is just not on.
Financial services are of huge importance to Scotland. I note that the Chancellor did not mention Glasgow, where we have the huge Barclays complex coming out of the ground as a sign of confidence in the Scottish economy. It is not uncommon that financial services companies have been planning on moving their assets from London to elsewhere in the UK, and the Chancellor really needs to get behind that. Things have been moved out of the City of London to right across these islands because these are important, good-quality jobs.
This year, coronavirus has overtaken Brexit for financial services in terms of focus and capacity. As a consequence, there has been significantly reduced bandwidth for people working in financial services companies to prepare for the disastrous consequences of Brexit. So can the Chancellor tell us how he will support companies with their preparations, particularly as we do not know what we are preparing for—details of the relationship with Europe are so scarce because we still do not know what that relationship is going to look like? Given that instability and uncertainty are anathema to the financial sector, can the Government provide any clarity on what people ought to be preparing for in only a few weeks’ time?
We welcome the introduction of green gilts. The Treasury Committee has been looking at them, and 16 other countries have done this, including Germany and Sweden. Can the Chancellor tell us how this will impact on Scotland? What discussions has he had with the Scottish Government on this? How will he ensure that Scotland gets its fair share of any investment to come? Will the UK Government take this opportunity of new financial powers to back the transition to a low-carbon future, to accelerate their net zero targets and to match the Scottish Government’s ambitious commitments?
Equivalence is a point in time, and as the UK diverges, there is a huge risk to our access to European markets. As the Association of British Insurers has pointed out, equivalence has been used in the past as a political weapon, so how does the Chancellor plan to mitigate that?
Lastly, the Government must put their own house in order on green issues. The Treasury has a good opportunity to work across different Departments, such as UK Export Finance, to ensure that they are all making their contribution to a greener future. The Chancellor must take this seriously right across the Departments if he is going to come to COP26 in Glasgow next year with anything worth the candle.
Rishi Sunak
The hon. Lady talked about moving jobs out of London. It is already the case that the majority of financial and professional services jobs—two thirds—are out of London. I completely agree with her that Scotland has a proud heritage in financial services, and long may that continue.
With regard to providing certainty for firms and the support given to them, the hon. Lady will be aware that we put in place a temporary permissions regime some time ago, which provided that certainty to overseas firms needing to continue operating here after the transition period. They have known about that for a while, and it has been warmly welcomed. With regard to specific financial support, I point her to the announcements on input VAT, which will ensure that UK exports of financial services to the EU are not at a competitive disadvantage. Those firms will be able to reclaim input VAT, which will be worth several hundred million pounds in benefit to them, wherever they are in the UK.
The hon. Lady mentioned the ABI. I think that the ABI will warmly welcome the review that we have put in place on Solvency II. The feature of our insurance industry is the prevalence of long-term annuities. The capital treatment of those is not well managed by European rules, and there is an opportunity for us to improve things in that area, which is why the ABI has, I think, warmly welcomed our review of the Solvency II insurance regulations.
Lastly, the hon. Lady talked about the fact that others might wish to use equivalence as a political weapon. As I have set out, that will not be our approach. We will approach equivalence in a technical and outcomes-based way and seek always to provide transparency and stability, because in doing that, we will cement our reputation as the best place to do financial services in the world.
Kevin Brennan (Cardiff West) (Lab)
I listened carefully to the Chancellor, and he announced a green curve, a landscape review, a call for evidence, a taskforce and, God help us, a road map. Where is the bold action that is needed on green jobs and green finance? What people want is not a technical discussion but the sort of initiative that will allow things such as the Swansea bay tidal lagoon to be developed. Is he just paralysed by Treasury orthodoxy, which killed that key green project?
Rishi Sunak
The hon. Gentleman asks about bold action on green measures. I have announced today that we will be the first major economy in the world to mandate the recommendations of the Task Force on Climate-Related Financial Disclosures, doing so across the economy by 2025. That demonstrates both boldness and leadership on this vital issue.
Robert Largan (High Peak) (Con)
Financial services are worth over £130 billion to the UK economy and support over 1 million jobs, two thirds of which are outside London, so I wholeheartedly welcome this statement. I also welcome the announcement on the sovereign green bonds. Can the Chancellor confirm that those bonds will fund crucial projects to tackle climate change, such as the restoration of the moorlands in the Peak district and vital infrastructure investment to improve public transport across the north of England?
Rishi Sunak
My hon. Friend is absolutely right. The transition to net zero will require enormous sums of capital to help finance it. Along with all the other market developments that it will catalyse, this bond will ensure that we can attract that capital into the UK to build the infrastructure we need.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
My hon. Friend the shadow Chancellor was right to raise the fact that this Government needlessly sold off the Green Investment Bank in 2017, because when the transition period ends and we cease to be part of the European Investment Bank, we will become the only country in Europe without a public investment bank. So can I ask the Chancellor: how does he propose to fill this gap in our green finance ambitions?
Rishi Sunak
I would urge the hon. Gentleman to wait for the imminent publication of the national infrastructure strategy, which will address that specific concern.
Rob Butler (Aylesbury) (Con)
Can I warmly welcome the announcement of a sovereign green bond, and may I congratulate my hon. Friend the Member for Grantham and Stamford (Gareth Davies) on his tireless campaigning on this issue? Can my right hon. Friend say whether he agrees with me that these green gilts will help tackle climate change and create green jobs in firms of all sizes, including the many micro-businesses in my constituency of Aylesbury?
Rishi Sunak
I think my hon. Friend is absolutely right. The transition to net zero will create enormous economic opportunity for companies large and small, and I know that he will champion his small businesses as they seek to benefit from it and help not just drive our recovery, but create jobs in his local area.
Christine Jardine (Edinburgh West) (LD)
The Chancellor mentioned that jobs are leaving London for the rest of the UK. I would point out that jobs are leaving the UK for Europe and assets are leaving at a frightening rate—£1.2 trillion. The announcement about the green gilts is welcome, but again it is too late. We had a Green Investment Bank in this country, and at that point we could claim to be ahead in the fight on climate change. So does the Chancellor appreciate why constituents such as mine in Edinburgh West, the second largest financial sector base in this country, are concerned that this Government simply are not on top of what is happening and up to date with what this country’s economy needs?
Rishi Sunak
What the financial services sector needs is a vision for the future that will ensure we remain the most competitive place to do financial services in the world, and the announcements that we have made today will ensure that that becomes a reality.
Jim Shannon (Strangford) (DUP)
Can I thank the Chancellor for his statement and for bringing very often to this Chamber some good news? He is absolutely right about the financial and professional services work outside London. In Belfast, there are some 24,000 jobs playing a very significant and key role. Therefore, all of the United Kingdom of Great Britain and Northern Ireland benefits. Bearing in mind the need for small and medium-sized enterprises to export their products and services to the global economy—and for that to happen and take place, financial services and banks must be regulated by the FCA in a more efficient way—could I ask the Chancellor to outline how this can be done and how it can be better achieved?
Rishi Sunak
I would point the hon. Gentleman to the phase 2 consultation that is currently outstanding of our future regulatory framework review. The key purpose of that review is to ensure that our regulatory regime, after we leave the transition period, is fit for purpose. It will take into account a wide range of inputs from stakeholders, and I would urge him and his small businesses to feed into it.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I particularly welcome the Chancellor’s recognition that our financial services are critical not only to our national interest, but to the long-term funding of our public services. Against that background and with a shared objective of maintaining the position of the sector in its pre-eminence, will he confirm that, while we have set out our own equivalence decisions, we will continue to seek, wherever possible, the closest agreement and alignment with the EU, which remains an important market, and that the door is not closed upon that; and, secondly, that as we develop the very welcome proposals for a new regime for listings, a new regime to deal with the investment funds and also with the overseas persons regime, he will not hesitate to draw on the very real expertise that exists—particularly in the City, but elsewhere—for example, through the International Regulatory Strategy Group and the Financial Markets Law Committee?
Rishi Sunak
My hon. Friend has long been a fantastic champion and advocate for this sector, and he is right to be so. I agree with him about the importance of making sure that our listings regime is as competitive as it can be to make sure that we attract companies to list here in London. I look forward to getting input from him and the bodies he mentioned in the forthcoming review that we have commissioned.
Joanna Cherry (Edinburgh South West) (SNP) [V]
Would the UK Government not be in a better position to deploy these bonds if they had not flogged off the Green Investment Bank, which is headquartered in my Edinburgh South West constituency? Will the Chancellor consider passing these bond-issuing powers to the devolved Governments so that they can be put to best effect in facilitating low-carbon developments across the United Kingdom?
Rishi Sunak
Sovereign gilt issues will remain a reserved competency, but one of our hopes is that creating a sovereign green bond market will catalyse a domestic green bond market, as we have seen elsewhere, which would provide a benchmark for private companies to issue private green credit. I hope that will provide more capital for more companies in every part of the UK.
Nigel Mills (Amber Valley) (Con) [V]
I thank the Chancellor for his statement. Does he agree that our financial system should also be the cleanest in the world and free from dirty criminal and corrupt money? Would he look further at the failure to prevent economic crime across our financial sector?
Rishi Sunak
My hon. Friend has focused on that issue for as long as I have been in this House—and rightly so. He will know that we passed the Sanctions and Anti-Money Laundering Act 2018 the year before last, and in the Budget we said we would consult on introducing an economic crime levy that would provide additional funds to combat the scourge of crime in our financial system. My hon. Friend the Economic Secretary will be outlining further measures on market abuse in the debate on the Financial Services Bill.
Alison McGovern (Wirral South) (Lab)
We do not see very much of the Chancellor of the Exchequer in this place. I wonder what it could possibly be about the Monday after the electoral routing of populism in the USA over the weekend that makes him want to come to the Dispatch Box and speak about climate change. Never mind the good management of his reputation, his Government cannot escape the consequences of Brexit and the lack of the deal that was promised for financial services. Given the shape of the UK’s economy, the consequences will be far worse for those workers that we keep talking about who are in financial services outside London and in other regions. Will he confirm what he believes will be the relative regional impact of the current state of the Brexit negotiations? What is his policy to stop Brexit making regional inequality even worse?
Rishi Sunak
It would not be right for me to give a day-by-day commentary on the negotiations. As we heard from the Prime Minister at the weekend, we have made significant progress. Those talks are ongoing and it is clear that a deal can be done, but it will require both sides to act constructively. We remain ready to do that and are working hard at it.
Nickie Aiken (Cities of London and Westminster) (Con)
I welcome my right hon. Friend’s statement. Yet another statement—he seems to be here more often than not. Although I recognise that two thirds of the 1 million-plus jobs that the financial services industry supports are outside London, it is the City of London, in my constituency of Cities of London and Westminster, that is the heart of financial services in this country and supports those jobs across the UK. What further measures will the Government take post transition to ensure that the UK maintains and enhances its global competitiveness in the financial services sector?
Rishi Sunak
My hon. Friend is rightly proud of this industry, given her constituency, and she is right that we should not rest on our laurels. We may be world beating today, but we want to remain the most competitive place to do business. The initiatives that we have launched today, for example the listing reform, which was mentioned, the investment funds regime reform, or Solvency II, will provide opportunities for us to tweak and flex our regulation going forward, and attract capital and business so that the industry can continue to grow and go from strength to strength.
Stella Creasy (Walthamstow) (Lab/Co-op) [V]
Citizens Advice tells us that 6 million of our constituents have already fallen behind on a bill during the pandemic. One group exploiting the FinTech explosion that the Chancellor is talking about are the legal loan sharks of the credit sector. In the last financial crisis, the coalition Government waited too long to act and the Wongas of this world ripped off millions of our constituents, yet someone is now better protected if they take out a payday loan than credit card debt, because at least the interest rate is capped. As millions of our constituents face a terrible Christmas, will the Chancellor please learn the lessons of the last financial crisis when dealing with the financial sector? Will he please bring in a cap on the cost of all credit, so that we make sure that some of these new FinTechs—the buy now, pay laters of this world—are not the kinds of financial companies that we get coming to our shores to exploit our constituents yet again?
Rishi Sunak
I know the hon. Lady has spent an enormous amount of time in this Chamber focused on these issues, and rightly so. The FCA is currently taking action to address the issues in the buy now, pay later sector, but more generally to her important question around debt and consumer credit, it is worth bearing in mind that we have provided around £38 million to debt providers this financial year, bringing the total to £100 million. Colleagues will know that from May next year, the breathing space initiative that was recently passed in this place will provide a period for individuals who are struggling with debt issues to take a pause and agree a repayment plan. Indeed, in the Bill we are considering later, the Economic Secretary to the Treasury, my hon. Friend the Member for Salisbury (John Glen) will be introducing provisions for statutory debt repayment plans, which will further help those who are struggling paying back credit.
Rehman Chishti (Gillingham and Rainham) (Con) [V]
I thank the Chancellor for the statement and all the financial support he has given to my constituents in Gillingham and Rainham during covid-19. My question is specifically in regard to the work of the Financial Ombudsman Service and the six-month statute of limitation when dealing with complaints, as raised with me by a constituent in Gillingham and as faced by constituents around the country. With all other ombudsmen, such as the Parliamentary and Health Service Ombudsman, there is a 12-month statute of limitation. Can the Chancellor explain that discrepancy? Will he be kind enough to take the matter away on behalf of my constituent in Gillingham and look at this anomaly in the interests of fairness?
Rishi Sunak
I am very happy to take the issue away, and I look forward to discussing it further with my hon. Friend on behalf of his constituents.
Richard Thomson (Gordon) (SNP)
I have to say to the Chancellor that his announcement this afternoon will do little to stem the haemorrhaging of jobs and assets that we have seen since the failure so far of his Government’s negotiations on Brexit. Earlier in the year, Germany announced a £46 billion investment in the green economy to stimulate recovery. How will the Chancellor’s sovereign green bond attempt to match that? What discussions has he had or does he intend to have with the devolved Administrations around these islands to discuss how the proceeds of any such bond issue might usefully be put to work?
Rishi Sunak
I point the hon. Gentleman to our Budget in March, where we set out a sense of the capital plans for the next few years. What he will see there are plans to spend more than £600 billion in capital investment in this country over the next five years, raising capital investment to the highest sustained level it has seen in almost half a century.
Craig Whittaker (Calder Valley) (Con) [V]
I thank my right hon. Friend for his statement. Many of the three quarters of a million jobs outside London in the financial services sector are located in places such as West Yorkshire, and in particular in Calderdale. Does he agree that keeping the UK at the forefront of financial services regulations and supporting an open and dynamic economy is the surest way to ensure we remain a competitive economy as we emerge from the coronavirus pandemic?
Rishi Sunak
My hon. Friend is absolutely right. As we seek to drive our economic recovery from coronavirus, financial services can play a key part in that. Critical in ensuring that is making sure we remain an open and, as he said, dynamic place that adapts to what is changing, and that is indeed what all our measures today will ensure happens.
Chris Bryant (Rhondda) (Lab)
The great success of the financial services industry in this country sometimes means that it is also vulnerable to threats from other people around the world who want to launder money through the British system. It is good that we now have a beneficial ownership register, but the threshold for that is 25%, which is quite high—higher than some other countries. Lots of companies are granted exemptions by Government Ministers from having to show their real beneficial ownership, and Companies House has next to no resources with which to investigate whether what it is being told by individual companies is actually true. Is it now time for us to launch a further effort to tackle money laundering? Would it be good if the Government were able to say, as soon as possible, that the overseas territories, which are part of this country’s financial services institutions, were also making their beneficial ownership registers publicly available?
Rishi Sunak
The hon. Gentleman is right that this important issue deserves our focus, and I am pleased that in its independent review the year before last, the Financial Action Task Force judged the UK to be one of the best regimes in the world for tackling money laundering. The hon. Gentleman will know that there is an outstanding consultation on a review of the Companies House regime, and I look forward to hearing his thoughts on what we should do to take that forward.
Joy Morrissey (Beaconsfield) (Con)
I thank my right hon. Friend for updating the House with his statement, and for the plethora of statements that he has offered to the House. I also remind Opposition Members that this is not a UK crisis; this is a world crisis, it is a pandemic. I thank my right hon. Friend for everything that he has done to help those in the financial sector and the green economy. Many people in Beaconsfield work in both those sectors. Will he outline to the House how green finance can be used to build back the UK economy post-coronavirus, as well as meeting our climate change commitments and delivering a greener economy?
Rishi Sunak
I thank my hon. Friend her for her warm comments. She is right to say that we need that finance to develop new technologies, which have helped to meet our climate ambitions. To give a couple of examples, we can be a world leader in carbon capture and storage, and similarly for offshore wind—those are the kinds of investments that will need extra financing to help develop those technologies, or further their export capabilities, and that is exactly the type of investment that this new capital will help to fund.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I confess I was surprised to hear the Chancellor say that he was grateful to the people who are keeping local bank branches open. I now have seven towns in my constituency with no bank, and only three that do have access to a local bank—it is surely the hardest hit in the UK. If he really wants to help people to keep bank branches open, when will he do more to ensure and help facilitate banking hubs in my constituency of North Ayrshire and Arran, and across Scotland?
Rishi Sunak
The hon. Lady will have heard my previous answer about our plans to take forward initiatives on access to cash, and protecting it. The outstanding consultation will conclude shortly, and then we will decide on a future legislative strategy.
Alec Shelbrooke (Elmet and Rothwell) (Con)
My right hon. Friend has put in unprecedented help to people during this crisis, but tragically in my constituency almost 2,000 people have lost their jobs. Does he agree that, as he said in his statement, Leeds is a key financial hub in this country, and many of my constituents, if not employed directly in the financial services industry, are part of the support network around it? Does he also agree that the green bonds that come out will trickle down to small manufacturers, of which I have a plethora in my constituency? Will he push ahead with great speed on that, and how quickly does he think that he can get this recovery? What I have heard from him today, quite frankly, has been, “jobs, jobs, jobs.”
Rishi Sunak
My hon. Friend is right about the importance of Leeds to our financial services ecosystem in the UK, and about the importance of that industry to jobs in his local economy. We are keen to see the industry prosper across the country, in his constituency and elsewhere, and one thing that might be of interest to his constituents is the review that we are launching into the UK funds regime. That review will specifically consider whether, and how, fund domicile activity could be focused in specific UK areas to support our levelling-up agenda. I look forward to hearing my hon. Friend’s contributions to that, and I know that the industry in his area will continue to grow locally from strength to strength.
Charlotte Nichols (Warrington North) (Lab)
The pandemic has accelerated the decline in the use of cash across the country, but there are still 8 million people who say that it is an economic necessity, and many others who are employed in the cash industry, including in Warrington North. According to the National Audit Office, the Bank of England does not know the whereabouts of around two-thirds of known currency—about £50 billion —which may be in the shadow economy. Does that show the need for a comprehensive plan for cash?
Rishi Sunak
My hon. Friend the Economic Secretary is absolutely abreast of the issue and has been for a while, which is why we have a strategy around protecting access to cash. We announced an intention to consult and potentially legislate at Budget. The consultation is outstanding, and I would very much welcome the hon. Lady’s comments, because she is right: although the economy is transitioning in a digital way, we need to protect access to cash for those who need it.
Andrew Griffith (Arundel and South Downs) (Con) [V]
I congratulate my right hon. Friend on becoming the climate change Chancellor. Does he agree that private sector businesses and investors are fundamental to achieving our target of net zero? Only they have the capacity to innovate, to make changes in the supply chain and to generate the prosperity that will make the choices we make as consumers and citizens much easier to accomplish.
Rishi Sunak
As my hon. Friend knows well from his own private sector experience, we absolutely need to attract private capital alongside public capital to deliver on all our ambitions. That is why a sovereign bond is so important—it can help to catalyse a domestic private sector industry for corporates and other institutions that issue on the back of a Government issuance. All of that will leverage private sector capital and expertise to build the infrastructure that we need.
Geraint Davies (Swansea West) (Lab/Co-op) [V]
Talking of private capital, Barclays has moved €200 billion out of the UK—€3,000 per person; J.P. Morgan has moved €200 billion out of the UK; HSBC has moved 1,000 jobs to Paris; the Government have abolished the Green Investment Bank; and we are leaving the European Investment Bank. If the Chancellor is serious about investment in green infrastructure, will he look at the Development Bank of Wales as a mechanism for focusing on green infrastructure in a knowledgeable way, as happened with the Swansea Bay tidal lagoon, so that taxpayers’ money can be deployed effectively to grow and green our economy?
Rishi Sunak
Last year, we had the infrastructure financing review, which contemplated these specific questions. We will issue a response alongside the national infrastructure strategy, which I think will adequately address the hon. Gentleman’s questions.
Dr James Davies (Vale of Clwyd) (Con)
I very much welcome my right hon. Friend’s statement, particularly in terms of the issuing of green gilts. Will he confirm that the benefits of the sovereign green bond will be available alongside revenue support mechanisms to support hydrogen production and carbon capture and storage, as exemplified by the HyNet project for north-west England and north-east Wales?
Rishi Sunak
Without commenting on specific projects, I think my hon. Friend is right to highlight some of the areas of interest to the Government. On carbon capture and storage, he will that know we have already outlined over £800 million of investment over the next few years to help develop two carbon capture and storage clusters with the private sector. This is something the UK can be world-leading on, and it is important that we move quickly.
Dame Diana Johnson (Kingston upon Hull North) (Lab) [V]
As the shadow Chancellor pointed out in her excellent remarks, the United Kingdom, under successive Tory Governments over the past decade, has pumped £6 billion into climate-damaging fossil fuel projects overseas via UK Export Finance. Will the Chancellor now commit to ban this activity immediately and make it a priority to invest in British green energy industries in places such as the Humber estuary and to create the future jobs we need for a real green northern powerhouse?
Rishi Sunak
The hon. Lady will know the importance of offshore wind in her area, and she will have welcomed the Prime Minister’s announcements for that sector, including the increase in the amount of domestically manufactured content as we look to build on our advantage as a user of offshore wind to make sure that we also build an advantage in manufacturing the turbines. That is exactly what the hon. Lady is asking for, and this Government are in the process of delivering it.
Bim Afolami (Hitchin and Harpenden) (Con)
I welcome the Chancellor’s statement, which foreshadows a huge increase in powers for the Financial Conduct Authority and a huge increase in the amount of legislation and regulations that will come through this House. What thought has the Chancellor given to establishing a specialist financial services Select Committee of this House, perhaps with some oversight capacity, so that we can manage this huge influx of legislation and regulations once we get out of the transition period on 1 January?
Rishi Sunak
It is not for me to suggest that the Treasury Committee needs something else to do, but my hon. Friend is right that there will be a change in the regulatory alignment after leaving the transition period, which is why our future regulatory framework review is so important. We are just embarking on phase II of that. It will consider the right balance between Government, Parliament and the regulators. That is the appropriate place for him to feed in his thoughts on how we can get that balance right.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
In answer to the hon. and learned Member for Edinburgh South West (Joanna Cherry) earlier, why did the Chancellor rule out allowing the devolved Governments to issue their own green bonds? Surely that would be one way to help the Welsh Government directly fund the Swansea Bay tidal lagoon project, considering that the Treasury views the contract for difference model to be too costly.
Rishi Sunak
Obviously the Welsh Government will make their own decisions on supporting their own local economy. The issuance of sovereign bonds is obviously a reserved capability and it is appropriate that it remains that way.
Neil O’Brien (Harborough) (Con)
Short-termism in financing public companies has long been a concern in the UK, so I welcome the measures my right hon. Friend is taking today, which build on the work of the patient capital taskforce. I welcome the review of Solvency II, which is potentially deterring long-term investment, and I welcome the long-term asset fund, too. Will my right hon. Friend set out what he hopes it will achieve and what metrics he will use to assess whether it is working or not?
Rishi Sunak
My hon. Friend is absolutely right. To give him a sense of what we are trying to achieve, we know that today defined-contribution pension schemes in particular are not particularly well invested in long-term illiquid instruments—roughly 1% of their portfolios compared with about 10% for defined benefit schemes. If we can unlock that difference it is worth tens and tens of billions of pounds of extra investment in long-term infrastructure and assets in this country. I think that is a valuable prize and we will make a start on making that a reality next year.
Peter Kyle (Hove) (Lab)
I join the shadow Chancellor in celebrating the success and importance of the financial services sector in our country. The Chancellor said he was making a unilateral announcement about equivalence, so can he confirm that the British financial services sector now has to wait for the EU to make its unilateral announcement on equivalence and other measures that will dictate what is possible in terms of access for British businesses? The Government signed the political declaration that committed them to finding the agreement by June last year. If British business was as good as this Government at doing deals, there would be no financial sector in this country.
Rishi Sunak
Maybe I can help clear this up for the hon. Gentleman. There are a set of decisions that we can make unilaterally. There are others that we cannot, because the nature of the decision requires mutual collaboration between us and the other partner. We have obviously refrained from making those decisions. We have also refrained from making decisions where it would not be in our economic self-interest to do so. But we remain ready, and we stand ready, to talk constructively and co-operatively with our European partners and reach agreement on the remaining outstanding decisions.
Mrs Heather Wheeler (South Derbyshire) (Con) [V]
I thank my right hon. Friend for his statement. I strongly welcome the new sovereign green bond, an idea I have been promoting for many months, especially in the far east. Can he explain how he will ensure that the projects invested in are suitable projects?
Rishi Sunak
I pay tribute to my hon. Friend’s campaigning on this important issue. She asks the right question to make sure the money is going where we want it to go. I can give her the reassurance that we will be using the use of proceeds structure, along with the principles from the International Capital Market Association. That is the most widely used and recognised structure in the ESG—environmental, social and governance—investing space, and it is the structure that is used by pretty much all other sovereign issuers. It will ensure that the money raised goes where it is required and deserves to go.
Mike Amesbury (Weaver Vale) (Lab)
Credit unions have been a lifeline for many people in local communities during the pandemic. What steps is the Chancellor taking to support credit unions and the mutual sector in terms of growth?
Rishi Sunak
The hon. Gentleman is absolutely right about the importance of credit unions in providing credit to those who need it. My hon. Friend the Economic Secretary recently hosted a roundtable to make sure the industry is getting the support it requires.
Ben Lake (Ceredigion) (PC)
The announcement of a sovereign green bond is to be welcomed as an important step forward in the financing of infrastructure and industry, and is essential to achieving net zero, but what sort of access will the Welsh Government have to this important source of green finance to ensure that projects and priorities that fall within its remit are adequately supported, given that the Chancellor seems to have ruled out empowering the Welsh Government to issue their own green bond?
Rishi Sunak
The UK Government issue UK debt. Where spending has a Barnett implication, the money is provided to the Welsh Government. The sovereign bond is just a way of financing the expenditure of the United Kingdom. The Barnett consequentials will always be provided if and when the appropriate expenditure is made, for the Welsh Government to use as they see fit.
Gareth Davies (Grantham and Stamford) (Con)
I warmly welcome the statement today, particularly on the issuance of green gilts, which is a great idea. Does my right hon. Friend agree with me that the issuance of a green gilt marks a great opportunity to showcase Britain’s place in the world in terms of our financial services power to move towards net zero by 2050?
Rishi Sunak
I pay enormous tribute to my hon. Friend, who has campaigned tirelessly, written tirelessly and advocated tirelessly for many years for the UK to issue a sovereign green bond, and I know he will be heartened by the announcement today. He is absolutely right, and he knows better than most what a signal this will send across the world of our desire to be a global leader in green finance and to deliver on all our ambitions. I know he will pay a key part in making sure that we do.
Patrick Grady (Glasgow North) (SNP)
The Chancellor seems to be either deaf to or in denial about some of what Opposition Members are saying to him today. EY has calculated that over £1 trillion of assets are being moved out of the UK to the EU as a result of Brexit. Does he accept that? Is he proud of it? Does he think it is a price worth paying for Brexit? Does he seriously think that what he is announcing today will mitigate that somehow?
Rishi Sunak
What we are announcing today will ensure that the UK remains the most open, competitive, technology-leaning and dynamic place to do financial services anywhere in the world. It is a constantly changing industry and it is right that we are on the cutting edge of developments. Now that we are outside the EU and leaving the transition period, we have the ability to make further changes to our regulatory regime, to enhance our competitiveness and to attract jobs, capital and business to the UK.
Richard Fuller (North East Bedfordshire) (Con)
Regarding the comment made by the hon. Member for Wirral South (Alison McGovern), I do not know where Labour MPs have been these past few weeks, but the Chancellor has been here today, 9 November, and on 5 November, on 22 October, on 20 October, on 14 October, on 24 September and on 15 September. No Chancellor has been more responsive to the needs of Members of Parliament than this Chancellor, which is why I welcome his statement today. It demonstrates that neither the financial services sector nor he as UK Chancellor are going to sit around and wait for the EU to respond, but that he will point the way forward in leadership in green finance, in financial technology and in financial transparency. Will my right hon. Friend build on the green sovereign bond announced today, so that ahead of COP26 retail investments will be available for retail investors?
Rishi Sunak
I thank my hon. Friend for his question. He will know from his extensive experience in financial services how important the announcements today are. He makes a very interesting suggestion, and I would love to meet him to discuss it further and see what we can do.
Madam Deputy Speaker (Dame Rosie Winterton)
Thank you. We will have a three-minute suspension to allow the safe exit and entry of right hon. and hon. Members.
Economy Update
Rishi Sunak Excerpts(4 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
On Monday, the Prime Minister set out the action we need to take between now and the start of December to control the spread of coronavirus. In response, we are providing significant extra support to protect jobs and livelihoods in every region and nation of the United Kingdom: an extension to the coronavirus job retention scheme; more generous support to the self-employed and paying that support more quickly; cash grants of up to £3,000 per month for businesses that are closed, worth over a billion pounds every month; £1.6 billion for English councils to support their local economy and local healthcare response; longer to apply for our loan schemes and the future fund; the chance to top up bounce back loans; and an extension to mortgage payment holidays. That is all on top of more than £200 billion of fiscal support since March.
This statement follows the Bank of England’s monetary policy decisions earlier today, meaning all economic and monetary institutions are playing their part. As the House would expect, the Governor and I are in constant communication as the situation evolves. Our responses are carefully designed to complement each other and provide certainty and support to people and businesses across the UK. The Bank’s forecast this morning shows that economic activity is supported by our substantial fiscal and monetary policy action. Just last week, the International Monetary Fund described the UK’s economic plan as “aggressive”, “unprecedented”, successful in “holding down unemployment” and business failures, and
“one of the best examples of coordinated action globally”.
Our highest priority remains the same: to protect jobs and livelihoods. That is why we have already decided to extend the job retention scheme to December. But people and businesses will want to know what comes next, how long we plan to keep the scheme open, and on what terms. They want certainty. The Government’s intention is for the new health restrictions to remain only until the start of December, but, as we saw from the first lockdown, the economic effects are much longer lasting for businesses and areas than the duration of any restrictions. As the Bank of England has said this morning, the economic recovery has slowed and the economic risks are “skewed to the downside.”
Given this significant uncertainty, a worsening economic backdrop and the need to give people and businesses security through the winter, I believe it is right to go further, so we can announce today that the furlough scheme will not be extended for one month; it will be extended until the end of March. The Government will continue to help to pay people’s wages up to 80% of the normal amount; all that employers will have to pay for hours not worked is the cost of employer national insurance contributions and pension contributions. We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Of course, as the furlough itself is now being extended to the end of March, the original purpose of the job retention bonus to incentivise employers to keep people in work until the end of January obviously falls away. Instead, we will redeploy a retention incentive at the appropriate time. For self-employed people, I can confirm that the next income support grant, which covers the period November to January, will now increase to 80% of average profits, up to £7,500.
I also want to reassure the people of Scotland, Wales and Northern Ireland. The furlough scheme was designed and delivered by the Government of the United Kingdom, on behalf of all the people of the United Kingdom, wherever they live. That has been the case since March, it is the case now and it will remain the case until next March. It is a demonstration of the strength of the Union and an undeniable truth of this crisis that we have been able to provide this level of economic support only because we are a United Kingdom. I can announce today that the up-front guaranteed funding for the devolved Administrations is increasing from £14 billion to £16 billion. This Treasury is, has been and will always be the Treasury for the whole of the United Kingdom.
I know that people watching at home will have been frustrated by the changes that the Government have brought in during the past few weeks. I have had to make rapid adjustments to our economic plans as the spread of the virus has accelerated. I would like to take this opportunity to explain how and why this has happened. During the summer, as we began slowly unlocking, it was our hope that the country would continue to be economically open, albeit with local restrictions being put in place as and when needed. We knew that there would likely be a resurgence in the spread of the virus, but with increased NHS capacity and test and trace, our belief was that we would be able to stay ahead of the virus. On that basis, we designed an economic approach that continued to provide wage support to people, incentivised businesses to retain staff beyond the end of the furlough scheme, and created new job-creation and training schemes such as kickstart, all built to support an economy that was broadly open but operating with restrictions and overall lower demand. At the time, this approach was not Government acting alone. Our proposals secured wide-ranging support, from the TUC to the CBI. It was their hope, as it was ours, that the public health situation would allow us to keep businesses and workplaces open.
The virus, however, continued to spread. Localised restrictions were having an impact, so we intensified this approach and added further areas. As these restrictions intensified, the economic impact, particularly on industries such as the hospitality sector, was significant, so in response we altered our approach to wage support, making it much more generous to employers and in turn protecting jobs. We also introduced a range of grants to businesses, whether open or closed, to help them meet their fixed costs, and additional funding for local authorities to respond to specific local economic challenges.
But again, the virus continued to spread, but more quickly, and so we arrive at last week, when the Government’s scientific and medical advisers presented data which showed that R is greater than 1 in all parts of the country, that the NHS was at risk of being overwhelmed in a matter of weeks and the likely resultant loss of life that would accompany such an event. The only viable solution left to protect our NHS was the reimposition of temporary significant enhanced restrictions in England, in addition to those in Wales, Northern Ireland and Scotland. So given these changed public health restrictions and the economic trauma they would cause in job losses and business closures, I felt it best to extend the furlough scheme rather than transition at that precise moment to the new job support scheme.
Political opponents have chosen to attack the Government for trying to keep the economy functioning and to make sure the support we provide encourages people to keep working. They will now no doubt criticise the Government on the basis that we have had to change our approach, but to anyone in the real world that is just the thing you have to do when the circumstances change. We all hope for the best but make sure we plan for any eventuality. We can reintroduce the furlough now only because we kept the system on which it is based operational, because there was always the possibility that we would be back in this situation. I will leave it to the people of this country to decide whether they believe the Government are trying our best to support people through an unprecedented crisis, to decide whether it is a good or bad thing to alter our economic plans as the health restrictions we face change.
What I know is that the support we are providing will protect millions of jobs. What I know is that it is never wrong to convey confidence in this country and our economy through our words and action. And what I know is that today’s announcement will give people and businesses up and down our country immense comfort over what will be a difficult winter. I commend this statement to the House.
Rishi Sunak
I thank the hon. Lady for her questions. The claim that our action was too late is, in the words of the Government’s own medical advisers, a misapprehension, because there is no perfect moment at which to enact measures that have far-reaching and damaging consequences for the people and businesses of our country. We should only enact such measures when it becomes truly unavoidable. It is also entirely false of Labour Members to claim that things would somehow be different if only we did what they suggested, because they could not actually explain what their position was. At first, it was a circuit breaker for two weeks. Then it was an intervention that might last longer—I think yesterday we heard three weeks—and then it was something that would need to be reimposed again and again and again. That is not a plan that would support the businesses and people of this country.
The hon. Lady asked about the NHS. We have provided the NHS with tens of billions of pounds to ensure that they can do the very valuable job that they are doing, and they will have our full support over this difficult winter period. She asked about support for local authorities. We have provided just over £1 billion to give local authorities the ability to support their local businesses and economies through the winter period, on top of the direct support that those closed businesses will receive. She also asked about supporting local track and trace efforts. I agree that that is important, which is why we have provided, on a transparent funding formula, almost half a billion pounds to local authorities to ensure that they can carry out enforcement, compliance and local contact tracing at the level that they need.
The hon. Lady called for a six-month plan, yet she and her party have not put forward a six-month plan of their own, and I understand why. It is because they know—as most Members of this House, and most people and businesses in the country, know—that we are dealing with a once-in-a-century event. They know—as most Members of this House, and people and businesses up and down the country, know—that in the face of such an unprecedented crisis, the Government must be flexible to ever-changing circumstances. It is not a weakness to be agile and fast moving in the face of a crisis, but rather a strength; and that will not change.
Mel Stride (Central Devon) (Con) [V]
I agree with my right hon. Friend that taking an iterative approach to these problems as circumstances change is a strength rather than a weakness, but may I just focus for a moment on the lockdown itself? As my right hon. Friend will know, the minutes of the SAGE meeting held on 21 September stated:
“Policy makers will need to consider analysis of economic impacts and the associated harms alongside this epidemiological assessment. This work is underway under the auspices of the Chief Economist.”
My right hon. Friend knows that I wrote to him asking that the analysis referred to in those minutes be provided prior to the vote on lockdown that was held in the House yesterday, as this would have helped to inform that debate. The reply that I received did not provide the information requested, so will he confirm that the SAGE minutes are accurate when they state that the Treasury has worked on this analysis under the auspices of its chief economist? If they are accurate, will he confirm that the Treasury will release this analysis without delay?
Rishi Sunak
My right hon. Friend will know that I replied to him and his Committee with the answers to his question. There does not exist a specific prediction or forecast, which I think is what he is asking, but what we did provide—and the economic evidence that we considered—was the context for the lockdown being imposed and the impact that the initial lockdown has already had so one could make their own assumptions about what would happen thereafter.
My right hon. Friend will know as well as I do that the Office for Budget Responsibility is one of our pre-eminent forecasters, and it is already forecasting that the economy will fall by about 10% this year, that unemployment will reach 12%—an increase of 2.5 million people—and that in the medium term our economy will suffer scarring of about 3%, which represents tens of billions of pounds of less economic output. He will, of course, also know the impact that this is having on our public finances. That is the situation as it exists today, before we enter the new set of restrictions, which will obviously cause additional stress on all the numbers that I have outlined to him, and he will have seen the Bank of England’s comments this morning that the duration of further restrictions will increase their impact of long-term scarring on the economy.
Alison Thewliss (Glasgow Central) (SNP) [V]
I am tempted to read out the comments I made on Tuesday, or indeed any of the contributions I have made in the past six months, because it feels like I have been arguing for exactly the same things from the UK Government all this time. The reality is that Scotland, Wales, Northern Ireland and the north of England have been dingied by this Chancellor until he was forced to lock down in England. I am glad that furlough and the self-employment support scheme has been extended to March, but we should be clear that that kind of support is not unique to the UK. Countries of all sizes have been supporting their people, and many of them have done it more competently and more generously than the UK. Can he confirm that the furlough scheme is not tied to any particular tier and it will be available to all who need it at 80%? Will he refrain from cutting it back to 60%, as before, because that cost many businesses and many employees dearly? Many businesses are as good as closed, especially in hospitality, tourism, travel, events and culture, and they need ongoing support.
I return to the issue of those excluded from the support schemes. It is disgraceful and unacceptable that there is still nothing in the statement for them after eight months. Can the Chancellor tell me why he is still choosing to ignore 3 million people across these islands? Many sectors of the economy in which they work are not going back to normal any time soon. I spoke to Scottish hospitality reps this morning and they are deeply worried about the winter months ahead. They are increasingly indebted, and 70,000 to 100,000 jobs are at risk. It would help them immensely if the VAT cuts that the Chancellor previously announced could be made permanent. I welcome the additional £2 billion for Scotland, because Scotland has been able to provide hospitality businesses with rates relief, but we need clarity on the future longer-term funding to plan ahead.
A growing number of businesses cannot afford to pay for redundancies should they go bust, so what provision is the Chancellor making for supporting those who may yet lose their jobs as businesses go to the wall? Will he extend the £20 uprating of universal credit into the year ahead as well? Will he expand it to legacy benefits, because those on legacy benefits are really struggling? Will he enhance statutory sick pay? Will he listen to Maternity Action and Pregnant Then Screwed on their demands for women to be kept safe and their incomes protected?
This has been a complete bùrach, but it does not need to be. Will the Chancellor work with all parties and the devolved institutions? At the very least, could he give the Cabinet Secretary for Finance in Scotland, Kate Forbes, the courtesy of a phone call?
Rishi Sunak
I am glad the hon. Lady welcomed the extension of job support through to next year. With regards to Scotland, it is clear, as even the First Minister has conceded, that the generous support currently available in Scotland is only possible and affordable because we have a Treasury that represents the whole of the United Kingdom. I can, of course, confirm that the coronavirus job retention scheme is a UK-wide scheme. We will continue to apply the furlough to each part of the UK equally, treating every citizen, no matter which region of the nation they live in, the same.
The hon. Lady also asked some specific questions and I am happy to provide her with the answers. Scotland will receive an upfront guarantee today worth £8 billion. That is an increase of £1 billion on the previously agreed upfront guarantee. That funding is for the Scottish Government to use as they see fit. The hon. Lady asked many questions about supporting businesses and people. It is, of course, up to the Scottish Government to make those choices on what to do with their extra £1 billion. We look forward to hearing what they plan to do with that additional funding. It is also worth bearing in mind, as we hear from the hon. Lady about the future Scottish Budget, that the Scottish Government have the ability to raise taxes. The Scottish Government have the ability to raise the funds they need to fund the various projects they would like to fund. If those things are important, then of course the Scottish Government will be able to make those decisions on behalf of their people and be held accountable for them.
Dr Liam Fox (North Somerset) (Con)
I thank my right hon. Friend for demonstrating the strength of the Union and showing that, with the best will in the world, the Scottish Government would not have the ability to have the resources to protect Scottish jobs in this way. Is it not now more important than ever that, across the whole of the United Kingdom, we stimulate wealth creation, creating new goods and services using the natural creativity and innovation of all the people of the United Kingdom? Can we look forward to my right hon. Friend using his considerable energy to bring forward proposals in this area based on sound, financially prudent Conservative principles?
Rishi Sunak
I thank my right hon. Friend for his comments and I absolutely agree. He knows better than most the power of the Union and has seen it demonstrated countless times over the years of his service. He is also right about the power of free enterprise to drive our recovery. I can give him every reassurance that those sound free enterprise principles will be at the heart of everything we do, and ensure that we have a swift and generous recovery that will benefit citizens wherever they live.
Margaret Greenwood (Wirral West) (Lab) [V]
The Chancellor’s U-turn on furlough comes after intense lobbying by the TUC, the CBI, Labour and leaders in the Liverpool city region. Can the Chancellor explain why workers in the north were expected to get by on 67% of their pre-crisis wages when tier 3 restrictions were put in place, but that that has now changed to 80% once areas in the south of the country are being locked down? Will he give a cast-iron guarantee to the people of Wirral West that workers in the north will never again be treated as second-class citizens?
Rishi Sunak
It is simply not the case that the wage support schemes we have put in place differentiate between people on the basis of where they live. All the schemes, whether the furlough scheme or the job support scheme, treat people equally wherever they live in every region or nation of the UK. To suggest otherwise is simply wrong and, quite frankly, a misrepresentation of what the hon. Lady knows to be the case. She mentions the TUC, and the TUC welcomes the introduction of the job support scheme, and I am grateful for its help in designing it.
Harriett Baldwin (West Worcestershire) (Con)
Last week, the IMF singled out for praise the UK’s economic response to the coronavirus, citing the timeliness, the speed of response, the generosity and the flexibility of the approach. The managing director said:
“We welcome the continuing efforts the government has made to refine its support measures”.
Does my right hon. Friend also agree with the second part of what the IMF said last week, which is that over the medium to long term, we do need to put the UK public finances back on a sustainable footing?
Rishi Sunak
My hon. Friend is absolutely right, and she will of course know this well from her own experience. We welcome the independent scrutiny of institutions such as the IMF—they are helpful in providing accountability for the Government in our economic response—and I am delighted that it was so positive about what we have done. She is also right that it said, correctly, that over the medium term, we must restore public finances to a sustainable position. Now is the time to provide fiscal support through a very weak period, but we want to build resilience for future crises so that when the next one of these comes along, we can respond in the same strong and generous way that we have been able to do this time.
Alex Davies-Jones (Pontypridd) (Lab) [V]
I am pleased to see the Chancellor finally in his place today, but for constituents of mine in Pontypridd and for everyone across Wales, his words are a case of too little, too late. I am aware that the UK Government have confirmed that devolved Administrations will receive Barnett consequentials in respect of new funding. However, I know from experience that people in Wales cannot and should not rely on yet another promise from this UK Government. The Chancellor will also be aware that this is not the first time funding has been promised to the people of Pontypridd. I would like to take this opportunity to remind him of the devastating flooding that decimated communities across Rhondda Cynon Taf earlier this year, and it would be most irresponsible of this Government and utterly unfair for people in Wales if they are left behind once again. This Government have already blocked the Welsh Government from using both the coronavirus job retention scheme and the job support scheme, and businesses in Wales are suffering now. Will the Chancellor therefore finally commit to fair funding for people in Wales, and will he agree to meet me and fellow MPs who represent Rhondda Cynon Taf to allow our constituents the best possible chance as we move through the coronavirus pandemic?
Rishi Sunak
I am glad that over 10,000 of the hon. Lady’s constituents have had their jobs supported by the furlough scheme the UK Government have provided. I am also glad that the Welsh Government will now have received £5 billion in up-front funding guarantees for Barnett—£600 million more as a result of announcements today—and I am sure she can talk to the Welsh Government about how they plan to use that money to support her constituents.
Greg Smith (Buckingham) (Con)
I warmly welcome my right hon. Friend’s statement on measures that will both protect jobs and livelihoods through this lockdown and give businesses, as they plan for 2021 and beyond, real hope and confidence that there are better days ahead. With that in mind, does he agree with me and the Bank of England, with its forecasts this morning showing that economic activity in the UK is being supported by our substantial fiscal and monetary policy action, and its assessment that the extended coronavirus job retention scheme will mitigate significantly the impact of weaker economic activity in the labour market?
Rishi Sunak
My hon. Friend is absolutely right. It is important for monetary and fiscal policy to be co-ordinated well, as he says, and I am glad that we are achieving that. It is also good to see the Bank of England recognising, as the IMF and the Office for Budget Responsibility have also highlighted, that our interventions in the labour market—our furlough scheme and other measures—have succeeded in suppressing the rise of unemployment. That will remain a single overriding goal: to keep people in work.
Christine Jardine (Edinburgh West) (LD) [V]
The Chancellor told us in his statement that people and businesses want to know what comes next and how long we plan to keep the scheme open and on what terms. He said that they want certainty. They certainly do, and that is why businesses and individuals in my constituency and across this country are so tired of this constant chop and change. Will the Chancellor admit that he has to extend the furlough scheme through to the summer, to June 2021, to give those businesses the certainty they need to plan?
Rishi Sunak
We have provided that certainty through to the end of the spring, at the same time as saying that we will review the scheme in January to ensure that it is operating well and at that point review the employer contribution. Combined with all the other interventions we have made, I think that that provides the medium-term certainty that businesses need to plan through the winter and beyond.
Katherine Fletcher (South Ribble) (Con)
I am pretty awed, to be honest, by the incredible scale of the support that this Government are putting in place for the people of South Ribble and beyond. We have a massive recovery to undertake in jobs and employment, and this is absolutely vital. There is 2 billion quid being invested in kickstart to create opportunities for people leaving education. Does my right hon. Friend agree that prioritising help for those young workers, such as those leaving Runshaw College in Leyland, is the right thing to do and a key part of how we are going to recover?
Rishi Sunak
My hon. Friend is absolutely right. It is young people who are most impacted economically by the crisis we are experiencing, and she is absolutely right that they should be at the heart of our thinking about the recovery. The kickstart scheme is at the centre of that, providing fully funded job placements for at-risk young people. Tens of thousands are starting their jobs in the coming days and weeks, and we look forward to those young people having a new springboard into a bright career in her constituency and elsewhere.
Jim Shannon (Strangford) (DUP)
I thank the Chancellor for what he has said today. The equality for all the United Kingdom of Great Britain and Northern Ireland is good news. Whether we are in Edinburgh, Cardiff, London or Belfast, we are treated equally. In relation to the Northern Ireland Assembly, which has been in a circuit breaker for the past two weeks, the Chancellor has said that the help will go right through until March, but should it be needed beyond that, it will be important to have that in place. Can the Chancellor specifically tell me what support will be given to businesses that have recently been set up but are excluded from the financial support schemes and are under extreme pressure for their very survival? It is good to hear that the United Kingdom of Great Britain and Northern Ireland is being treated equally, but it is also good to have something for those small companies that have just been set up.
Rishi Sunak
I can confirm that all our job schemes work on a UK-wide basis, treating everyone equally wherever they live, and that will continue always to be the case. I am also pleased to confirm today a £400 million increase in the up-front funding guarantee for Barnett consequentials for Northern Ireland, bringing the total to £2.8 billion, and I am sure that the Northern Ireland Executive can use that funding to support businesses in the way that the hon. Member describes.
Robin Millar (Aberconwy) (Con)
I thank my right hon. Friend for the support that we have received. In Aberconwy, 8,800 jobs have been protected through the job retention scheme. Across Wales, 82,000 self-employed people have also been supported. Indeed, across Scotland, Northern Ireland and the whole of Wales, there have been unprecedented levels of support through schemes, through Barnett consequentials and more throughout this pandemic. Will he confirm again that this House stands for the whole United Kingdom, that it is our shared markets and strong economy that make this level of support possible and that all parts of our Union will continue to receive the attention and support of our Government?
Rishi Sunak
My hon. Friend puts it incredibly well. This is a crisis that has engulfed our entire United Kingdom, and we will get through it together as one United Kingdom. This Government will continue to support businesses and people, wherever they live.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) [V]
Although I am disappointed that there was no mention of those who have been excluded so far, I welcome much of what the Chancellor has said, particularly in relation to the devolved nations. However, when I asked just two weeks ago for greater flexibility for the Welsh Government to support jobs during their fire break, that support was not forthcoming. Greater Manchester and other parts of the north of England received a similar response. I ask the Chancellor whether he and the Government realise that pitting areas of the UK against each other serves only to damage the integrity of the United Kingdom, and I urge him to recognise the need for equity across the Union.
Rishi Sunak
There is equity across the Union. I thank the hon. Gentleman for welcoming the measures, but there is equity because everyone is treated exactly the same under these nationwide schemes. With regard to support in Wales, as I have said, £600 million more was announced today for the Welsh Government, bringing the total up to £5 billion of funding. Again, I am sure that the Welsh Government can use that money in the way that he suggests, which is to support businesses, if that is indeed what they want to do.
Jonathan Gullis (Stoke-on-Trent North) (Con)
May I add my name to the long list of people who, once again, are thanking my right hon. Friend for his unprecedented support, which will be a great source of comfort to the residents of Stoke-on-Trent North, Kidsgrove and Talke? May I raise the fact that there is not just a financial incentive through the kickstart scheme for the under-25s, but a financial incentive now for the over-25s in the form of apprenticeships, which will be a huge boost to the jobs and economic recovery of Stoke-on-Trent and Staffordshire. Does he agree that this type of scheme is exactly the way forward and that employers should be taking it up to ensure that we can reskill and retrain a workforce, who, in Stoke-on-Trent, are sadly largely low-skilled and therefore stuck, in some cases, in low-wage jobs?
Rishi Sunak
My hon. Friend is absolutely right. For almost the first time, there is now a cash incentive for businesses to take on older apprentices, given the particular nature of the crisis that we face. I am glad that that will help to train and reskill people in his constituency. I hope that many of them will find their way to the world-beating ceramics industry that he champions so well, which I know will also be heartened by the extension of the furlough scheme today.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Chancellor is right that the strength of our Union comes when we are working together, yet the reality of the delay in announcing the extended support for Wales meant that jobs were lost when all the Welsh Government were doing was following the evidence. The Chancellor had said that it was a strength to act in an agile and fast-moving way, and that is exactly what they were doing. He also described the extended restrictions as “the only viable option”. Will he now do the right thing, in the interests of the Union, in the interests of fairness and in the interests of equity, and backdate the extended support to 23 October and allow those who lost their jobs potentially to be rehired and then furloughed?
Rishi Sunak
I thank the hon. Gentleman for his comments. What I can tell him is that the new CJRS date for eligibility will be 30 October, which means that those who were notified to HMRC at any point up to that time will be eligible to be furloughed under the new scheme and, indeed, those who were let go before the announcement of the plans in September can also be rehired and put back on the scheme.
The details of that are in the guidance, which will be published imminently.
Peter Gibson (Darlington) (Con) [V]
I thank my right hon. Friend on behalf of the 1,900 self-employed people of Darlington who have benefited from the self-employed income scheme and who will welcome his announcement today, but may I urge him to ensure that this money gets out of the door as quickly as possible, particularly with Christmas just around the corner?
Rishi Sunak
I can give my hon. Friend that assurance. Those are three-month grants for the self-employed. The system will open in November so that grants can be paid in December, in time for Christmas, as he says. As he knows, that builds on our significant support for the self-employed. More than 3 million people are eligible for that support, which is now worth more than £14 billion. Today’s announcement will mean an additional £7 billion of support to those people over the Christmas period.
Hannah Bardell (Livingston) (SNP) [V]
My constituent Douglas McCarthy has been running the bespoke travel business Travelyard for many years and has seen his livelihood completely evaporate. Despite the fact that he has been bringing folk home and providing a vital service in the community, he feels that his industry has been virtually ignored by the UK Government and the insurance sector, which is failing to pay out on his business interruption insurance. In addition to the uncertainty over UK Government support, my constituent has had to fulfil full refunds out of his own pocket with very little support. Will the Chancellor, or someone from his team, meet my constituent and me to hear the specific concerns on what can be done to support him and travel agents like him?
Rishi Sunak
Travel agents’ businesses, coming under the retail category, will benefit from business grants in England, and that money has been Barnetted to Scotland, so the Scottish Government can choose to do something similar to support their travel agents. My hon. Friend the Economic Secretary has previously worked with the insurance industry and the Financial Conduct Authority to provide clarified and updated guidance on business interruption insurance.
Ms Angela Eagle (Wallasey) (Lab)
Will the Chancellor now admit that his premature wind-down of furlough, which he had scheduled to finish last weekend, in the middle of what many people expected to be a second wave, was actually a mistake? Will he admit that the virus does not conform to Treasury models or his own timetable for it to disappear? Will he continue to show flexibility? Will he confirm, for the avoidance of doubt, that if the current lockdown ends on 2 December, the furlough scheme will still be available to all those across the country, whatever tier of restrictions they are put back into?
Rishi Sunak
I can give the hon. Lady that assurance. The CJRS has been extended to the end of March for all people in the United Kingdom, not dependent on the tiers. We will review in January whether it is appropriate at that point to ask employers to start making a contribution as the economy recovers. We will make that decision in January.
Mr Peter Bone (Wellingborough) (Con) [V]
I thank the Chancellor for coming to the House again to update us on the current situation, and congratulate him on the enormous amount of help that has been given to the British people throughout this pandemic, but could he tell us how the country is going to pay for that support?
Rishi Sunak
My hon. Friend asks an excellent question. In the short term, we are paying for this through extensive borrowing. He will see that this year our debt-to-GDP will rise to roughly 100%. We are also carrying a significant ongoing borrowing requirement, as is evident in the forecasts that have been seen. That is not a sustainable situation, so as we continue to recover and grow, we will have to make sure that we reduce our structural deficit over time, in line with the recommendations from the IMF, to stabilise it. In the first instance, that will come through growth, but we also need to make sure that our public finances are balanced appropriately so that we can pass a strong economy on to the next generation.
Caroline Lucas (Brighton, Pavilion) (Green) [V]
In reply to a question I asked the Chancellor back in September, he said that those excluded from the self-employed scheme earned more than £50,000 and were in the top 5% of all earners. I would like him to admit today that that is not a fair picture of those who have been left out. Millions have been excluded who are not and never have been in the top 5% of all earners. Will he explain why he has deliberately left out so many people again when announcing this latest version of the self-employed scheme, and will he today finally commit to delivering justice for the self-employed?
Rishi Sunak
The hon. Lady talks about justice. We have spent over £14 billion to protect and support the self-employed, over 3 million of whom have been eligible for support. That is more substantial, comprehensive and generous than essentially any other country anywhere in the world. Today we have announced that that support is being increased in generosity and lasting longer, with an additional £7 billion, potentially, being paid out in December. I stand by what I said. One of the criteria for qualifying for the self-employment grant was that earnings were less than £50,000. Because we have less information about the self-employed, it was right to target that support at those who need it most. Of all the people who are majority self-employed, 95% earn under £50,000, and the average income of those over the £50,000 limit is about £200,000. I think that is a reasonable and fair way to make sure that we help the most needy in our society.
Scott Benton (Blackpool South) (Con)
I commend the Chancellor on his statement. The incredible £200 billion-worth of support this Government have already provided has protected thousands of jobs in Blackpool South, and I know that those businesses will warmly welcome the extension of the furlough scheme through to March. However, the reliance of coastal communities such as my own on tourism in the years ahead will present particular challenges, so will he meet me and my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) to discuss that, in order to make sure that we continue to keep this Government’s core ambition of levelling up on track in coastal communities?
Rishi Sunak
My hon. Friend is a fantastic champion for his local area and his local small businesses. I know how important tourism and hospitality is to his local economy. He will know that I am also a champion of that industry, and I would be delighted to meet him and other colleagues.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]
Only a week ago, the Government told West Yorkshire to go into tier 3, with pub and bar staff in my constituency told that their jobs were being completely stopped—it was to be the same for them as under national lockdown. When we asked the Government to give them the full furlough scheme because their jobs were being stopped, the Chancellor said no. The facts show that when the jobs being stopped by covid restrictions were just in the north, he decided that they were worth only 67% and he treated them as second class. We need a guarantee that he will not do the same again. We have heard his defensive explanation that he got all the decisions right all along the way up to now, so can he explain why one week ago jobs being stopped in my constituency were worth 13% less?
Rishi Sunak
I say to the right hon. Lady, as I have said before, that all the interventions we have made apply on a UK-wide basis; they treat people the same, equally and fairly, wherever they happen to live. That was the case, is the case and always will be the case, and I can give her that assurance.
Theresa Villiers (Chipping Barnet) (Con)
Like others, I am hugely grateful for this massive programme of support for jobs and livelihoods, which is helping so many people, including in my constituency, but it will all have to be paid for in the end, so will the Chancellor set out a plan to deal with the deficit and return the public finances to a sustainable footing for future generations?
Rishi Sunak
My right hon. Friend is right, and there will be a time when it is appropriate to do exactly as she suggests. Given the uncertainty at the moment, particularly with the economic forecasts, it is difficult to do that with precision and I think it would be inappropriate. However, in a few weeks’ time we will have an updated set of forecasts from the Office for Budget Responsibility. They will illustrate the future direction of the deficit and the public finances, which will give us a sense of the task ahead of us and allow us to have a conversation about how, over time, to return the public finances to the sustainable position to which she rightly says they should be returned.
Kate Hollern (Blackburn) (Lab) [V]
Businesses in Blackburn have been under additional restrictions since July and entered tier 3 almost three weeks ago. Despite agreeing to give Lancashire local authorities £30 million in business support, which is equivalent to about £20 per head, the Government are yet to provide a penny. Now that the country is going into lockdown, other areas are entitled to the same amount of support. It does not seem fair that businesses in Lancashire, Greater Manchester, South Yorkshire and Liverpool are entitled to the same amount as areas that were not under additional restrictions. Will the Chancellor explain the formula used to calculate the £20 per head business support grant, how long this funding is supposed to last and whether areas that were previously in tier 3, or may be returned to tier 3 after the current lockdown, can expect adjustments in the level of grant to reflect the greater economic impact that they are experiencing?
Rishi Sunak
I am pleased to tell the hon. Lady that the business grants schemes that were outlined—up to £3,000 a month for closed businesses and 70% of that for open businesses—have been backdated for those areas that were experiencing heightened restrictions for some weeks and months before the tiering system was introduced. That funding will be backdated, and I believe it will be paid in cash to local authorities next week, with the allocations given this week.
Steve Double (St Austell and Newquay) (Con)
May I again thank the Chancellor for his willingness to be flexible to respond to the changing needs of our economy during this crisis, and for the grants that will be made available to businesses that are forced to close? He will know that there will be many businesses in supply chains that will not be forced to close but whose revenues will be affected. Will he confirm that the money available to local authorities—I believe more than £5 million is coming to Cornwall Council—is specifically to support such businesses, and that local authorities will be able to use their discretion to apply those funds specifically to meet the needs of the local economy?
Rishi Sunak
My hon. Friend is right that, in aggregate, the sum is more than £1 billion for the country with Barnett funding for the devolved Administrations. That can be used at the discretion of local authorities to support their local businesses and local economy over the winter period in a way that they see meets their exact circumstances.
John Nicolson (Ochil and South Perthshire) (SNP) [V]
We welcome the news that the Chancellor will keep the £20 universal credit uplift beyond next April, but is he aware that that will still leave people seeking work £1,000 per year worse off than they were 10 years ago?
Rishi Sunak
I am not sure that I entirely understood the question. The uplift in universal credit is temporary, but it is in place until next spring. More generally, to protect the most vulnerable in our society, I point the hon. Gentleman to the data released over the summer that shows that the suite of Government interventions means that the incomes of the lowest income households have been protected the most. That is a compassionate Conservative Government looking after everyone in our society.
Jason McCartney (Colne Valley) (Con)
May I thank the Chancellor for extending the furlough scheme to March and for the cash grants for hospitality and other businesses that have had to close across my constituency? Will he continue to look at what support he can give to freelancers, including musicians, and company directors? Will he consider a beer duty cut to support my local microbreweries?
Rishi Sunak
I know my hon. Friend is a champion for his local brewing industry. The future of tax policy will be for Budgets. With regard to the self-employed, many of the people he mentioned will benefit from the increased generosity and timeliness of the self-employment support grants that we have announced today and before. They will be paid out before the end of the year up to the value of £7,500 per person.
David Linden (Glasgow East) (SNP)
The livelihoods of many self-employed Glasgow taxi drivers have been devastated in recent months. I note on page 9 of the Chancellor’s statement that he says that the income support grant for self-employed people will go through until January. Why will it not go through until March, in line with the furlough scheme?
Rishi Sunak
It will; the grant will be there for a second one. It has already been announced that there will be a fourth grant payable in the spring. The exact value of that will be determined in January at the same time as we decide on the future furlough employer contribution, because those things generally align with each other. There will be a fourth grant, as has already been confirmed.
Ellie Reeves (Lewisham West and Penge) (Lab)
I welcome the extension of the furlough scheme, but the Government have had since March to fix the gaps in the CJRS and the self-employment income support scheme, which have excluded more than 3 million individuals from support. That has caused huge damage to businesses and families. As we enter the second lockdown, the Chancellor could still amend that and fix the gaps that have been outlined extensively in this House. Will he commit to doing that? What is his message today to those 3 million excluded? What support will they be getting?
Rishi Sunak
The hon. Lady refers to gaps, but as I have explained in previous answers, some of those are deliberate policy decisions to target support on those who need it most, which is the right and principled thing to do. I have also said clearly that, when it comes to the self-employed, I appreciate we have not been able to help everyone in exactly the way that they would have liked, but I hope that across the suite of different things we have done, whether business rates holidays, tax deferrals, bounce back loans, improvements to our welfare system or the housing allowance, there is something that can benefit the vast majority of the British people.
Sir David Evennett (Bexleyheath and Crayford) (Con) [V]
I welcome the statement that my right hon. Friend has made today and all that he has done to help businesses during this pandemic. Does he agree that today’s increase of the third self-employed grant from 55% to 80%, on top of the £13.7 billion of support already provided, means that the package of support for the self-employed is one of the most comprehensive anywhere in the world? I believe that the self-employed in my constituency of Bexleyheath and Crayford will welcome the further assistance that my right hon. Friend has announced today.
Rishi Sunak
I thank my right hon. Friend for his comments. He is absolutely right: we should be very proud that we have been able to step in and support more than 3 million of those who are self-employed with comprehensive and generous support. That was the case at the beginning of this crisis and will remain the case all the way through to next year.
Cat Smith (Lancaster and Fleetwood) (Lab)
This morning, I received a phone call from my constituent, Hannah, who has a stall on the Lancaster charter market, which is an outdoor market. She and her business partner Hettie have been trading for just over a year and this is the second time that their business has had to close in that short period. She would like to ask the Chancellor whether traders who trade on outdoor markets should be considered differently from other traders, in order that such small, independent businesses might have a chance to thrive.
Rishi Sunak
What I say to Hannah and Hettie is that if they are registered for business rates themselves, they will be eligible directly for one of the business grants of up to £3,000 for every month that they are closed. We found that many traders in covered markets were not registered for business rates, which is why previously we provided discretionary funding to local councils specifically to deal with such examples as the hon. Lady has raised, so I hope that, if Hannah and Hettie are not registered for business rates, the local council followed the guidance and was able to provide them with support. We are now providing £1 billion of discretionary support to local councils, so I hope that the council can provide support to the hon. Lady’s constituents.
Sir Robert Neill (Bromley and Chislehurst) (Con)
This is a welcome package from my right hon. Friend, particularly in relation to the self-employed, but I hope we will look again at some of the detail of the exclusions and definitions in the self-employed scheme—things like the definition of trading profits and other matters that exclude some people.
Will my right hon. Friend also look at the position of the private and corporate events sector? Currently, businesses in the sector fall into a gap because they have not qualified for business rate relief because they sell food not directly to the public but through their clients, and they have not qualified for VAT relief on similar grounds. Such businesses are a critical part of the sector, worth many millions of pounds to the economy and employing some 600,000 people. Will my right hon. Friend look at what specific help they can be given?
Rishi Sunak
I am always happy to hear suggestions from my hon. Friend, particularly on improvements to technical language or drafting and guidance. If he has some suggestions, I look forward to receiving them soon.
Stephen Flynn (Aberdeen South) (SNP) [V]
In March, fewer than 8,000 people in Aberdeen were in receipt of universal credit; by September, the number had more than doubled to over 17,000 people. The Chancellor has made one spectacular U-turn today, so will he make another? Will he confirm that he will provide the funding necessary to maintain the £20-per-week universal credit uplift beyond the spring?
Rishi Sunak
Obviously, the Scottish Government are due to outline a budget at some point soon and, in respect of future tax and welfare policy, if that is something that the hon. Gentleman and the Scottish Government want to do, I am sure they have every tool and lever at their disposal to do exactly that.
Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]
I thank my right hon. Friend for all that he has done during this challenging time to support jobs and businesses. As he will know, this is Tomorrow’s Engineers Week. As the former engineering envoy, I am keen to see our vital engineering sector continue to thrive and prosper, so will my right hon. Friend tell the House what steps are being taken to ensure that the engineering sector has full access to and participates in the excellent kickstart scheme, to bring on the talent of the future?
Rishi Sunak
My hon. Friend is a fantastic champion for the engineering sector, which he cares deeply about and has spoken to me about previously. He is right: it is important that we train the engineers of tomorrow, and what better time than Tomorrow’s Engineers Week? I would be happy to talk to him and any organisations that he wants to connect me with to make sure that the sector fully benefits from the opportunities we are providing for companies to take on bright new people and provide them with a better future.
Tonia Antoniazzi (Gower) (Lab)
This is a simple question to the Chancellor: why does he dress up on social media the financial support—which, as he stated today, has been given equally and fairly, wherever people live—saying that the Welsh should be grateful for what is equally and fairly theirs to receive?
Rishi Sunak
As I have said before, this is a United Kingdom approach. We have universal schemes that benefit people equally wherever they live. On top of that, for those things that are devolved—that we do solely in England—I have announced today extra funding of hundreds of millions of pounds, with £5 billion in total for the Welsh Government, which can be used as they wish to support their constituents. I look forward to seeing how they plan to spend that money.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
My constituents understand the enormous challenges that the Government face, and that we cannot save every single job, but does my right hon. Friend share my pride that the IMF has said that our response to covid is
“one of the best examples of coordinated action globally”,
and that it specifically praised our response for
“holding down unemployment”?
Rishi Sunak
My hon. Friend is absolutely right. At the heart of our approach throughout this crisis has been the protection of people’s livelihoods. We have strived at every turn to make sure that people can stay in work and their incomes are supported. As we go through this crisis, I assure every Member of the House, and the country, that that remains my overriding priority. We will throw absolutely everything we can at it.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
In contrast to some of the churlish comments from colleagues north of the border, I thank my right hon. Friend for listening and acting and demonstrating yet again, as the Government have throughout this crisis, that this UK Government—this one nation Conservative Government—act for and support people around this country, no matter in what region or nation they reside.
Rishi Sunak
A fitting place to end, I think. My hon. Friend is absolutely right. It is a demonstration of the strength of the Union, and an undeniable truth of this crisis, that we have been able to provide this level of economic support because we are one United Kingdom.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Chancellor for his statement today, and for responding to 38 questions in just over one hour. We are now suspending for three minutes.