Treasury
Rishi Sunak Excerpts(4 years, 7 months ago)
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Joy Morrissey
The start-up loan programme has been hugely successful in getting thousands of new businesses off the ground, particularly in my constituency of Beaconsfield. Does my right hon. Friend agree that the announcement that the programme will be extended is hugely welcome news for entrepreneurs right across the country?
Rishi Sunak
My hon. Friend is a champion for entrepreneurship in her constituency, and rightly so. The start-up loan programme is an excellent programme, providing grants of £25,000 for budding entrepreneurs. It has been operational for some years now and has provided almost 70,000 loans, putting to work more than half a billion pounds. It is absolutely right that, as we think about our future coming through the coronavirus, it will be the entrepreneurs of tomorrow who will help to create new jobs and drive the prosperity that we will all want to see.
[Official Report, 24 March 2020, Vol. 674, c. 199.]
Letter of correction from the Chancellor of the Exchequer:
An error has been identified in the response I gave to my hon. Friend the Member for Beaconsfield (Joy Morrissey).
The correct response should have been:
Rishi Sunak
My hon. Friend is a champion for entrepreneurship in her constituency, and rightly so. The start-up loan programme is an excellent programme, providing loans of up to £25,000 for budding entrepreneurs. It has been operational for some years now and has provided almost 70,000 loans, putting to work more than half a billion pounds. It is absolutely right that, as we think about our future coming through the coronavirus, it will be the entrepreneurs of tomorrow who will help to create new jobs and drive the prosperity that we will all want to see.
Oral Answers to Questions
Rishi Sunak Excerpts(4 years, 8 months ago)
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Antony Higginbotham (Burnley) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
The Government are committed to improving the vital transport links that people rely on every day. That is why in the Budget we announced a £500 million a year fund for potholes, confirmed £1 billion for shovel-ready local transport schemes through the transforming cities fund, and set out the Government’s intention to agree long-term intra-city transport settlements worth more than £4 billion.
Damien Moore
I thank my right hon. Friend for all that he is doing. Businesses in my resort constituency have been delivered a significant blow due to covid-19. In good times, funding for the Burscough rail link would be a boost; in bad times, it could be business critical. Will he work with the Department for Transport and do everything he can to ensure that we get the funding for that vital link for our town?
Rishi Sunak
My hon. Friend is absolutely right about the impact on hotel and hospitality businesses in particular. I hope he welcomes the significant cash grant support and business rates holidays for those businesses. With regard to his rail line, he is absolutely right about the importance of such links, which is why we set up a £500 million Beeching cuts reversal fund. I know the Department for Transport would be happy to hear from him.
Antony Higginbotham
Rail links will be essential to revitalising the economy once we exit this very difficult period. In Burnley, we have a fantastic rail link that connects us into Manchester, but unfortunately, at the minute, the station is not disability friendly. I know several stations across the country have been given funding to get them disability friendly, and I wonder whether a similar scheme will be announced in the future so that Burnley can finally get a bridge over its platforms.
Rishi Sunak
I pay tribute to my hon. Friend for the work he does championing improved accessibility for his disabled constituents, which is why in the Budget we announced £50 million to remodel 12 stations. I spoke to the Secretary of State for Transport this morning about Burnley Manchester Road station, and he is happy to take a call from my hon. Friend.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Transport infrastructure and, indeed, all infrastructure relies on the construction industry, and in particular its workforce. We have had reports of workers working in close proximity in construction—indeed, I have seen that myself, including at transport-related facilities this morning—in some cases with no hygienic support and no evidence of enhanced cleaning. The industry has been described as a breeding ground for infection. What action is being taken to protect workers in that industry?
Rishi Sunak
The hon. Member is absolutely right: we must ensure the safety of our workers in their industries. The guidance from the Government last night was clear that people should go to work if they cannot work from home. In common with other countries such as Italy or France, construction has remained open, but of course it is right that that is done safely. I know that my right hon. Friend the Housing Secretary is in touch with the sector and I believe that he has had conversations about guidance in this regard.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
My local bus company is one of many, I am sure, across the country that has had to introduce short-time working, but it is unsure about the implementation of the Chancellor’s very welcome wage subsidy. Will the Treasury top up the wages of those working two or three-day weeks, or does it have to lay off, say, 70% of the workforce and rely on the remainder to cover the rest of the routes, putting themselves at risk for a similar amount of money? Can the Chancellor clear that up for us, please?
Rishi Sunak
We said that we would aim to have the scheme up and running by the April payroll. This is a brand new system that has to be designed from scratch. Claims could be backdated from 1 March, which will provide significant support to businesses and jobs, and in common with all other schemes like this across the world, the scheme applies to furloughed workers in proportion to the hours they have worked—but to workers who are put on furlough rather than being retained in employment.
Mark Pritchard (The Wrekin) (Con)
Scott Mann (North Cornwall) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
The Government remain committed to doing what they can to support businesses, our people and public services. In the last week, I have announced unprecedented measures to support business, including over £300 billion of Government-backed loans, £20 billion of tax cuts and grants, a VAT deferral worth 1.5% of GDP and a landmark job retention scheme guaranteeing 80% of the wages of furloughed workers. We believe that these measures represent the most comprehensive and generous suite of interventions of any major developed country in the world.
Mark Pritchard
On behalf of my constituents, I welcome those announcements. The Chancellor, though, will know that 15% of the UK workforce is self-employed, equating to about 5 million people up and down the country. According to the Federation of Small Businesses, there are 5,600 in The Wrekin. When will the Government come forward with plans for the self-employed and freelancers, given the immediacy of their need?
Rishi Sunak
I thank my hon. Friend for the question. I will be making further announcements about progress on these measures. It is something that we have been looking at in intense detail over the past week in the Treasury. What I can say to him is that we are in dialogue with all the key stakeholder groups, including calls that I am having today with several of those bodies. There are genuine practical and principled reasons why it is incredibly complicated to design a scheme that is analogous to the one that we have for employed workers, but he can rest assured that we absolutely understand the situation that many self-employed people face at the moment as a result of what is happening and we are determined to find a way to support them. We need to be confident that that can be done in a way that is deliverable and fair to the vast majority of the British workforce.
Scott Mann
On behalf of my residents in North Cornwall, I thank the Treasury for the support that it has put in place for employees and employers over the last few days, with this unprecedented series of events. Like my hon. Friend the Member for The Wrekin (Mark Pritchard), I want to ask about self-employment. I have a huge number of self-employed people in North Cornwall. I know that the Treasury is under a huge amount of pressure at this time, but I urge expediency on that so that we can get a package of measures in place for them, too.
Rishi Sunak
As I said, we are looking at this in immense detail and at pace. As has been acknowledged by many stakeholders in the industry, there are genuine questions about practicality, fairness and delivery of any such support scheme, which is why it requires careful thought.
John McDonnell (Hayes and Harlington) (Lab)
We have an urgent question on the self-employed after this, but to add to the comments that have been made so far, there is a sense of urgency about this now. There is no Member of this House who has not been contacted by a constituent who is in quite a distressed state about that. One of the most effective ways of supporting businesses is to make sure that the whole workforce is supported. There is another group—2 million workers are on zero-hours and there are part-time workers. They are still not eligible for statutory sick pay and they appear to be excluded as well from the job retention scheme, which is focused on the definition of “employees” while, in law, these are referred to and defined as “workers”. I have written to the Chancellor about this, so will he make a statement urgently that sets out how these workers will be protected in the same way as other workers were in the announcement on Friday?
Rishi Sunak
It is not the case that those who are on zero hours are not eligible for the existing scheme. Depending on their status, they would absolutely be eligible for the job retention scheme. It could be based on an average of previous earnings over a period in order to get smoothing, but there is no reason why they should not be eligible. In fact, any worker who was on a PAYE scheme is eligible for the job retention scheme.
John McDonnell
That is really helpful. I have welcomed the statements from the Chancellor to date, and I welcome that as well. I am grateful for the work that he is doing. There was confusion, and many of us had representations on that. I would like him to clarify one other point: he might have done so earlier and I missed it. Some people are being asked to work reduced hours in the interests of the company rather than being furloughed overall, and it appears that those people may also be excluded from the scheme. There is a lack of clarity on that: again, could the Chancellor confirm whether those workers will be included in the scheme? If not, can he bring forward a fairly urgent reform to the scheme to enable that to happen?
One other category we have had questions on is those people who have work available but cannot do it because of the shutdown of their childcare arrangements and as a result have childcare responsibilities. Are they are eligible for the furlough support scheme as well?
Rishi Sunak
In common with schemes all around the world, the schemes are for furloughed workers. The check is that the company decides to put an employee into a furlough scheme rather than retain them as employed. That is exactly the same as every other scheme. It is not possible to design a scheme that deals with flexible hours, with the result that the state would essentially be subsidising the wages of almost the entire workforce. It is something that we looked at in detail and, given the time we have available, we went with a scheme that could be delivered and is in common with almost every scheme around the world that does exactly the same thing.
Richard Thomson (Gordon) (SNP)
It is vital that we work across party lines at this time, and the SNP very much welcomes the Chancellor’s economic package for firms and workers announced last Friday. Given that millions of small businesses, freelancers and the self-employed are understandably concerned about their incomes, we welcome the fact that the Chancellor is considering a response to that and understand that it is important to get it right, but when does he expect to be able to come back to the House and announce the details?
Rishi Sunak
As I said, we are looking at these things. I will not commit to a specific day until we know we can work through the details. One of the issues is that of course there are people whose incomes have been enormously impacted by what is going on currently, but there are also millions of people who are self-employed whose incomes may not have been impacted and, indeed, might be increasing. The ability of the Government to distinguish between those people, based on tax returns that are over a year and a half out of date, poses some very significant challenges in terms of fairness and affordability.
Richard Thomson
I thank the Chancellor for that answer, and our offer to work with him to protect incomes remains open. As part of his deliberations on this and in order to simplify the process of getting the money to where it needs to go, will he consider using the tax and welfare system to roll out a universal basic income in these times?
Rishi Sunak
We are not in favour of a universal basic income, although we have strengthened the safety net for the most vulnerable in our society, with more than £7 billion invested into improving our welfare system for this year, including improvements to universal credit, employment support allowance and, indeed, the local housing allowance. Those payments are all available more quickly, more easily and more generously than they were before, and I know that will make an enormous difference to many vulnerable people.
Derek Thomas (St Ives) (Con)
I am grateful for the opportunity to raise an issue that seems unique to my constituency. The Isles of Scilly sit 28 miles off Land’s End, and all people and supplies travel via large and small private companies. Those businesses rely on the tourist trade in the summer, but that has completely collapsed, and every single one of those businesses is liable to collapse if the Government cannot move quickly. Can the Chancellor look at this issue urgently, because 2,500 people are relying on urgent action from the Treasury to make sure that their transport infrastructure system is sustained and retained?
Rishi Sunak
I am happy to talk to my hon. Friend further about his particular constituency issue, which I know poses particular challenges. We have committed to providing local authorities—and indeed all Departments —with any funding required to support public services, including local transport infrastructure in their communities.
Wes Streeting (Ilford North) (Lab)
On behalf of my constituents who will benefit from the measures that the Chancellor announced last week, may I sincerely thank him for the action that he has taken and for the responsibility that he is carrying? We are all rooting for him to succeed in the task ahead. The challenge, as others have described, is that for those who do not benefit, in particular the 5 million self-employed, the anxiety has increased, because they have seen a ship sailing carrying others but not them. I think they will be reassured that the Chancellor has given a clear commitment to do something, but many are facing a cash-flow crisis right now, so can he say a bit more to reassure them about how quickly he can implement the measures that he is considering?
Rishi Sunak
1 am very grateful to the hon. Member for his warm words; I appreciate them. We are looking at pace at what support can be provided. The fact is that the universe of 5 million that we are dealing with contains such a wide variety of different people that we are unable to target support. That is the challenge in designing something that gets to the people who we want to help, while at the same time being affordable and not having to benefit absolutely everybody. That is proving to be problematic, but we are hard at work on it.
In terms of delivery, it is almost certainly going to be the case that we would have to build another brand-new system to deliver any support. I am sure that hon. Members on both sides of the House would agree that, in terms of prioritising system design, the scheme that we have set up for 90% of the workforce who are employed should be delivered first and quickly, and that is what we have committed to do, ideally by the end of April. We are looking at how we can do these things in sequence or in parallel, but I take the hon. Member’s point: people are anxious. That is why we deferred the self-assessment tax return that is due shortly to provide some cash-flow benefit. We have also deferred VAT to a significant degree, which will help with cash-flow benefit, and many self-employed people will benefit from the business interruption loans, which are also interest-free.
Mr Philip Hollobone (Kettering) (Con)
Joy Morrissey (Beaconsfield) (Con)
The Chancellor of the Exchequer (Rishi Sunak)
We are facing an unprecedented challenge as a country, as a Government and as a society. The spread of the coronavirus has precipitated the extraordinary but necessary actions taken by this Government over the past week to protect people’s health and livelihoods and the economy we all rely on. There will be challenging times ahead, and despite the significant economic interventions that we have put in place, we will not be able to protect every single job or save every single business, but I am confident that the measures we have put in place will provide support to millions of people and businesses and ensure that we do get through this, get through it together, and emerge on the other side both stronger and more united.
Joy Morrissey
The start-up loan programme has been hugely successful in getting thousands of new businesses off the ground, particularly in my constituency of Beaconsfield. Does my right hon. Friend agree that the announcement that the programme will be extended is hugely welcome news for entrepreneurs right across the country?
Rishi Sunak
My hon. Friend is a champion for entrepreneurship in her constituency, and rightly so. The start-up loan programme is an excellent programme, providing grants of £25,000 for budding entrepreneurs. It has been operational for some years now and has provided almost 70,000 loans, putting to work more than half a billion pounds. It is absolutely right that, as we think about our future coming through the coronavirus, it will be the entrepreneurs of tomorrow who will help to create new jobs and drive the prosperity that we will all want to see.[Official Report, 21 April 2020, Vol. 675, c. 1MC.]
John McDonnell (Hayes and Harlington) (Lab)
May I again welcome much of what the Chancellor is doing, and say that we wish to work with him as positively as we possibly can in this very difficult period? I just wish to return to the issue of zero-hours workers. The Chancellor said very clearly that this applies to all those who are on PAYE, and I welcome that, but the point that we have been making is that many of these zero-hours contract workers—in fact, most of them—are not on PAYE. They are called limb (b) workers, so the scheme does not apply to them. I understand that he is doing his best and I understand the complications, but he has also said that for zero-hours workers, employers may compensate on the basis of average hours worked. The unions in this field representing those workers have urged that this should be mandatory and applied to all zero-hours and variable-hours workers based on average earnings over the previous weeks. That is exactly how those workers’ holiday pay is calculated at the moment, and it is an accurate reflection of what they earn. We need some urgent action for this sizeable group of workers. There are at least nearly a million zero-hours workers, perhaps a million more.
Rishi Sunak
As we are putting in place the detailed guidance for the scheme, we are actively considering the question of how best to average the earnings of people in this situation. I very much take on board the suggestion that the right hon. Gentleman has made, and I know that my team are engaging with those unions as we speak to try to get the details right.
Mr John Baron (Basildon and Billericay) (Con)
Rishi Sunak
My hon. Friend is absolutely right about the importance of cash flow, which is why we have targeted our interventions specifically at smaller businesses by providing extra cash flow support. We have done so through the £10,000 grant to every business in receipt of small business rate or rural rate relief and, indeed, through the deferral of VAT, which starts from today for the quarter. As my right hon. Friend the Financial Secretary to the Treasury said earlier, that represents more than £35 billion, or 1.5% of GDP-worth of tax deferral, providing immediate cash-flow support. We have done the same thing for self-assessment payments that are due in the coming months and have also, as of yesterday, launched a business interruption loan scheme, which my hon. Friend has done fantastic work developing. It will provide 12-month interest-free loans to small businesses, again, to help provide them with the liquidity that they need to get through this.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Simon Baynes (Clwyd South) (Con)
Rishi Sunak
I thank my hon. Friend for his comments and pay tribute to the work that he is doing to represent his constituents and make sure that his local businesses get the support that they need. I hope that his businesses welcome the various interventions that we have provided in terms of cash flow support, tax relief deferrals, and subsidised loans to help them get through this difficult period. If he has further ideas that he thinks we should consider, I would be very happy to talk to him further.
Mr Kevan Jones (North Durham) (Lab)
Supply teachers play a vital role in our schools. Many thousands, including my constituent Ellie Atkinson, have found themselves out of work, so may I urge the Treasury to look at a way of supporting these vital workers, either with direct financial support or by ensuring that they can actually work in the schools that are being kept open?
Nicola Richards (West Bromwich East) (Con)
Rishi Sunak
I thank my hon. Friend for her support, and join her in paying tribute to Sandwell Community Caring Trust, which we will be relying on through this difficult period. I can confirm that charities are eligible for the job retention support programme. Further to that, we have allocated extra funding to the Ministry of Housing, Communities and Local Government to provide money to local charitable or caring organisations, especially to help those we are attempting to shield—the most vulnerable—in order to protect them against the effects of the coronavirus.
John Spellar (Warley) (Lab)
Yesterday in the Chamber, I and my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) raised the question of escalating prices in local shops and concerns about profiteering. We understand that the Competition and Markets Authority may be looking into this issue, but may I ask the Minister to urge it very rapidly to look at where this is taking place? Is it local shops, wholesalers or cash and carry, or suppliers? Is it even to do with the international market in terms of perishable goods? This is a matter of real concern. Once the Government have found out where the problem is, will they bring forward measures to crack down on this profiteering?
Sir Desmond Swayne (New Forest West) (Con)
Rishi Sunak
I thank my right hon. Friend for his comments. It is certainly possible to use those historical returns. They are a year and a half out of date, so they will be necessarily imperfect. They also do not provide an easy way to distinguish between those who are deserving of support and whose incomes are being affected by what is happening, and those who are much wealthier and whose incomes are potentially increasing currently, but they do provide a basis and a universe to look at.
Bill Esterson (Sefton Central) (Lab)
When I mentioned earlier that the universal credit system was overwhelmed, the Minister may not quite have taken on board the point I was raising. A self-employed worker sent me a screenshot of their attempts to use the system yesterday; 33,383 people were ahead of them in the queue to use the claims section of the website. Unless this is resolved, people who need money right now—limited though that money is under universal credit—simply will not be able to get hold of it through the system.
Henry Smith (Crawley) (Con)
Obviously, airports and airlines are particularly adversely affected by the covid-19 situation.
Rishi Sunak
My hon. Friend is right, especially given his constituency, to highlight the importance of airlines and airports. They have been particularly impacted by what is happening. I am in active dialogue with the Secretary of State for Transport and expect to write soon on that matter.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Ind)
In Kirkcaldy and Cowdenbeath and other constituencies, public service workers, not bankers or nuclear weapons, will get us through this crisis. We must therefore change our focus. Will the Chancellor consider whether the nurses, doctors and other public service workers, who will be doing double shifts and working extra hours to get us through, can get tax relief on those extra hours so that they are properly rewarded and recognised for their tremendous efforts?
Rishi Sunak
We pay tribute to our public sector workers, particularly those who are on the frontline of the NHS as we speak. We have said that we will make any and all funding available to the NHS to provide and support that workforce. That is exactly what we are doing, as my right hon. Friend the Chief Secretary outlined earlier. In the Budget, we specifically changed the taper relief, which was causing hours challenges for senior doctors and GPs. That was a significant fiscal intervention—we are providing more than £2 billion of tax relief to ensure that there is no disincentive for those senior clinicians to provide the extra work at this time.
Mr Tobias Ellwood (Bournemouth East) (Con)
The economic interventions that the Chancellor spoke about are greatly welcome in Bournemouth East. Will he join me in paying tribute to the armed forces for what they are doing and what they will do? We should all recognise that that is in addition to their day job of keeping the nation safe. What will happen in the spending review? Does my right hon. Friend agree that it is important that there is additional capacity for our armed forces so that they can deal with the threats that continue to exist, but also have the ability to step forward to help the nation in times of crisis?
Rishi Sunak
My right hon. Friend is absolutely right to highlight the importance of our armed services, and I join him in paying tribute to them for what they are doing, not just to keep us safe every day, but right now when we are calling on them to help us meet this public health emergency. As we speak, they are doing extraordinary work to help our healthcare system to respond to what is coming. We recognise that, and it will be recognised when we think about funding for the armed services not just today, but in the future.
Wes Streeting (Ilford North) (Lab)
One newspaper is already reporting that the Chancellor will implement an income protection scheme for the self-employed and make an announcement in the next 24 hours. I must say I got a slightly longer timescale from the Chancellor’s earlier reply, when he talked about the end of April. To come back to the point about reassurance, will he give some real reassurance now to those anxious self-employed people across the country that an announcement will be made very shortly?
Rishi Sunak
We hope to have something to say very shortly. Implementation will take longer for the reasons I outlined, when a good point was made about capacity, whether at HMRC or DWP, to deliver brand-new schemes. However, in terms of saying what we plan to do, hopefully we can do that relatively shortly. Implementation will take longer because of the clear delivery challenges that the scheme would pose.
Jacob Young (Redcar) (Con)
I thank my right hon. Friend and the Treasury team for all their work to help people through this crisis. Will my right hon. Friend outline when employers can access the scheme for job retention scheme and furloughed workers?
Rishi Sunak
Detailed guidance is available. Further guidance will be provided and our aim is to build the new scheme so that it is operational by the end of April. That is a challenge. We are already working night and day to construct something from scratch, but claims will be allowed to be backdated to 1 March so that businesses have the security of knowing that the cash-flow rebate will be coming. As I have said, the aim is to have the scheme up and running so that the April payroll can be reimbursed through it.
Christian Matheson (City of Chester) (Lab)
One of the problems with this crisis is that we do not know how long it is going to last. I have businesses in my constituency—events companies, conference companies and sporting companies—that have long lead-in times to organise their events, but they cannot cancel them yet and thereby claim insurance because there is no Government guidance. Do the Government have any plans to give guidance, particularly to the insurance companies and events companies, that will perhaps say, “No events for the next six months”?
Kevin Brennan (Cardiff West) (Lab)
A couple of times in the context of the self-employed, the Chancellor has mentioned wealthy people whose incomes are increasing. That is not who we are talking about. We are talking about people who have lost their entire income overnight. Will he please provide some more reassurance that it is his intention to provide help to those people? Does he intend to say how he will do that very soon and say to the banks in the meantime that they should be extending credit on a free basis, on the basis of what he has promised, so that people can get on with their lives?
Rishi Sunak
The hon. Gentleman illustrates exactly the issue with such a scheme. Looking at historical tax return data from a year and a half ago gives absolutely no guide as to whether someone today who is self-employed is prosperous, and indeed that their income may be increasing versus someone, who is not. Of course I am sympathetic to those whose situation is being adversely affected by what is going on. The issue is one of finding a way to target help at them, rather than having something that provides blanket cash subsidies to 5 million people, many of whom will not need it, which will end up costing all our constituents on modest incomes a considerable amount. It is about finding a way to target support for those who most need it, and that is what is requiring time and thought.
Mark Pritchard (The Wrekin) (Con)
Will the Chancellor join me in thanking Shropshire Council and the hard-working people at Telford and Wrekin Council? Cash flow is becoming a real issue for many local councils, with many having to borrow. Could he encourage his officials in the Treasury to be a bit more flexible as to where finance can come from and the use of reserves?
Rishi Sunak
I am happy to look at specific suggestions. I pay tribute not only to my hon. Friend’s council but to all councils for the sterling work they are doing in delivering our grant schemes to many of their small local businesses. We are in dialogue already with the Ministry of Housing, Communities and Local Government, to ensure that councils’ cash-flow needs are adequately met. There are things we are doing actively in terms of the timing of the various grant payments we make, to ease some of the near-term cash-flow pressures.
Jim Shannon (Strangford) (DUP)
Can the Chancellor clarify whether the emergency cash grant scheme is intended to help per shop for businesses with more than one premise in different towns, or is it just for the business as a whole?
Rishi Sunak
The detailed eligibility criteria are online and will be provided by local authorities. The grants of £10,000 are done on a per premise basis for businesses that are in receipt of small business rate relief and rural rate relief. There are larger grants for those in the retail, leisure and hospitality sector of up to £25,000. The Business Secretary has written already to local authorities, which are, as we speak, writing to businesses that are eligible for those grants to seek their bank details and start making cash payments as soon as is practically possible.
Mr Speaker
Before we move on to the urgent question, I should say that I am bothered that Members are rather close in some areas of the Chamber. If it is possible to spread out, I would be very grateful.
Notification of Contingent Liability
Rishi Sunak Excerpts(4 years, 8 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
The Monetary Policy Committee (MPC) of the Bank of England decided at its meeting ending on 19 March 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 £200 billion of further purchases of gilts and corporate bonds to support the economy through the disruption caused by covid-19.
In light of the evidence on the impact of covid-19 on the global and domestic economy, and conditions in the UK and international government bond markets, 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. The MPC expects that purchases of corporate bonds will improve the availability of credit to UK companies and that further purchases of gilts will reduce borrowing costs, raise asset prices, affect expectations and confidence, and thereby support the economy. I have therefore authorised an increase in the total size of the APF of £200 billion. This will bring the maximum total size of the APF from £445 to £645 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.
[HCWS184]
Contingent Liability
Rishi Sunak Excerpts(4 years, 8 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
In my oral statement yesterday I announced a new credit easing scheme called the Covid-19 Corporate Financing Facility (CCFF), which is expected to become operational in the week commencing 23 March 2020. This scheme will be run by the Bank of England (The Bank) on behalf of HM Treasury. HM Treasury are extending a full indemnity for the CCFF, which will create a new contingent liability for the Government equal to the potential losses of the Facility.
The CCFF will be a credit easing scheme targeted at easing the disruption to cash flows of companies following Covid-19. The scheme will focus on purchasing newly issued commercial paper from eligible companies, which are non-financial companies that make a material contribution to the UK economy and are rated investment grade. The CCFF is unlimited in size.
HM Treasury will monitor risks to public funds from the facility through regular meetings with the bank. The bank will manage the facility in accordance with a stringent risk control framework agreement between HM Treasury and the bank, which will be similar to existing frameworks such as that of the asset purchase facility (APF).
A departmental minute has been laid in the House of Commons providing more detail on this contingent liability.
[HCWS169]
Economic Update
Rishi Sunak Excerpts(4 years, 8 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
Thank you, Mr Speaker. I am grateful to you for allowing me to make this statement. Let me wholeheartedly apologise that I was not able to set out these measures to the House first. I can provide the reassurance that you requested and I hope that hon. and right hon. Members across the House understand that these are extraordinary circumstances.
I want to take the opportunity today to set out for the House the next stage of our economic plan in response to the coronavirus. The coronavirus pandemic is a public health emergency, but it is also an economic emergency. We have never, in peacetime, faced a fight of an economic nature like this. I know that people are deeply worried. I know that people’s anxiety about the disease itself is matched only by their anxiety about their livelihoods.
In the Budget last week, I set out the first stage of our economic response with a £30 billion package to support people and businesses. I promised to do whatever it takes to support our economy through this crisis and that, if the situation changed, I would not hesitate to take further action. As the Prime Minister set out yesterday, we are now approaching the fast-growth part of the upwards curve. He has set out the next stage of our public health response; I want to update the House on the next stage of our economic response.
Let me begin by setting out for the House our overarching economic strategy. People should know that the objective of our economic policy remains clear and our resolve remains firm: we will do whatever it takes to protect households and businesses to get through this, and to make sure that the effects do not become permanent. As we develop our strategy, not just today but over the coming days and weeks, we will be guided by three principles. First, our response must be comprehensive. This national effort will be underpinned by Government interventions in the economy on a scale unimaginable only a few weeks ago. This is not a time for ideology and orthodoxy. This is a time to be bold—a time for courage.
I want to reassure every British citizen that this Government will give you the tools you need to get through this. We will support jobs, we will support incomes, we will support businesses, and we will help protect your loved ones. We will do whatever it takes.
Secondly, our response must be co-ordinated. We in Government are working hand in glove with the wider economic authorities. Domestically, that includes the Bank of England, the regulators, and the health response. And internationally, I continue to engage with my G7 and G20 counterparts to agree and facilitate a global response.
Thirdly, our response must be coherent. It would be easy, at a time like this, to rush into a response and measures that we found out later had been ill-considered. The single most important test we in this House must set ourselves is to make sure that the actions we take will, in the lives of ordinary people and businesses, make a difference. To apply those principles in practice, we will use fiscal action to support public services, households and businesses. The Budget last week set out the first stage, including our commitment to provide the NHS with whatever it needs. In the coming days, I will take further steps, with a particular focus on supporting people and individuals.
In response to the updated medical advice yesterday, I can take three immediate steps today. First, the Government will stand behind businesses small and large. I can announce today an unprecedented package of Government-backed and guaranteed loans to support businesses to get through this. Today, I am making available an initial £330 billion of guarantees, equivalent to 15% of our GDP. That means any business that needs to access cash to pay its rent, salaries or suppliers will be able to access a Government-backed loan on attractive terms. If demand is greater than the initial £330 billion I am making available today, I will go further and provide as much capacity as required. I said whatever it takes, and I mean it.
That support will be delivered through two main schemes. To support liquidity among larger firms, I have today agreed a new lending facility with the Governor of the Bank of England to provide low-cost commercial paper. To support lending to small and medium-sized businesses, I am extending the new business interruption loan scheme I announced at the Budget last week so that rather than loans of up to £1.2 million, it will now provide loans of up to £5 million, with no interest due for the first six months. Both of those schemes will be up and running by the start of next week. I am also taking a new legal power in the covid Bill to offer whatever further financial support I decide is necessary.
Some sectors are facing particularly acute challenges. In the coming days, my right hon. Friend the Secretary of State for Transport and I will discuss a specific potential support package for airlines and airports. Yesterday, I asked my Cabinet colleagues to urgently convene meetings over the coming days with business leaders and representatives in the most affected sectors to identify other specific opportunities to support them, including possible regulatory forbearance. I repeat: we will do whatever it takes.
Secondly, as well as access to finance, businesses need support with their cash flow and fixed costs. Following the changed medical advice yesterday, there are genuine concerns about the impact on pubs, clubs, theatres and other hospitality, leisure and retail venues. Let me confirm today that for those businesses that do have a policy that covers pandemics, the Government’s action is sufficient and will allow them to make an insurance claim against their policy. But many businesses do not have insurance, so we need to go further. I announced last week that businesses in the retail, hospitality and leisure sectors with a rateable value of less than £51,000 will pay no business rates this year. Today, I can go further and provide those businesses with an additional cash grant of up to £25,000 per business to help bridge through this period.
Additionally, I am extending this business rates holiday to all businesses in those sectors, irrespective of their rateable value. That means that every single shop, pub, theatre, music venue and restaurant, and any other business in the retail, hospitality or leisure sector, will pay no business rates whatsoever for 12 months, and if they have a rateable value of less than £51,000, they will now get a cash grant as well. I also announced last week that we would be providing £3,000 grants to 700,000 of our smallest businesses. To support their cash flow in these exceptional circumstances, today I can increase those cash grants to £10,000.
Taken together, on top of the unlimited lending capacity I have already announced, that is a package of tax cuts and grants in this financial year to directly support businesses worth more than £20 billion. That comes on top of the existing multibillion-pound package I set out at Budget, which included reimbursing small and medium-sized companies for the cost of statutory sick pay. Local authorities in England will be fully compensated for the costs of these measures, and the devolved Administrations will receive at least £3.5 billion in additional funding as a result, to provide support to businesses in Scotland, Wales and Northern Ireland. I repeat again: we will do whatever it takes.
Thirdly, I will strengthen our support for peoples and individuals. At Budget last week, I committed £1 billion to support the financial security of vulnerable people through a half-a-billion-pound boost to the welfare system and a half-a-billion-pound hardship fund for local authorities. Following discussions with industry, I can announce today that, for those in difficulty due to coronavirus, mortgage lenders will now offer a three-month mortgage holiday, so that people will not have to pay a penny towards their mortgage while they get back on their feet. In the coming days, I will go much further to support people’s financial security. In particular, I will work with trade unions and businesses to urgently develop new forms of employment support to help protect people’s jobs and incomes through this period.
Let no one doubt our resolve. When I said in the Budget last week that we will do everything we can to keep this country and our people healthy and financially secure, I meant it. The measures that I have announced today are part of a comprehensive, co-ordinated and coherent response to a serious and evolving economic situation. These are only the first steps, and I will set out the next stage of our response in the coming days. We have never faced an economic fight like this one, but we are well prepared. We will get through this, and we will do whatever it takes. I commend this statement to the House.
John McDonnell (Hayes and Harlington) (Lab)
There was an element of déjà vu about that statement. I thank the Chancellor of the Exchequer for providing us with an earlier copy of it. Of course, we recognise the immense threat that this virus poses to our country and the globe, and we want to work with him to ensure that we do everything we can to protect our economy and our people. But today, in some of our constituencies, people were being laid off—they were losing their jobs and their incomes, and their livelihoods are being threatened. People are worried, and I am disappointed that today’s package of measures does not really appreciate the urgency or the gravity of the situation for those individuals and their families.
Let us establish a principle throughout our discussions. To protect our people, the underlying principle must be that, wherever a person is sick, self-isolating or laid off from their employment, we will protect their income and give them security. I want to raise a number of questions about issues that the Chancellor failed to address and that I hope will be addressed urgently.
On those people who are sick, there is an urgent need for statutory sick pay to be available for everybody from day 1, and that means extending it to people on low pay, in part-time work and on zero-hours contracts, who at the moment do not qualify. Will the Chancellor now consider abolishing completely the lower earnings limit with regard to statutory sick pay, as called for by the CBI? May I also ask him to heed the call of the TUC and other groups to lift the overall level of statutory sick pay? The TUC has proposed that it should be raised to the level of the real living wage, and I think we should support that. Other countries are providing 100% protection of wages.
Other questions with regard to individuals remain unanswered. Will those workers who have been asked or required to self-isolate—teachers, health workers, nurses, carers and other essential public servants—be protected on full pay to ensure that essential services continue? Will the Government assure people of a right to work from home?
Other pressures felt by individuals relate to rents, mortgages and evictions. I really regret—I ask the Chancellor to consider this urgently this evening—that there was nothing in the statement to protect renters. It affects all our constituents. Will the Chancellor bring forward urgently now measures to protect renters, prevent evictions and enable rent holidays for those people unable to meet their costs? Will he put powers in the legislation now to follow the example of some other countries that have frozen or suspended utility bill payments and put that on a statutory footing because this is an emergency?
For those who have already lost their jobs, let us be clear: the level of and access to universal credit are unacceptable. The Chancellor has said that those receiving universal credit can receive an advance as a loan. This is pushing people into debt, some of them the poorest in our society. The Child Poverty Action Group has asked whether we can make that loan non-repayable as a grant. Can I urge him to consider that?
The Chancellor has said, and I welcome it, that he is going to bring the trade unions together to look at a more sustainable package. We need to do that within days, not weeks, and we will work with him to ensure that happens. I would cite other examples. In Denmark, the Government cover 75% of wages and companies cover 25%. It is true that workers give up some holidays in exchange, but there is a job guarantee for those workers.
We want financial support, but we want guarantees that these people, when this crisis is over, will have a job to go back to, particularly in those companies where there have been significant lay-offs. Unfortunately, we are now facing significant job losses, and a real sense of uncertainty for workers and businesses alike. I have to say that that uncertainty was made worse last night by statements with regard to the hospitality sector. I do not believe that the Chancellor’s statement today gives the clarity that is needed. Will he make it clear to the insurance companies that those in the hospitality sector—the pubs, the clubs, the theatres, the festivals—are closing on the instruction of the Government? In that way, most of them, even if they do not have “pandemic” in their insurance policies, will be covered.
I welcome today’s announcement of loan guarantees to businesses, but I notice in the small print—can the Chancellor clarify this?—that this is interest free for a period of six months only. I am not sure whether that gives the sufficient support and guarantee for the long term that many will want. I welcome the grants, but may I say to him that the response so far from a number of businesses has been that the scale of the grants needs reviewing? They are too small, and they do not relate to the costs that people are involved in at the moment.
I welcome what the Government have said about the business rates relief holiday, but last week the statement seemed to exclude nurseries and childcare. Can the Chancellor just clarify that that has been remedied now, because childcare and nurseries will be desperately needed in the coming period? A bit of concern has been expressed about the British Business Bank being asked last week to deliver the business interruption loan scheme. As of very recently there is little public evidence that the scheme has been established or developed.
I will turn quickly to individual sectors. On the aviation sector and other key transport sectors, I accept that there is a need now for support. I say gently, however, that I resent Mr Branson urging his workers to take eight weeks of unpaid leave, when he makes such a fortune, often by tax avoidance as well. If we are to give grants, loans and assistance to some of these sectors, we should consider whether to take an equity stake for the long term. That also relates to the rail sector. If any franchise fails, is there any planning to bring it under public ownership and management?
Another sector that has been mentioned—this is deeply worrying—is the fishing industry. It has been hit hard, particularly because of its inability to export. We have been told about the lack of insurance cover for boat mortgages. Can we look at that rapidly now to develop some form of legislative protection? Agriculture is now moving into the planting season. The sector was already facing a significant shortage of workers, but it now faces even bigger challenges. Will the Chancellor reassure the House that there will be support for agriculture throughout, because food supplies will be essential during this coming period, especially domestic food supplies?
I must also raise the issue of public services, which the Chancellor did not mention in any depth. The Opposition received well the commitment that whatever the NHS needs it will get, but can we be clear about the allocation of funding to enable testing to take place at scale? The £5 billion response fund did not earmark any particular funding for the NHS, let alone for testing. Clearly, the public now want reassurance that testing will be developed, and we need the funding. Also on the NHS, can the Government point to stronger steps that need to be taken to manufacture essential ventilators and provide personal protective equipment for frontline NHS workers? If we are harvesting our resources, Labour Members do not believe that we should be paying for private hospital beds at this time. Indeed, many of us believe that they should be requisitioned for the use of the whole community.
The overall system of caring for our population relies not just on the NHS but on social care. Will the Chancellor be absolutely clear now about the scale of funding that has so far been directed to social care, as there is uncertainty about that at the moment? What does he think is the best estimate for the level of funding that will be needed, given that we have already inherited 120,000 vacancies, and staff numbers may well dwindle because of the impact of the virus? In recent years, we have seen evidence that some care companies face threats to their financial viability. What plans have the Government developed to intervene if necessary in that sector? There is also pressure on family carers, who are relied on to support our social care system. We need proposals to support them financially as well.
One area of change that has been mooted is the possible closure of our schools. It is crucial that childcare support is provided in the event that any closures occur. We will work with the Chancellor on that issue and with local authorities, but it is crucial that children who depend on free school dinners receive support if the schools are closed. We cannot allow them to go hungry. School staff may be off for long periods and we would like an assurance that their incomes will be guaranteed. Pupils and students are being advised to study from home and most will require access to high-speed broadband. What will be done to ensure access to broadband for students? May I suggest to the Chancellor that it could be free? We all rely in our communities on the voluntary sector as well and it is being hit hard because of the temporary downturn in donations and staffing levels. What consideration has been given to grants to ensure that the voluntary sector can continue to carry out its important functions?
We need more clarity on the Barnett consequentials, and very quickly, because there is uncertainty about the scale of support that will be given to the devolved countries and regions.
With regard to international interventions, whatever people thought about Gordon Brown’s individual policies, in 2007 and 2008 he showed international leadership to tackle that crisis. I have expressed previously my disappointment that the Government did not act sooner in bringing countries together. I urge the Chancellor to follow up the teleconference with the G7 on Monday with engagement through the G20, the World Bank, the World Health Organisation and the UN, and to bring forward a global plan with his colleagues to ensure that we can give assurance not just to the markets but to those, particularly in the global south, who may well be hit hardest by this virus.
Rishi Sunak
I thank the right hon. Gentleman for the constructive attitude with which he approaches some of these issues. I very much welcome his desire to work with me to try to solve some of the pressing issues that face our nation.
I will try to answer as many of the right hon. Gentleman’s specific questions as possible, starting with financial security for our most vulnerable people. I wholeheartedly agree that this is a priority and should be a priority, which is why, in the Budget, we made significant changes to the operation of statutory sick pay, universal credit, and employment and support allowance to ensure that people had quicker and more generous access to a support system for them and their families. We have already invested £1 billion to provide that extra security, but of course we keep all these things under review. As I said, the next step of our plan is to focus on providing support to people, their incomes and their jobs over the coming days.
The right hon. Gentleman asked about insurance for the leisure sector. I can confirm that, after extensive meetings today between my hon. Friend the Economic Secretary to the Treasury and the insurance industry, the insurance industry will honour insurance contracts that would have been triggered if the advice had been to ban certain things, rather than it being advisory not to do them. That has been agreed and negotiated by my hon. Friend. I thank him for those efforts, and I thank the insurance industry for doing the right thing.
The shadow Chancellor asked, rightly, about renters. Of course, I announced measures today on mortgages. He is absolutely right that the biggest fixed cost that many families face will be their rent payment, and it is right that we have regard to that. I can tell him that my right hon. Friend the Housing Secretary will, in the coming days, make a statement with further measures to protect renters through these difficult times.
The shadow Chancellor asked about other countries and their experience, and about global leadership. He mentioned some specific examples of schemes. I can assure him that I am in touch with my counterparts across the G7 and the G20 to understand how schemes in other countries work. He mentioned, for example, employment support schemes in both Germany and Denmark. I say to him and to the House that, whatever package or scheme we come up with that we believe will provide the appropriate support, it is important that we can operationalise that at speed. The difference between our system and that of many other countries is that they have these systems already in place, so it is far easier for them to step them up quickly. We need to make sure we come up with a solution that can be delivered so that it makes a difference to people quickly, which is why I am happy to work closely with unions and business groups to see what will make the most sense.
On international leadership, I say to the right hon. Gentleman that it was widely noticed by other countries that last week, in this country, we saw both monetary and fiscal policy—the Government and the Bank of England working independently but in a co-ordinated fashion to provide significant support and confidence to the economy. That was acknowledged by people, including the International Monetary Fund, which noticed what happened here and pointed at it as an example for others to follow.
On the scale of our response, I ask the right hon. Gentleman to look at the analysis comparing the scale of the fiscal support that various different countries are providing. Again, I think he will find that the package of measures announced both last week and today shows that we have one of the strongest responses of anybody in the G7 as a percentage of GDP to the significant challenge that we face.
The right hon. Gentleman asked about the delivery of the loan scheme and it is right to focus on how it will be delivered. We have been working at pace over the past week to make sure that the loans can be delivered not by the British Business Bank, but by individual retail banks on high streets up and down the country. Again, because of the work of the Economic Secretary, that will happen by early next week: businesses will be able to walk into their local branches and request a business interruption loan that has been backed by the Government on these attractive terms. Again, we have to work with the systems that we have. We cannot let the perfect be the enemy of the good because we want to be able to deliver these schemes as quickly as possible to businesses up and down the country.
The right hon. Gentleman asked about support for a variety of sectors. I can tell him that I have urgently asked my Cabinet colleagues to convene roundtables and engagement with their particular industries to understand if there are specific measures we should be looking at, on top of the measures for airlines and airports that we can look to address in the coming days. All the sectors he mentioned will be covered by that.
I agree with the right hon. Gentleman: when it comes to providing support to larger companies, if the taxpayer is going to be put at risk in supporting those companies, it is right that the taxpayer is rewarded on the other side. That is a principle with which we also wholeheartedly agree. He can rest assured that, as we negotiate those situations, we will always protect the interests of taxpayers.
The right hon. Gentleman rightly asked about public services. Our No. 1 priority is to ensure that the NHS has everything it needs to get through this period. I made that commitment last week. I re-echo that commitment today.
On the Barnett consequentials, the right hon. Gentleman will have seen this week that we released the full amount of the Barnett consequentials resulting from the Budget package in advance to all devolved authorities. Today, I announced the overall quantum. Again, we will quickly release those, in advance of those payments being released in England, to the devolved authorities, so they can plan appropriately.
The right hon. Gentleman can rest assured that all the specific public service issues he mentioned, whether school meals, schools and social care, are under active and urgent consideration.
I will end on this point. Our public servants, in particular those working hardest in our NHS right now, deserve nothing but our support at this difficult time. I want them to know, and I want the country to know, that we will do whatever it takes to get through this.
Mel Stride (Central Devon) (Con)
These are truly shocking times and a great weight lies upon the shoulders of my right hon. Friend the Chancellor. I hope it is felt right across the House that we wish him every success in his endeavours to steer us through this crisis. He has come forward with a huge response to the current situation, which I know will, in many quarters and businesses up and down the country, provide some reassurance. There are, however, inevitably some areas on which there is still work to come, not least in terms of the employment support package. I note the fact that he will shortly be engaging closely with trade unions and businesses to flesh that out. May I urge him to do so as quickly and promptly as possible? Does he know at this stage when the conclusions of that exercise may be reached, so that we can provide vital reassurance to employers and employees who fear for their jobs up and down our country? This is a time in our history where not just days, but hours matter.
Rishi Sunak
I thank my right hon. Friend for his thoughtful support. I can tell him that we are working on those proposals urgently and plan to have answers for both him and the House in the coming days, ideally next week, with an early thought of what we can do. As I said, designing these schemes will take an appropriate amount of diligence and care. That is what we are focused on urgently as we speak. He is right: this is about hours, not days and weeks.
Alison Thewliss (Glasgow Central) (SNP)
I thank the Chancellor for the action and the extra money that he has announced this evening. I put on record my thanks to health staff, volunteers and everybody working at the forefront of this crisis. I also mark my sadness at the second death that was recorded in Scotland today.
We want to work across the economy and across society, because fundamentally this is about people’s lives. The Chancellor is right that nothing should be spared when it comes to that. Can he tell me precisely what the Barnett consequentials will be from today’s announcement? He says that the Scottish Government knew in advance. I do not make the point to be party political, but my understanding is that the Scottish Government were only notified by letter at 5.30 pm yesterday of the previous set of Barnett consequentials from last week’s Budget. [Interruption.] I hear hon. Members saying that that has been the same for Wales.
The Scottish Government want to act swiftly. They must not be behind the curve of what England is doing. The Chancellor must pick up the phone to Kate Forbes, the Scottish Cabinet Secretary for Finance, to let her know exactly what is coming, so that she can take action for Scotland’s businesses and individuals across the country.
The Chancellor mentioned that the loans will be on attractive terms. Can he tell us more details? Businesses will be nervous about taking on more debt at this time, and interest free for six months is perhaps not good enough for businesses that are struggling and questioning their very future. His flexibility on the next steps is also welcome, but we expect those measures to come before the House if at all possible.
Will the Chancellor take a stake in the airlines to guarantee that money for the future? In any intervention for airlines, will he make sure that staff are protected first, including support staff in airports and in the supply chain, not just airline staff directly? They are all worried about their jobs.
Cash grants for small businesses are welcome, but I gently suggest that the £3,000 announced last week was not enough. Today’s announcement of £10,000 shows how short that was. The hospitality sector in particular needs urgent clarity about what is going to happen for events, for pubs and right across the sector. The Government need to be absolutely clear: if people are to stay away from pubs, pubs need to know that and have the Government’s backing if they close. That applies across the hospitality sector, including for hotels and lots of small businesses in the supply chain.
The Association of British Insurers has suggested that many businesses will not have a policy that covers pandemic. Will the UK Government stand as an insurer of last resort, as Professor Sir Charles Bean suggested at the Treasury Committee today, saying,
“Big early action is better than half-hearted action that’s late”?
I urge the Chancellor to think on that. Can the insurers cope if they are asked to pay out on all those policies? Will the Government stand behind the insurers if need be?
What protection has been given to pregnant women around maternity entitlement? Lots of women have been asked to take their maternity leave early, which will affect how long they can stay off at the end. They need to know that the Government will back them on that and that they will not lose out on their maternity leave because of the coronavirus.
The Chancellor made no mention of private renters, particularly young people who are more likely to be in insecure employment. He is giving a break to those paying mortgages, lots of which are buy-to-rent mortgages where people rent the accommodation. If the mortgage holders are getting a break, that must be guaranteed for renters as well. It must be passed on, and passed on quickly. If the Chancellor looks at Twitter, he will see that people around the country are losing their tenancies and do not know whether they can get a new one.
There has been talk in the US of $1,000 being given to Americans, and in Italy €500 being given to the self-employed. Will the Chancellor consider such direct schemes for individuals who may be struggling to cope? Will he also look at the situation for asylum seekers and those with no recourse to public funds who cannot claim benefits and are particularly vulnerable? The services, food banks and voluntary action that they rely on will disappear. They need direct payments as well if they are to live through this crisis.
I note that France is moving to the direct payment of bills. Will the Chancellor look at that measure? That is a different mechanism that stops money being taken out of people’s pockets, rather than putting money into them. Has he spoken to the energy companies about that?
Turning to the vulnerability of people in the economy just now, the Fraser of Allander Institute has said that only one in four under-25s has enough savings to cover one month of income. The under-25s are incredibly vulnerable, so will the Chancellor consider specific measures to tackle issues for those young people? Only 42% of households in the bottom income decile have enough savings to cover one month. People will not get through this crisis with the money they have in the bank, because a lot of them have no money in the bank. He needs to consider how he will ensure that people can put food on the table. That need is particularly pressing for families, because if the schools do close and parents cannot work, there will be no money coming in. He needs to think about how those families will put food on the table for those children during this extended period.
I agree with everyone who has said that statutory sick pay is woefully inadequate to deal with this crisis. The Government have suggested that people should apply for universal credit, but they seem to be forgetting that for many people universal credit is far less generous even than statutory sick pay, so will the Chancellor urgently increase the amount that people can get through the universal credit system? Will he uprate that so that people can get enough money to survive the crisis? Will he consider extending the period for universal credit advances, or ideally get rid of the advances and pay people straight away? Will he ensure that the Department for Work and Pensions looks carefully at the implications of people claiming universal credit for their entitlement to legacy benefits, because people might lose out on their legacy benefits if they jump into universal credit just now? Will the Department protect that for all claimants so that they do not lose out in the long term?
This is a crisis. I welcome all action that the UK Government will take on this, but the questions this evening will be legion, and people will have so many questions in the days ahead. I ask the Government to listen and to react as quickly as possible to all the questions that honourable colleagues will raise this evening, and in the weeks and months ahead.
Rishi Sunak
I thank the hon. Member for her comments. I can reassure her that I am listening. I welcome all the suggestions that she has made, and indeed all those that other hon. Members will make. We are listening intently to hon. Members, and to businesses and others, to ensure that we provide the support required.
Let me answer the hon. Member’s specific questions. The Barnett consequentials resulting from today’s package will be about £3.5 billion. I understand that my right hon. Friend the Chief Secretary to the Treasury will be speaking to the Scottish Finance Secretary tomorrow to explain in more detail how that will work. Earlier this week we released the Barnett consequentials to the devolved authorities before the money has been drawn down in England, as would be typical, in order to provide advance on the Barnett consequentials to all devolved authorities in recognition of the circumstances that everyone is grappling with, so that they can plan appropriately. I hope that will be welcomed.
Obviously, it would not be appropriate for me to comment on specific interventions in any particular company, whether an airline or anything else, but I agree with the hon. Member that in general we are interested in protecting people’s jobs. When I stand here and talk about supporting businesses, I am keen to support businesses because that is the best way to protect jobs, and ultimately that is the best way to protect people.
The hon. Member asked about cash grants. In thinking about the scale of the grants and how significant they might be, let us take the £10,000 grant available for anyone currently in receipt of small business rate relief. The typical rateable value on one of those properties would be approximately £7,000. That is a good proxy for a year’s worth of rent. A £10,000 cash grant is therefore reasonably significant in covering what is probably a business’s biggest fixed cost. When we look at what the average income of one of those smaller businesses might be, again we see that it will be significant.
The hon. Member talked about pubs and the leisure sector. Not only will there be a business rates holiday for the sector for the next 12 months, but for all businesses in the sector, regardless of their rateable value, there will be a £25,000 cash grant for businesses up to £51,000.
The hon. Member asked about insurance. The statement is welcome on insurance. With regard to retrospectively changing insurance policies, she rightly identified that that would most likely cause solvency issues with insurance companies, so it is perhaps not the most appropriate course of action, which is why we have several other measures for providing support directly to businesses in those circumstances. She will probably be aware that very few businesses actually have the requisite insurance in any case, so although the steps set out today are welcome, it is important that we think more broadly about direct support.
I welcome the hon. Member’s question on maternity pay, which I will discuss with my right hon. Friend the Secretary of State for Work and Pensions and reflect on. With regard to renters, as I said in my earlier answer, my right hon. Friend the Secretary of State for Housing, Communities and Local Government will shortly announce further measures to protect renters.
The hon. Lady talked about other countries, and about fiscal responses and individual measures. Every country is doing this slightly differently, but, broadly, are trying to do the same things through different means. I think that the best way to judge us is by the total scale of our fiscal response, and on that metric, as a percentage of GDP benchmarked to nearly all developed countries, we have what is to date one of the most comprehensive and significant packages of scale—which, as I have said, underlies our commitment to doing what it takes to get the country through this.
Mr David Davis (Haltemprice and Howden) (Con)
I strongly welcome the Chancellor’s enormous loan and guarantee package, but he himself recognised that he is supporting the liquidity of businesses rather than their long-term viability. We want to see employment protected, so may I ask him to fund business not just in ways that enable the maintenance of employment, but in ways that actively incentivise it? It is not the same thing. Block grants will not do it. May I also ask him, when he does that, to do more than just taking the route of sectoral support packages? If he takes that route, tens of thousands of small businesses will fall through the cracks.
That, unfortunately, means an incredibly tailored system. The Chancellor will have to design rather intricate mechanisms to ensure that we pay people properly, which may involve small claims courts, the insurance business and British chambers of commerce and the like. I ask him to consider doing that, however. What he has done today is important in terms of maintaining liquidity, but his main aim must be to maintain the viability of the British economy.
Rishi Sunak
My right hon. Friend has made a good point. I believe that providing liquidity now ensures sustainability for the future, but he is right to identify the further steps that are needed to provide support on fixed costs such as employment, and preserving and incentivising that employment. This is work that we are undertaking as a matter of urgency.
Rachel Reeves (Leeds West) (Lab)
For those who are currently off work on statutory sick pay or are self-isolating for public health reasons, who are laid off because there is no work or who are self-employed or low-paid, there is nothing at all in the Chancellor’s package of measures. The Chancellor says that these matters are under review. As a matter of urgency, will he at least increase statutory sick pay to the level of the national living wage, and come back to the House with a package of support that ensures that workers will not be financially penalised for doing the right thing, and will not be unable to pay their bills and rent and put food on the table?
Rishi Sunak
We have put £1 billion into the welfare system to provide extra financial security for those people, to speed up both access and the generosity of all those benefits.
Harriett Baldwin (West Worcestershire) (Con)
I thank the Chancellor and his team for all that has been announced today. I know that those in the retail hospitality sector in my constituency will be very pleased to hear about it.
There is a sector of the retail market that is doing incredibly well, and that is the supermarkets. Many of my constituents are worried because they rely on home deliveries from supermarkets. Can the Chancellor update us on what talks he and his colleagues are having with the supermarket industry about increasing capacity for home delivery?
Rishi Sunak
That is an excellent point. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is engaged in urgent talks with supermarkets to ensure the security of our food supply and to improve accessibility, particularly for those who may now be at home.
Jess Phillips (Birmingham, Yardley) (Lab)
I simply want to ask the Chancellor whether he could live on £94.25 per week. It is a simple question: has he ever lived on that, and could he live on that, because that is what most of my constituents are currently having to live on?
Rishi Sunak
We believe in a strong safety net during a short period so that people can get through this, which is why we have strengthened that safety net with £1 billion of extra investment to increase generosity and accessibility.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I commend my right hon. Friend the Chancellor for his bold measures today, which will encourage many small businesses to believe that the Government are on their side. There is more to do, I know. Can I also encourage him, though, in his statement to come, on further employment measures to bear it in mind that the most important thing we can do is to do everything we can to keep people in employment? That will help to deliver growth.
One area I want to raise with my right hon. Friend, which has not really been touched on, although I think the shadow Chancellor raised it, is the voluntary sector. The Centre for Social Justice has done some quick work on this and come to the conclusion that the smallest elements of the voluntary sector, which have no reserves, are going to lose about £400 million during this next few months, and they are going to be the ones that are called upon most for support in the community for those who suffer. Can I please ask him to look at this very carefully and see what we can do to give them that cash aid?
Rishi Sunak
My right hon. Friend knows better than most the value of making sure that people have the security of a good job, and I commend him for all his work in that regard. I agree with him wholeheartedly. My right hon. Friend the Communities Secretary is talking already to the voluntary sector and we stand ready to provide the support that may be required.
Edward Miliband (Doncaster North) (Lab)
I recognise, as I am sure the whole House does, the Chancellor’s wish to get any employment support scheme right, but he will recognise, as the shadow Chancellor said from the Front Bench, that people are facing redundancy right now. May I suggest two things that he can say tonight to help ward off those redundancies? The first is that he accepts the principle that Government should cover a substantial proportion of people’s wages, because it is in their interests and those of the economy and their businesses. The second is that he undertakes to come back not next week but by Friday of this week with a clear plan developed with unions and businesses.
Rishi Sunak
I say to the right hon. Gentleman that it is more important that we get this right than rush to things that will not work, but he can rest assured that we agree wholeheartedly with the ambitions of what he says, but delivering them and getting it right are vital and that is what we are working on doing.
George Freeman (Mid Norfolk) (Con)
I congratulate and thank the Chancellor on behalf of the people in Mid Norfolk for a coherent and comprehensive package, in particular the support on rates and mortgages. In my rural and quite fragile economy, it is the pubs, the high streets, the small businesses, tourism and farming, and food processing that are the backbone of the economy. May I press him on the insurance point? The policies of many of my local employers simply do not cover liability for epidemics. Would it not be sensible to look at reinforcing the insurance industry, which has the wherewithal to deliver the support, so that those that have made money in the good years can help companies that really need it in tough times?
Rishi Sunak
I appreciate the point my hon. Friend is making. The steps today on insurance are welcome, but he is right to identify that retrospectively changing the situation that insurers would have reserved against could have a very significant impact on their solvency, which would send a ripple effect throughout the insurance market. That is not something that any of us would want to see.
Ms Angela Eagle (Wallasey) (Lab)
The Chancellor must surely recognise that those on statutory sick pay are being asked to protect the rest of us, but take only £96 a week in income and live on that, and that those on universal credit, if they can access the system at all, will be asked to live on £74 a week. Millions of people are simply not eligible for either of those deeply flawed structures. He has to do something fast. He has to do it quickly. Instead of talking about the £1 billion he has already put in, will he now realise that he has to move fast to reassure people that if they do the right thing they will not suffer and that they will be able to put food on the table and maintain their housing and their children’s meals?
Rishi Sunak
We have provided half a billion pounds specifically to local authorities to provide extra support, particularly to help people with housing costs, notably council tax. That will make an enormous difference to people on the ground.
Mark Eastwood (Dewsbury) (Con)
Many mortgage payers in my constituency will welcome the three-month holiday announced today. However, can the Chancellor confirm whether this will be implemented automatically by the banks and mortgage lenders, or will borrowers need to apply?
Rishi Sunak
Borrowers can speak to their mortgage provider and, owing to the work of my right hon. Friend today, they should receive a three-month mortgage holiday, depending on their circumstance as explained, but it should be reasonably automatic thereafter.
Several hon. Members rose—
Sir Edward Davey (Kingston and Surbiton) (LD)
Our economy is suffering a heart attack, one deeper and bigger than in 2008, so the Chancellor has a serious responsibility and he deserves constructive engagement from everyone in this House, including my party. His main task is to ensure that there is confidence among the business community and the British people. I have to tell him that although he has made a good start, this is still very much a work in progress. His package for the business sector was large, but may I urge him to say far more about the loan terms he is putting forward? Many small businesses will be very worried about taking on this debt. May I also urge him to go much faster to give confidence to the ordinary people who are suffering in our constituencies?
Rishi Sunak
I thank the right hon. Gentleman for his constructive attitude, and I look forward to working with him. The loan terms will be interest-free for six months. Because of the liquidity that has been provided by the Bank of England, they will be incredibly cheap, and they will be available on a rolling basis for commercial paper, so they will be loans that are accessible and very valuable to businesses. They will be ready from next week.
John Redwood (Wokingham) (Con)
I am delighted that the Chancellor recognises the need for burden-sharing on employment costs in badly affected sectors such as tourism, travel and hospitality, but will he also make sure that there is a package for the self-employed, because some of those people are losing a large amount of their business, too?
Rishi Sunak
My right hon. Friend has written about the importance of employment support, and I look forward to getting his thoughts on those measures.
Ms Karen Buck (Westminster North) (Lab)
Half of my constituents rent privately—that is the highest proportion in the country. A quarter of all Londoners rent privately, and 13 million people across the country rent privately, with a third having no savings whatsoever. Will the Chancellor assure me that when we have the statement from the Housing Minister, there will, in addition to any legislative change to protect renters, be money on the table to help people on low incomes and in insecure employment to pay their rent, so that this crisis does not mean that they also get into debt and risk losing their homes?
Rishi Sunak
We very much recognise that rent is a significant portion of most household bills, which is why the Housing Secretary will shortly be outlining measures in this regard.
Paul Holmes (Eastleigh) (Con)
The measures announced by the Chancellor should be welcomed, but many of my constituents who are self-employed are worried because their cash flow has stopped now. When can we expect further announcements on how we are going to help these people? Will he consider extending the loans he has made available to businesses to cover this category of people?
Rishi Sunak
I can confirm to my hon. Friend that the loans available already will be available to those who are self-employed and that many of them, those who do have small properties, will benefit from the business rate reliefs and grants too.
Sammy Wilson (East Antrim) (DUP)
My party also wishes to work with the Government on ensuring that we get through this crisis as easily as we can. Redundancies are already starting across a range of industries in Northern Ireland. It is important that if the Chancellor is coming with the next step, it addresses the issue of how we keep people in employment and how firms are supported. I understand that he wants to get this right, but he also has to get it done.
Rishi Sunak
I can tell the right hon. Gentleman that we will get it done, we will do it at pace and we very much agree that it is important to protect people’s jobs. That is the security we want to provide.
Rehman Chishti (Gillingham and Rainham) (Con)
I very much welcome the Chancellor’s statement and all that the Government are doing to support individuals and businesses in my constituency. I have a specific point for him that has been raised with me by the chairman of Gillingham football club. They are in league 1, but this also covers clubs in league 2. A lot of the matches for those clubs have been postponed. They rely on matchday income to support them. What will be done to work with those smaller football clubs and organisations to ensure that their Her Majesty’s Customs and Revenue payments are dealt with adequately and that they are given soft loans over a certain period to ensure that they can get through these challenging, difficult circumstances?
Rishi Sunak
My hon. Friend’s football club, like many others, will be eligible for the business rates relief measures and grants that I have announced today. On HMRC, we activated Time to Pay last week, and there are now 2,000 specific, dedicated HMRC officers ready to take the calls of businesses such as Gillingham football club, in order to provide exactly what he suggested: a deferral for their tax payments and an agreed schedule for paying them back.
Mr Kevan Jones (North Durham) (Lab)
Yesterday, the Government announced measures for the hospitality industry. Businesses are laying off people today, throughout the country and certainly in County Durham, where I have spoken to businesses this afternoon. It is clear that the Chancellor does not have a clue how ordinary people live. They do not have access to savings and they do not have access to trust funds or independent wealth; they rely on what comes in each week. I urge him very strongly either to ensure that benefits are paid from day one, or to bring in some system that allows the Government to subsidise wages directly for some small businesses.
Rishi Sunak
It is because we care deeply about the financial security of all people that we want to work hardest to protect their jobs. That is the way to help working people in this country. We have strengthened the welfare system, and the measures that we have taken today will increase the likelihood that we can preserve those jobs. We know that there is more to do.
Henry Smith (Crawley) (Con)
I very much welcome the package of measures that the Chancellor announced this evening, but when does he expect to be able to give some more detail on support for the aviation industry? Virgin Atlantic, easyJet, British Airways and Gatwick airport in my constituency are suffering deeply.
Rishi Sunak
I know that my hon. Friend knows those businesses well. He should rest assured that we are already in contact with them, through both the Treasury and the Department for Transport. As I said, we will work with them as quickly as possible to put in place what measures are necessary.
Brendan O'Hara (Argyll and Bute) (SNP)
This afternoon, Lochfyne Langoustines, which employs 20 people in the village of Tarbert, told me that it did not have a single UK or export sale today. Soon, the company’s boats will be tied up, processers will be laid off, and the business could close. The far east markets are beginning to reopen and there is a glimmer of hope, so will the UK Government work with the Scottish Government to help to arrange cargo flights to get into the reopening markets as soon as possible?
Rishi Sunak
I am happy to ask my right hon. Friends the Secretary of State for International Trade and the Secretary of State for Environment, Food and Rural Affairs to have a look at that.
Alun Cairns (Vale of Glamorgan) (Con)
I pay tribute to my right hon. Friend for the scale of the package that he has announced, and I recognise the significance of the Barnett consequentials that will come from it. Does he agree that simplicity and commonality are key features? It was only late yesterday that the Welsh Government matched the business rate package, which left—[Interruption.] It left many businesspeople in my constituency anxious before the support was made available. Does my right hon. Friend recognise that commonality will be an important theme?
Rishi Sunak
My right hon. Friend makes an excellent point: a simple, common message across our Union would make an enormous difference to people everywhere.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I am disappointed to hear the tone from the right hon. Member for Vale of Glamorgan (Alun Cairns). I do not doubt what the Chancellor and the Chief Secretary have said about the devolved Administrations and what they are trying to do to give them information, but I must tell the Chancellor that it is not coherent and it is not working. He knows that getting cash to the frontline—to businesses and individuals—is absolutely mission-critical and time-critical at the moment, so will he work with the Administrations so that they can make future announcements together, so that businesses are not confused, people are not scared and we do not have further chaos? That has not happened today. The Welsh Finance Minister has made it clear that she would do that, but the Welsh Government did not have the information. Can we sort that out please, as a matter of urgency?
Rishi Sunak
I thank the hon. Member for his comments. As I said, the Chief Secretary will talk with all his counterparts in the devolved Administrations to ensure as co-ordinated an approach as we can achieve.
Robert Courts (Witney) (Con)
I warmly welcome the package that has been announced today, but my constituency is home to one of the largest concentrations of self-employed people in the country. Will the Chancellor please commit to looking at what further help might be given for them? Will he also please look at A2 properties, which do not currently receive business rates relief, and see whether some of those businesses—such as estate agents on the high streets—can be helped?
Rishi Sunak
I know that my hon. Friend is a champion of the self-employed. Some of the measures announced last week at the Budget will benefit them, as will, indeed, some of the loan and other grant measures announced today, depending on their circumstances, but my hon. Friend is right and we will of course keep an eye on that issue as we develop these packages.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The difference with this crisis is the profound effect it is having on human behaviour. The Chancellor has acknowledged that the big missing piece from the package announced tonight is direct financial support for workers who are laid off as a result of the advice that the Government have given to the country, so will he commit now—in principle if he cannot give the number—to bringing forward a package of support for a significant proportion of the wages of those who have been laid off as a result of this crisis?
Rishi Sunak
I have already committed to that urgent piece of work that we are undertaking. We have already improved the financial security available to people who find themselves either ill or off work, as a result of the £1 billion invested last week in these measures.
Mrs Natalie Elphicke (Dover) (Con)
At a time of national emergency and national need, Dover once again stands ready to do its duty. The Port of Dover, the hauliers and the ferry companies will be moving the goods, medicines and resources that are needed to keep our country safe and fed. Will my right hon. Friend assure the House that the port, transport, ferry companies, Border Force and all the hard-working local workers in my constituency will be given the necessary financial and practical assistance so that they can do their duty for our country?
Rishi Sunak
My hon. Friend is absolutely right to highlight the vital importance of our ports, particularly Dover. They are conduits for trade and everything else that our country needs at this critical time, and, of course, we stand ready to listen and hear what they need.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Last night, a constituent in the hospitality trade contacted me to express concern at the Prime Minister’s measures and to ask what could be done about them. Today, she emailed me to say that she had been made redundant and to ask how she could pay her rent. The Chancellor does not seem to grasp the scale of the fear, the uncertainty and the desperation in the country now. Will he guarantee to me now that every renter will have the means to pay their rent, and every small business the means to pay their staff?
Rishi Sunak
It is because of what was announced yesterday and the particular impact on the hospitality sector that today we have announced a series of steps of considerable support for that sector. As I have already said, when it comes to renting, the Secretary of State for Housing, Communities and Local Government will shortly be announcing measures to protect renters in these circumstances, and we have strengthened the safety net, the security, for people to fall back on.
Sir John Hayes (South Holland and The Deepings) (Con)
In amplifying the point made by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), will the Chancellor specifically say whether the charitable sector will be eligible for both the rate holiday and the grant funding? It is critical that we help those whose aim, purpose and mission is to help others.
Rishi Sunak
Most charities are already eligible for 80% charitable rate relief, but they will benefit from the new enhanced retail rate relief at 100%.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Chancellor has talked about courage, but I will tell him what takes courage: fighting this pandemic on the frontline without adequate protective clothing. Will he commit right now to doing whatever it takes to ensure that every single frontline healthcare worker has the protective clothing they need if they are working exposed to this virus?
Rishi Sunak
My right hon. Friend the Health Secretary is working around the clock to support our healthcare workers to have everything they need to do the vital job that they are doing for us. They will get whatever support that they require.
Mr Mark Harper (Forest of Dean) (Con)
I welcome the scale of what the Chancellor has announced. It is up to the mark. Some of his specific measures will be welcomed by constituents who have contacted me, but may I press him a little on the employment support package? I recognise the importance of coming up with a package that is deliverable, but I fear that if he is unable to say anything more urgently, he needs to give businesses the confidence to keep those employees employed, because some of them will be facing massive reductions in cash flow immediately. Will he look at what he can say quicker than next week to give them the confidence that they will be supported in due course?
Rishi Sunak
I very much appreciate the strains that business cash flows are under, which is why, today, we have already taken steps with the announcement of new cash grants of £10,000, £25,000 and an extension of the business rate holiday to thousands more businesses.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The health action that is being put in place is essential to save lives, but does the Chancellor accept that that also means that some of the jobs that are going this week and the redundancies that are being made will not come back in a hurry, because many hospitality, leisure and tourism jobs simply cannot be done at a social distance? Does he accept that there is a gap between the employment support package that he is rightly working on, I hope, as fast as possible and the welfare support that is simply not adequate for the huge numbers of people who are going to be urgently losing their jobs and who will be terrified of losing their homes as well?
Rishi Sunak
We have strengthened the security and the safety net for those in that situation, but the right hon. Lady is right that we are urgently working on measures to do more.
Aaron Bell (Newcastle-under-Lyme) (Con)
I asked for more firepower at half-past 4 this afternoon, and it is fair to say that the Chancellor has delivered. However, a number of businesses whose entire model has been undermined, such as village pubs and restaurants, are facing a very uncertain year. On that note, may I ask him what he proposes that they should do? Does he welcome the announcement by my right hon. Friend the Secretary of State for Housing, Communities and Local Government that such businesses can now operate as takeaways, which will help to solve some of the problems of self-isolation as well?
Rishi Sunak
My hon. Friend makes an excellent point about the Secretary of State for Housing, Communities and Local Government and what he has done. I think that it will make an enormous difference, as will the cash support that we have provided today to pubs and restaurants in his constituency and elsewhere across the country.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
This is a welcome step in the right direction—there is much to welcome in the Chancellor’s announcement—but the family reliant on a zero-hours-contract hospitality worker’s salary or the self-employed tradesman whose cash flow has dried up want to know how this money will reach their bank account. What prevents the Chancellor from introducing a coronavirus universal basic income in his package of new measures which, in itself, would give confidence to thousands of Welsh workers and beyond?
Rishi Sunak
We have already taken steps to strengthen the safety net that the right hon. Lady has mentioned in particular. They will be eligible for those enhanced packages, and beyond that, we are looking to do more, as she knows, in the employment support field.
Tim Loughton (East Worthing and Shoreham) (Con)
These measures are indeed bold, and will provide practical support. I particularly look forward to further information about renters and measures for the childcare and nursery sector, which was generally omitted from the Budget last week and is in a fragile state. The hospitality industry, which the Chancellor rightly singled out—it is our third largest industry—is laying off people, and the number of customers has absolutely collapsed. I am told that they are approaching banks and being told, “We may be able to get something for you in April.” Can he instil a sense of urgency in the banks and make sure that the grants from central Government are immediate so that people do not have to wait for them, which could make the difference to their being there in a few weeks’ time or not?
Rishi Sunak
I can tell my hon. Friend that the grant schemes are being delivered in the coming weeks. Businesses will receive a letter from local authorities. My right hon. Friend the Secretary of State for Housing, Communities and Local Government is doing that work at pace. With regard to the loan schemes, that will not take until April—they will be ready to access for business from the start of next week.
Beth Winter (Cynon Valley) (Lab)
The Chancellor says that we have to do whatever it takes, and I completely agree with him, but that must apply to everyone in the UK. I cannot believe that every step of the way we, the fifth richest nation in the world, have to battle for the poorest and those who are struggling the most in our communities, including in my constituency—homeless people, those who do not qualify for statutory sick pay, private renters and families on low incomes. When will we stop debating and start the action that is desperately needed?
Rishi Sunak
I refer the hon. Lady to the measures in the Budget last week, particularly on homelessness and rough sleeping. We announced £640 million to build 6,000 more units and to provide support for substance abuse support services, once people are off the streets, to help them tackle their long-term addictions. That money will make an enormous difference and build on the good work of the Secretary of State for Housing, Communities and Local Government.
Greg Clark (Tunbridge Wells) (Con)
It was not possible for ordinary businesses and working people to anticipate the scale of the most severe public health crisis for 100 years, so does the Chancellor accept that for many businesses the nation has to act, not so much as a lender of last resort, but as a collective insurer of last resort, meeting their unmet operating costs if they are to keep people employed and inoculate against economic contagion?
Rishi Sunak
My right hon. Friend is right to highlight the need to provide support for businesses with their fixed costs, rather than their variable ones. That is what we need to help bridge through—the cash grants today related to rateable value, with reference directly to rent payments—but he is right that other fixed costs are people, which is why we are working up measures in that area.
Nick Smith (Blaenau Gwent) (Lab)
The measures in the Red Book are nowhere near enough. For families in need, can statutory sick payments be available from day one, for all workers when they are sick, and can it be set at the level of the national minimum wage?
Rishi Sunak
As a result of the actions of my right hon. Friend the Secretary of State for Work and Pensions, SSP is available for those who are eligible for it from day one. Regulations are being laid to that effect, and employment and support allowance will also be available from day one, rather than day eight.
Damian Green (Ashford) (Con)
The measures announced by my right hon. Friend are extremely welcome, and he should be congratulated on them. For many people, including freelancers and those working in the gig economy, the most vital thing over the next few weeks will be some kind of guarantee of continuing income, so they can know that they can continue to pay their bills. Will those measures and the ones that he says are to come over the next few days guarantee that vital help?
Rishi Sunak
Many of the workers in the gig economy will benefit from statutory sick pay, depending on their exact contractual relationship with their employers, but the measures that we undertook last week in the Budget will provide direct support to those people.
Catherine West (Hornsey and Wood Green) (Lab)
What contingency will be put aside by the Treasury to assist in recruiting more social care workers, who are desperately needed to look after people in their homes as they fall ill?
Rishi Sunak
As I reiterated last week, we will provide whatever is required to public services. My right hon. Friend the Health Secretary is working with the Local Government Secretary to understand exactly what is required in social care.
Huw Merriman (Bexhill and Battle) (Con)
I welcome the package that the Chancellor has laid out and all the work that he has been doing. He said that he will look at other things over the coming days. May I please ask him to consider pre-schools and nurseries? They pay business rates, so will not receive the £10,000, but they are not within the category of hospitality, retail and leisure. Mine have been in to see me today and they are very worried. It would be awful for the very people that rely on them—the parents. Will my right hon. Friend consider that ask?
Rishi Sunak
I thank my hon. Friend for his comments and am happy to look at what he is saying.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Many of my constituents are freelancers. One wrote to me unable to pay his rent or bills in the next couple of weeks. That is how urgent the situation is. Can the Chancellor give any comfort tonight for people who are very worried? They have been laid off today, have no ability to pay the bills and their freelance work has dried up. We are told that we have to wait for an answer from the Housing, Communities and Local Government Secretary. The Government have known that this was coming. Where is the planning? What answer does the Chancellor have now?
Rishi Sunak
For those people, the measures that we took last week will already start to help from day one. The Work and Pensions Secretary has already put in place support to make sure that access to the security that they need is both faster and more generous than it was.
Caroline Nokes (Romsey and Southampton North) (Con)
The events industry is not only highly seasonal but full of people working on a self-employed basis. Given that this season has pretty much been wiped out, what reassurance can my right hon. Friend give the industry that he is looking to its needs?
Rishi Sunak
I am happy to look specifically at the issue that my right hon. Friend has raised, but the measures that we took last week will provide immediate support to many of her constituents in that situation.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I was contacted today by a constituent who is self-isolating and has underlying health conditions. She was trying to get a food delivery, which she vitally needs. Tesco could only do it within 10 days, while other suppliers would take three weeks. There is clearly a massive issue, probably a combination of stock levels and delivery logistics. Will the Chancellor do whatever it takes to work with the supermarkets and logistics companies? There are opportunities to get other people into short-term employment if this is done right and quickly, so that people get the supplies that they need.
Rishi Sunak
The hon. Gentleman is right that the security of our food supply and deliveries is critical. My right hon. Friend the Environment Secretary is already having those conversations and has already taken steps on delivery curfews to ensure that deliveries can continue and to maintain the security of those supply chains.
Steve Brine (Winchester) (Con)
Today is a very good part 1; the Chancellor would be the first to admit that it is part 1—he obviously has a lot of other ongoing workstreams. I do not know what he has done with the mortgage lenders, but so many of my constituents and people across the country will be incredibly pleased about the three-month holiday.
The second biggest outgoing for thousands of my constituents is probably their train season tickets. Right now, they are paying for a service that they are not getting—some would argue that they have been barely getting it for a long time. They are currently paying for a service they are not getting at all and are not able to use at all. Will my right hon. Friend use whatever influence he did with the mortgage lenders to lean on the train companies to show some humanity to their customers right now? Frankly, those companies are not in their customers’ best books already.
Rishi Sunak
My hon. Friend is always a champion of his commuting constituents. I am happy to have that conversation with the Transport Secretary to see what we can do to encourage companies—whether mortgage companies or others—to help people through this difficult time.
Stephen Timms (East Ham) (Lab)
For somebody who is self-employed, self-isolation will often mean giving up their income. The advice is to claim benefit, but all someone gets with universal credit in the first five weeks, as has been pointed out, is a loan. People are not going to give up their incomes for that. Will the Chancellor replace those advances with non-repayable grants for those who lose their income because of this crisis?
Rishi Sunak
Depending on the particular circumstances of the person who is self-employed, they may well qualify for ESA, which is also available from day one now, rather than day eight.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I was very pleased this evening when Nicola Sturgeon confirmed to me promptly that every penny of the likely £1.9 billion that the Scottish Government will receive as a result of today’s announcement will go directly to businesses and individuals. It is very important that we have that common approach across the United Kingdom from Governments, but it is also important that we have a common approach from banks. The Chancellor has referenced the banks in relation to his loan and grant schemes, but many businesses have existing loan arrangements with the banks. What confirmation does he have from the banks that they will not seek to change those arrangements or to take advantage of the situation where people may be able to get Government money to repay those loans?
Rishi Sunak
I can tell my right hon. Friend that we have had extensive discussions with the banks just this week, and they have outlined their forbearance measures. I very much expect them to honour those commitments. He is absolutely right with his point that we will get through this as one United Kingdom.
Zarah Sultana (Coventry South) (Lab)
Today the Government have announced a mortgage holiday for homeowners, and that is welcome, but they have made the political choice not to give a rent suspension to millions of tenants. The average rent is £220 a week. Statutory sick pay is £94.25 a week. Before people are forced on to the streets because this virus will stop them from working, I, like many other Members in this House, call on the Government to follow the example of other countries and suspend rents and ban evictions today.
Rishi Sunak
The hon. Lady talks about other countries. If she looks at the overall scale of the fiscal interventions that we have outlined last week and this week, she will see they are more significant than almost every other country.
Sarah Atherton (Wrexham) (Con)
The Welsh Labour Government stand to gain £1.6 billion as a consequence of coronavirus. Will my right hon. Friend comment on how the UK Government can encourage the Welsh Labour Government to spend that money timely and appropriately, because business and people need help now?
Rishi Sunak
As I said before, we will get through this as one United Kingdom. We have provided Barnett consequentials early and in advance to devolved authorities, and I very much hope that we can take a joint approach to supporting businesses, public services and individuals through this difficult time.
Clive Efford (Eltham) (Lab)
The notes that have been handed out from the Vote Office tonight say “Statement to the Press”, not to the House of Commons. I do not think there is any difference between what the Chancellor has said to the House and what was said to the press earlier on, and that should not happen again.
Are businesses that are strapped for cash flow likely to take out a loan rather than lay staff off? Is it not assistance with paying wages that they do not have to pay back later that those businesses need? They do not need more debt from the Government; they need help with paying wages.
Rishi Sunak
As we have already outlined, in addition to the extensive loan guarantee scheme, we have also announced significant cash grants to business to provide immediate cash flow relief to them. With regard to employment support, as I have said, that is our next urgent priority.
Andrew Griffith (Arundel and South Downs) (Con)
Difficult times require bold measures, and I commend my right hon. Friend for twice in the space of a week coming to this House and demonstrating that he will do whatever it takes. I support the comments on employment support, but may I ask him also to extend hospitality and leisure benefits to the equally hard-pressed exhibition sector?
Rishi Sunak
I thank my hon. Friend for his support. With regard to the exhibition sector, those that have physical properties and business rates will be eligible for the scheme that we announced today and the cash grant. I am happy to have further conversations with him as well.
Sam Tarry (Ilford South) (Lab)
The RSA recently pointed out that 32% of workers in this country live on less than £500 a month in terms of savings, and 41% have less than £1,000 in the bank. That means there could be as many as 20 million people living from one pay cheque to the next. From what I have heard tonight, renters, freelancers, gig economy workers and zero-hours contract workers will not be feeling reassured. Will the Chancellor be able to look them in the eye and tell them honestly that he has truly done enough, or are they going to be collateral damage on the scrapheap, like so many with the Government’s already failing strategy over herd immunity?
Rishi Sunak
We already took extensive measures last week to strengthen our safety net for vulnerable people. I firmly believe that the best way to help all people through this is to protect their jobs, and that is why the actions we have taken today to support business cash flows provide the best means of doing exactly that.
Steve Double (St Austell and Newquay) (Con)
I warmly welcome the bold and decisive steps that the Chancellor has taken today, which will be welcomed by many businesses in mid-Cornwall, particularly those in the hospitality sector.
I want to raise something that many Members have already raised—the self-employed and small businesses that do not own premises and therefore will not benefit from the measures on business rates and grants. Many people such as taxi drivers, window cleaners, electricians and plumbers have overheads that are not rent, because they are keeping vehicles on the roads. Will he urgently look at what he can do to get cash to those people, so that they can keep their businesses going?
Rishi Sunak
I am happy to look at all the measures that my hon. Friend suggested. The steps we took last week will provide immediate support for those people, and the further measures that are coming will provide a degree of relief for those who have property and small businesses. Of course, they will be able to access the loans that we have talked about, but he is right to highlight the importance of those who are self-employed. They deserve our support, and indeed, last week and this week they are getting it.
Chris Elmore (Ogmore) (Lab)
Following the previous question, I want to press the Chancellor on sole traders. There are measures on taxation that he could introduce quickly to support sole traders. Many in my constituency are very worried that they will not benefit from any of the Chancellor’s proposals laid out last week or today. Will the Chancellor look at that specific area with Treasury officials, the devolved Governments and anybody else who could support sole traders?
Rishi Sunak
I am happy to hear those suggestions from the hon. Gentleman. He will have noted the comments made by the Chief Secretary earlier in relation to IR35, and HMRC has activated its time to pay service, but if he sends me the details, I will happily look at that.
Richard Drax (South Dorset) (Con)
I commend my hon. Friend for this raft of packages, although Members on both sides of the House clearly feel that there is still a lot more to do. I shudder at the administrative task ahead of him to ensure that all this money gets to the right people at the right time. Should we not bring back the small bank branches that have closed over the years, particularly in rural communities that simply do not have access to them?
Rishi Sunak
My hon. Friend is right to highlight the importance of rural communities. My right hon. Friend the Economic Secretary to the Treasury has done a sterling job of preserving access to cash for those communities, and we have said that we will legislate to do more, but in the short term, we will keep that under review.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
May I ask the Chancellor again whether he will work with the Home Office to revisit its rules on no recourse to public funds? If it does not revisit those rules, thousands of the most vulnerable people in this country will not have access even to the most basic support to see them through this crisis.
Rishi Sunak
My right hon. Friend the Chief Secretary is talking to all Departments about the resources that they require to get through these challenging few months.
Kevin Hollinrake (Thirsk and Malton) (Con)
I warmly welcome this package of support for small businesses, which has been warmly welcomed by a number of businesspeople who have already contacted me. The business interruption loan scheme is a key part of this, but some lenders cannot access that scheme because they are not registered with the British Business Bank, and it would take months for them to do so. Will the Chancellor act now to ensure that all lenders can access that scheme?
Rishi Sunak
I thank my hon. Friend for his comments. He is right: we want this scheme to be available through as many branches and outlets as possible. We are urgently working with the Prudential Regulation Authority to see whether we can onboard new providers at pace. He will understand that there are regulatory requirements, but we are seeing what we can do to speed that up.
Lilian Greenwood (Nottingham South) (Lab)
I welcome the increase in the small business grant to £10,000, and I understand that those grants will be distributed by local authorities. What assessment has the Chancellor made of the capacity of local councils to deliver that help, and when will businesses actually receive the money?
Rishi Sunak
As a former local government Minister, I have amazing faith in the capacity of our local authorities to deliver for us in this regard. They are being provided with extra resources to help deal with the administration of this money, and my right hon. Friend the Communities Secretary is already working at pace to ensure that the rebilling and processing of these grants happens in a matter of days and weeks.
Stephen Hammond (Wimbledon) (Con)
I warmly commend my right hon. Friend for this package. The support for the retail, hospitality and leisure sectors is welcome, but he could make it even more effective if he extended the same package to those who are in the supply chain of those industries and the businesses that disproportionately supply customers for those industries, such as English language schools.
Rishi Sunak
My hon. Friend makes an interesting point, and that is why all Secretaries of State have been tasked by me to engage with their affected industries to see whether there are further specific measures of support that are worth our exploring.
Naz Shah (Bradford West) (Lab)
I welcome the Chancellor’s measures for small businesses, and especially in my constituency lots of people have been in touch with us about them, but they will only be effective if they are timely, so when will the cash grants be available to small businesses in real terms? Will he also consider the idea that, when landlords get mortgage breaks, they pass them on to their renters, and how will we ensure that actually happens?
Rishi Sunak
On the processing of the cash grants, as I have said, my right hon. Friend the Communities Secretary is working on this at pace. It will require local authorities to write to the recipients of small business rate relief to collect their bank details, which they do not hold centrally, so that they can then provide the cash payment, but I can assure the hon. Member that that work is happening at pace.
Mark Pawsey (Rugby) (Con)
Businesses in the hospitality sector will appreciate the relief the Chancellor has given on business rates and the cash grants, but can I raise the question of suppliers to the sector, many of which have seen their sales fall off a cliff? In particular, there are those with short-dated products, such as Wood Farm micro-brewery in my constituency, which produces an excellent product but has £20,000 of short-dated stock with four weeks’ life left on it, and stands to bear a pretty substantial loss as a consequence. Is there something that can be done to support businesses such as these?
Rishi Sunak
I thank my hon. Friend for raising that particular case, and I am happy to have a look at it.
Mrs Emma Lewell-Buck (South Shields) (Lab)
The Prime Minister’s public health advice to avoid pubs, restaurants and theatres was not coupled with immediate economic protections, causing panic and upset for the small businesses, the self-employed and those on zero-hours contracts who form the backbone of coastal constituencies such as mine. The measures announced today do not address their concerns. They struggle with high rents and high bills, and my friends have lost their jobs today. Today, the grafters should have been a priority. When will they be?
Rishi Sunak
The package of measures today does specifically provide cash support to those in that sector to help with things like rent, but I make no apology for our being led by the public health response. This is first and foremost a public health emergency, and we will be led by responding to that. Of course, the economy is foremost in our minds, and I will always respond quickly and rapidly to any changes in the public health advice.
Mr John Baron (Basildon and Billericay) (Con)
I commend the Chancellor for this package of measures as far as they go, and we understand that it is a moving narrative, but I particularly urge him to focus on the importance of cash flow when it comes to smaller businesses and the self-employed. However, can I raise with him a group of people who so far have not been mentioned, which is the elderly and the vulnerable who live alone? There is a real risk in a situation such as this that they get inadvertently overlooked, and we need to reach out to them. Would the Chancellor consider providing appropriate support for local authorities to do just that—to identify them, locate them and make contact, because no one should be left behind?
Rishi Sunak
I can tell my hon. Friend that he is absolutely right, and the Communities and Local Government Secretary has already been engaging on this particular issue, working together with the Health Secretary with regard to social care, to make sure that, in our local communities, we can identify and protect the elderly and most vulnerable, and make sure that they get the support that they need.
Wendy Chamberlain (North East Fife) (LD)
A constituent of mine in the Howe of Fife, who is self-employed, has contacted me today because she is worried about her future employment and how she will pay her mortgage and support her family. Although I welcome the Chancellor’s moves in relation to mortgages, the fact is that mortgage products often have payment holidays as part of them. Given that these are the first steps, may I ask the Chancellor, first, is this going to be for people who are directly impacted by coronavirus, or is it potentially for people who are self-isolating as they are at risk of getting an infection; and secondly, is he considering other measures to support my constituent, such as statutory sick pay for the self-employed or, indeed, council tax relief?
Rishi Sunak
I say to the hon. Lady that I think the measures today on mortgage forbearance are significant and welcome, and banks will show flexibility in providing that. In regard to council tax support, we did provide £500 million of hardship funding to local authorities specifically to use and deploy through their local council tax or support systems that already exist to provide extra support to people with their council tax bills.
Martin Vickers (Cleethorpes) (Con)
I welcome the Chancellor’s package, but he will recognise that many of our constituents remain anxious and we look forward to further measures. He rightly mentioned the aviation sector, which could lose many thousands of jobs. At a more local level, bus and coach operators will suffer as a result of people staying home. They provide a vital service to get NHS workers, for example, to and from work. Could he have a word with his colleague in the Department for Transport and ensure that bus operators are looked after?
Rishi Sunak
My hon. Friend makes a good point and I will certainly take that up with the Transport Secretary.
Mike Amesbury (Weaver Vale) (Lab)
If Denmark can step in and offer 70% subsidies as a transitional arrangement, why can’t the Chancellor? Step up. Step up!
Rishi Sunak
I have already mentioned looking at the Denmark scheme and indeed the German scheme. The point is what we are able to deliver at pace. Other countries have had schemes in place beforehand, which makes it easier for them to do things, and we need to work with what we have got. But the principle of providing support is one that I fully acknowledge, which is why we are working on that at pace. Again, when considering individual measures, it is worth looking at fiscal interventions between this week and last week in the round, which, in the context of any global response, are extremely significant.
Bob Seely (Isle of Wight) (Con)
I welcome the Chancellor’s statement and have two questions. First, charities and social enterprises, such as Age UK on the Isle of Wight and the West Wight Sports and Community Centre, face significant income cuts and I fear that rate relief will not be enough. Can more be done to support social enterprises? Secondly, my chamber of commerce is concerned about the ability of small businesses, especially tourism businesses, to access the grants and it fears that
“businesses will be closing, and on mass, before money becomes available”.
So can we act as swiftly, quickly and generously as possible?
Rishi Sunak
As I said, the Secretary of State for Housing, Communities and Local Government will have already been in touch with my hon. Friend’s local council through MHCLG. They will be the ones processing these grants. There is no reason why that cannot happen as swiftly as a council is able to act.
Alex Davies-Jones (Pontypridd) (Lab)
In the past few weeks, businesses in my constituency, and across Rhondda Cynon Taf, have been devastated by unprecedented flooding and are still trying to recover. Many are faced with the bureaucracy of insurers and are trying to rebuild their livelihoods. They are now faced with the prospect of closing for good because of the loss of business due to coronavirus. What conversations is the Chancellor having with the Welsh Government to secure financial relief for all these businesses in the UK?
Rishi Sunak
The hon. Lady asked about flooding. In last week’s Budget we outlined a variety of packages to help the communities affected by that. First and foremost, there was £120 million to rebuild flood defences that have just been destroyed, as well as £200 million of new resilience funding for communities that are repeatedly flooded and £5.2 billion, which represents a doubling of the amount that we spend every year to build new flood defences. That will protect 300,000 people and it comes on top of the work by the Secretary of State for Housing, Communities and Local Government in activating the Bellwin scheme and providing immediate relief for communities that have been impacted by local flooding.
Jason McCartney (Colne Valley) (Con)
I welcome the Chancellor’s pledge to do whatever it takes to support businesses, families and individuals, but when will we get the details of support for renters, for the self-employed and for freelancers, and when will businesses that are losing customers day by day get those cash grants in their bank accounts, so that they can pay their staff, keep them employed and pay their rents?
Rishi Sunak
Measures to help those who are self-employed and in the gig economy are already taking effect as a result of the measures taken last week. The Secretary of State for Housing, Communities and Local Government is working at pace to deliver these cash grants to businesses in the coming days and weeks.
David Linden (Glasgow East) (SNP)
Sole traders in my constituency work as driving instructors and personal trainers. They are watching their bookings evaporate before their eyes. What support is the Chancellor providing for sole traders?
Rishi Sunak
Again, the measures that we took last week to strengthen our security net will benefit those who are self-employed and sole traders. Those with properties that qualify for business rate relief will benefit from that and cash grants will also flow to those people.
Felicity Buchan (Kensington) (Con)
This morning in the Treasury Committee, we asked the Chancellor to throw the kitchen sink at the economy and I thank him because he has certainly done that. However, small businesses in my constituency of Kensington have an issue, because most of the business rate relief is funnelled only if the rateable value is under £51,000. But they are suffering in the same way as other businesses. Will the Chancellor look into that?
Rishi Sunak
I am pleased to tell my hon. Friend that, as a result of the measures I have taken today, any business in the retail, hospitality and leisure sector, regardless of its rateable value, will now qualify for 100% business rates relief for these next 12 months.
Alex Norris (Nottingham North) (Lab/Co-op)
Like colleagues, I spent today talking to businesses in my community. They wanted to know that, when they follow health advice to the letter, and if they keep all their staff on payroll, as they desperately want to, their business will be safe. As a result of the package the Chancellor announced tonight, can I give them that categoric assurance first thing in the morning?
Rishi Sunak
I very much hope that the businesses that are looking at the range of measures outlined today will see that there is significant financial support for them, whether that is business rate holidays, direct cash grants or access to incredibly low-cost and accessible financing. The combination of all those measures, on top of the compensation we will pay to small and medium-sized businesses for statutory sick pay, is a significant direct fiscal support for businesses up and down our country to protect people’s jobs.
Derek Thomas (St Ives) (Con)
Life and the economy on the Isles of Scilly are particularly fragile. To give a quick example, a passenger boat operator who needs to provide a service for the whole of the islands but relies on tourism tells me that he has five weeks left in business. What can the Chancellor do to help businesses and the community on the Isles of Scilly?
Rishi Sunak
My hon. Friend is right to highlight the particular issues that his remote communities face. I believe the measures announced today, whether on business rates or direct cash grants, will make an enormous difference to local businesses in his constituency.
Gavin Robinson (Belfast East) (DUP)
I am grateful to the Chancellor for the effort he is putting into these measures. One question that has been raised is about the facility that is being made available for business interruption payments. Can the Chancellor outline what criteria will apply to that facility? Will there be complete access, should it be required, or will businesses have to fulfil criteria that will be assessed? If so, what will be the basis of that assessment—books this week, last week or before any interruption?
Rishi Sunak
The hon. Gentleman makes an excellent point. Our ambition is for the criteria to be as flexible and generous as possible. The basic point will be to ensure that a business was sensible and well-traded before coming into the crisis that it now faces. As long as that is the case, the loans should be able to be provided through the banks on the ground, with our guarantee standing behind that.
Sir Desmond Swayne (New Forest West) (Con)
Should payment quarterly and in advance be tolerated for commercial lets?
Rishi Sunak
As always, my right hon. Friend makes a pithy point. He is right to highlight the importance of prompt payment, especially during this time. That is why the Government are taking every step we can to be prompt in our payments and urging all other businesses that can do so to do exactly the same.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Given the exceptional circumstances, why exactly can statutory sick pay not be paid at the real living wage rate?
Rishi Sunak
We have an extensive security and support network, which extends beyond statutory sick pay to an NHS that is free at the point of use. Our welfare and security support system works well, and we buttressed it with an extra £1 billion investment last week.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Although I congratulate my right hon. Friend on the package he has worked very hard on, sadly, I received a phone call today from one of my employers, whose contract had been cancelled forthwith. He has had to lay off 1,000 people. There will be a lot of very anxious people tonight. Although they are probably entitled to employment and support allowance and universal credit, they will suffer a considerable drop in their wages. I urge the Chancellor to come up with an employment support package as soon as possible.
Rishi Sunak
I thank my hon. Friend for his support. I have sympathy with his constituents in that situation. That is why we strengthened our security and safety net last week, but the best thing we can do is help employers get through this and ensure that those jobs are ready for people to go back to as soon as practically possible.
Wes Streeting (Ilford North) (Lab)
The reality is that universal credit and statutory sick pay were not generous enough in the best of times, and they certainly are not enough to live on in these worst of times. When the Chancellor comes forward again, will he announce immediate plans to provide income protection for people who suffer loss of earnings, and will he give a tax holiday to freelancers and contractors facing tax bills in July for work that will never materialise in these circumstances?
Rishi Sunak
We have taken steps to strengthen the safety net. On deferring tax payments, that is something that is able to happen through Time To Pay. I urge people to contact Time To Pay. The details are available online. HMRC has 2,000 people standing by to talk to individuals. If tax deferrals are needed, it stands ready to negotiate and agree those.
Virginia Crosbie (Ynys Môn) (Con)
On behalf of my constituents, I welcome the significant package of financial measures the Government have made available today. Businesses in Ynys Môn, such as Seawake, Gwynedd Shipping and the restaurant Catch 22, have contacted me today, desperate for the Government to take action. Will the Chancellor join me in urging the Welsh Government to make this additional funding available as quickly as possible to small businesses across Wales so they can survive?
Rishi Sunak
My hon. Friend is right to highlight the importance of speed in Wales and everywhere else. That is why we have taken steps to make Barnett consequentials available in advance as quickly as we can, so that all devolved authorities can plan and execute their plans expeditiously.
Mr Toby Perkins (Chesterfield) (Lab)
Businesses face collapsing revenues and the biggest part of the Chancellor’s response is to invite them to take on substantially more debt. That will not save people’s jobs. For the Chancellor to compare that £330 billion, which is a guarantee he is making that he may never have to spend, with the package President Macron put together in France is absolutely absurd.
Rishi Sunak
Far from being absurd, President Macron yesterday announced exactly €300 billion in loan guarantee schemes.
Robert Largan (High Peak) (Con)
I represent the Peak District, where hotels, restaurants, pubs and the tourism industry in general are absolutely central to the local economy. I therefore welcome the economic measures announced, but people and businesses are struggling right now. So may I urge the Chancellor to make certain that loans and grants are paid and put into people’s bank accounts as soon as possible?
Rishi Sunak
My hon. Friend is exactly right. That is why the steps we are taking are designed to work at pace. Loan schemes will be available from early next week and the Communities Secretary is ensuring that the grant payments are processed as quickly as possible through local authorities in the coming days and weeks.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
I have been contacted by my constituent Andy, from Erith and Thamesmead. Businesses like Andy’s collapsed this week. The scrapping of business rates does not help small businesses like Andy’s. Loans of £300 billion do not help small businesses like Andy’s. Will the Chancellor clearly set out how he will help small businesses? Will he personally promise me that he will help my constituent Andy and do whatever it takes to make sure he is properly supported?
Rishi Sunak
We have outlined a package of measures to support small businesses specifically. Indeed, 700,000 of our smallest businesses will now be receiving a £10,000 grant. I suggest that the hon. Lady’s constituent Andy contacts his local authority for further support, either on business rates or local council tax support, where we are injecting an extra half a billion pounds into the system.
Mr Philip Hollobone (Kettering) (Con)
I declare my interest as a member of Kettering Borough Council. I commend the Chancellor for coming up with a £350 billion business support package in record time. That will be welcomed by many small businesses in Kettering. Billing authorities such as Kettering Borough Council are already at their busiest time of year, sending out council tax bills. Can the Chancellor explain what role they will play in getting business support to local businesses and what extra support they will get to enable that to happen?
Rishi Sunak
My hon. Friend makes an excellent point. He is right to highlight the capacity of local authorities to execute this plan. The Communities Secretary is working closely with them and they will be provided with extra resource funding to deal with the extra administration they will now have to undertake on our behalf. But I know and have confidence that they will do that job extremely well.
Stephen Farry (North Down) (Alliance)
Members on both sides of the House are demonstrating that there are gaps in terms of not only the provision that has been announced but the urgency required to address the issue. May I therefore return to the issue of a universal basic income, or a series of flat payments to people? Would that not be a much more efficient and effective way of helping people in the immediate term, with the proviso that money can be clawed back through the tax system in due course?
Rishi Sunak
I believe our approach represents a sensible, coherent, co-ordinated and comprehensive way to tackle the problem. We have a range of targeted measures, each of which will make a significant difference to those on the ground, but as I said, we stand ready to do more and are indeed actively doing extra things.
Greg Smith (Buckingham) (Con)
I warmly welcome the enormous package of measures outlined by the Chancellor. This morning, I spoke to Energy Generator Hire in Kimble Wick in my constituency, which has lost most of its order book and is uncertain about the future. Can he confirm whether event hire companies are included in the envelope of leisure and hospitality?
Rishi Sunak
Those that have business properties will be eligible both for the relief and the grant, which will cover a significant number of events companies that have premises. Obviously, if they do not have premises, they will not qualify for business rates relief, but should be eligible for some of the other measures that I have outlined today.[Official Report, 29 September 2020, Vol. 681, c. 4MC.]
Helen Hayes (Dulwich and West Norwood) (Lab)
The failure of the Chancellor to mention private renters in his statement was a grave error, because many of those private renters are the same precarious workers in hospitality, the arts and culture and other industries who are being laid off today. Will he guarantee that no one will lose their home as a consequence of coronavirus?
Rishi Sunak
The Housing Secretary will urgently and soon bring forward measures to protect renters. The hon. Lady is right to highlight the importance of that, and that is why we will be acting in short order.
Peter Aldous (Waveney) (Con)
I commend the Chancellor for coming forward with such a comprehensive range of support. If he is to use the benefits system to support those ineligible for sick pay, I urge him to take on board the concerns raised by the right hon. Member for East Ham (Stephen Timms) about the fundamental flaw with universal credit. I also highlight the vital work that food banks, citizens advice and local churches will be doing in the coming weeks. He should ensure that they get the right support for that.
Rishi Sunak
I wholeheartedly agree with my hon. Friend about the importance of our voluntary sector, particularly at this time, and the vital role that it will play. It is right that it gets our support. The Communities Secretary is actively engaging with it and I stand ready to do more as needed.
Charlotte Nichols (Warrington North) (Lab)
What measures will the Government take to ensure that landlords who benefit from mortgage holidays do not profit from the crisis by having their pockets lined by tenants still expected to pay their rent?
Rishi Sunak
As I said, the Housing Secretary will shortly outline our measures to protect renters. We understand well the point that the hon. Lady makes.
Richard Graham (Gloucester) (Con)
This is a huge step to support jobs. Speed is of the essence, so will the Chancellor confirm when the business interruption loans will be available and how quickly applications will be processed? Will he also confirm that the Communities Secretary’s package will cover renters, the self-employed, nurseries, community groups, kindergartens and charities so that all the people in those sectors will be reassured as well?
Rishi Sunak
My hon. Friend is right that speed is of the essence. The loan programme will be available from early next week. My right hon. Friend the Chief Secretary to the Treasury is doing an excellent job working with the banks to make sure that those applications will be processed at speed, so businesses that need that support will get it quickly.
Bill Esterson (Sefton Central) (Lab)
The amount of money announced for the loan guarantee scheme is a massive sum, but will businesses want to be saddled with debt when they have no income and no means of paying it back? Previous loan schemes were poorly taken up because the banks ignored the guarantee part of the scheme, so how will the Chancellor make sure that the loan guarantee scheme is delivered by the banks at the scale and speed needed?
Rishi Sunak
I thank the hon. Member for the thoughtful question. He is right to ask about that particular point. He will be pleased to know that, compared with previous loan guarantee schemes, the generosity of the Government guarantees is significantly increased to provide a strong incentive for the banks to provide that lending. We have spoken to all the banks individually specifically on this measure and have their assurance that they will work at pace to deliver it. As a result of our entreaties, they have also unilaterally unlocked £21 billion of their own extra lending capacity to provide to the sector, so I am confident that they will deliver as required.
Danny Kruger (Devizes) (Con)
Many businesses depend on not the public or other businesses, but the state itself, through contracts with different parts of the public sector. Many such contracts are on a payment-by-results basis, so they are paid according to outcomes that might no longer be possible, given the situation. Will the Chancellor work with other parts of Government to ensure that the state’s contracts, particularly with social enterprises, charities and social businesses, can be flexed to ensure that those important businesses stay afloat?
Rishi Sunak
My hon. Friend makes an excellent point, which I will be sure to raise with the Chancellor of the Duchy of Lancaster.
Kerry McCarthy (Bristol East) (Lab)
Can the Chancellor clarify whether community interest companies will be treated in the same way as other small companies when it comes to being able to apply for the £10,000 grants?
Rishi Sunak
If the hon. Lady will forgive me, I do not have a precise answer for her at this moment, but I will look into the matter as soon as I am done and write to her.
Mike Wood (Dudley South) (Con)
A firm in the hospitality sector has written to me to say that tomorrow it must lay off 200 workers and halve the pay of 100 more, because bookings are close to zero and it cannot cover the wage bill. How much longer should it hold off?
Rishi Sunak
Hopefully it will benefit today from the significant measures that have been put in place to provide forward business rate relief and immediate cash support through grants. That should provide the business with some reassurance that help is on its way to enable it to protect jobs, with more to come.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Yesterday a constituent of mine was laid off from his employment, along with 50 colleagues. He described how he watched the company’s owners trying to hold back tears as they let go people who have worked for them for decades. Why will the Chancellor not cut off this problem at the root by providing to British businesses the same reassurance that President Macron has provided to French businesses: that no business will go bankrupt?
Rishi Sunak
As I have already said, the French Government announced €300 billion of loan guarantees yesterday. We have gone a step further with £330 of loan guarantees, equivalent to 15% of our GDP, to provide the same level of support. Beyond that, the fiscal measures that we have taken between last week and today are comparable in scale to those undertaken by any major economy.
Owen Thompson (Midlothian) (SNP)
The introduction and increase of grants is a welcome step in the right direction, but a number of food and drink producers in my constituency have seen the outlet for their produce dry up, so what additional support can be offered to help keep such companies afloat?
Rishi Sunak
The measures announced today, whether the loan or other guarantee schemes, will be of significant support to those businesses, and the measures we announced last week will also help the employees. As I have said previously, we are looking at more measures in all areas, and I will update the House at things develop.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
All our constituents will require realistic statutory sick pay if they are required to self-isolate. Will the Chancellor do whatever it takes to ensure that happens, and will he include the self-employed and those on zero-hours contracts in his measures?
Rishi Sunak
As previously discussed, depending on people’s particular employment circumstances, they might well be eligible for statutory sick pay even though they are self-employed or in the gig economy. We have already taken measures to ensure that they are eligible for those benefits and for employment and support allowance from day one, rather than day four and day eight respectively, and we have further strengthened the safety net with an investment of £1 billion.
Mike Kane (Wythenshawe and Sale East) (Lab)
Hundreds upon hundreds of aviation workers in my constituency were sent home today. Coronavirus has devastated the airline industry. Because they had less than three years’ experience, 21 days’ pay is all they get, with no prospect of a job going forward. Can the Chancellor give us more information on the aviation package that he has announced tonight?
Rishi Sunak
We are in active dialogue with the key companies in the sector, both airlines and airports, to discuss what specific support might be required. In the circumstances, it would not be appropriate for me to comment on the measures that individual companies might want to engage with us on, but the hon. Gentleman can rest assured that we are working hard for the industry.
Claudia Webbe (Leicester East) (Lab)
Given the acceleration of the virus and the collapse of the aviation industry, which means that there is no prospect of any deportation charter flights leaving the UK, and given that there is no testing, it seems inhumane and unjustified to continue to raid the homes of my constituents, especially those who have underlying health conditions or are self-isolating, and put them into detention centres indefinitely, at great expense and in poorly sanitised conditions. That puts the lives of my constituents in danger and violates their human rights. Detentions and deportations by charter flight are barbaric and costly. The outbreak of covid-19 further underlines their cruelty and expense. Will the Chancellor urge the Home Secretary to end them immediately?
Rishi Sunak
My right hon. Friend the Home Secretary is doing an excellent job, making sure that our borders are secure and that we enforce our laws as required, but in a way that is humane and compatible with all human rights. I am sure that she will do exactly that as we go through the challenging next few months.
Matt Western (Warwick and Leamington) (Lab)
The Chancellor will be aware that in certain business sectors, the loss of just one or two people in specialised roles from an organisation can bring down a business. France and Italy are reviving the approach adopted in a global financial crash of supporting workers with a proportion of their wages. Will the Chancellor do the same here?
Rishi Sunak
As I have said, we are considering employment support packages and what can be designed and implemented at pace. As for other countries, let me again put it on record that the fiscal interventions we have undertaken are comparable in size with those of any other major developed economy.
Kate Green (Stretford and Urmston) (Lab)
There is huge fear, and also confusion, among my constituents this evening about a range of issues: whether measures will apply to start-ups, what will happen to VAT on advance sales, the position of businesses in the hospital supply chain, and what will happen if a freelancer cannot work because he or she must look after a family member who has been sent home. May I suggest to the Chancellor that local authorities will not have the capacity to deal with all those queries while they are doing many other things, including delivering vital services? It would be very helpful if a dedicated MP hotline could be set up to deal with such questions, so that we could go to one Government location to help our constituents.
Rishi Sunak
I shall be happy to look at that suggestion. The hon. Lady also asked a specific question about VAT on postponed accounting. I am actively considering that, in terms of when we are scheduled to introduce it and whether it could be improved.
Darren Henry (Broxtowe) (Con)
Small businesses in my constituency will welcome their eligibility for grants of £10,000, up from £3,000 last week. How will they receive information on how to gain access to those funds, if, indeed, they qualify?
Rishi Sunak
If those businesses are already receiving small business rate relief, that will be known to the local authorities, which will shortly be writing to them to request their financial details so that they can process the grant payments. If businesses have not heard in short order, they can get in touch with their local authorities.
Janet Daby (Lewisham East) (Lab)
Food banks are used by 1.6 million people, 250,000 more than the number indicated by the previous year’s data, and the demand will increase. Food banks rely on the surplus from supermarkets, and on people’s food donations. What is the Chancellor’s contingency plan to address this very serious issue?
Rishi Sunak
My right hon. Friend the Environment Secretary is engaging actively with supermarkets to make sure that all aspects of our food supply are secure, including deliveries and ensuring that everyone receives the food that they need during this time.
Kevin Brennan (Cardiff West) (Lab)
The Chancellor needs to be more than a desiccated calculating machine. When he answers questions, we need to hear talk about people, not just packages. Will he look at early-day motion 302, which I tabled and which advocates a universal basic income—particularly for freelancers and the self-employed—as a temporary measure during this crisis, and will he pledge to return to the House, rather than just making an announcement through the press, to tell us what he is going to do about these employment measures?
Rishi Sunak
The hon. Gentleman talks about packages to support business. They are not divorced from people’s circumstances; they are directly helping people’s circumstances. The way to help people is to secure their employment, now and in the future, and that is what these packages are designed to do, which is why they will make a real difference to people on the ground.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Chancellor is already late with support for aviation. Airlines, airports, and support services such as baggage handlers have already announced, or are strongly considering announcing, significant job cuts. Can the Chancellor reassure them that they do not need to do that, and that he will follow other Governments such as that of New Zealand, which announced £35 billion worth of direct wage subsidies to keep not just those jobs but all jobs safe?
Rishi Sunak
We have announced our own range of fiscal measures to help businesses to protect jobs, with particular reference to the airline industry. As I have said, my right hon. Friend the Transport Secretary and I are actively engaging with the companies and the airports in that sector to establish what support is required.
Jeff Smith (Manchester, Withington) (Lab)
A lot of my constituents work in the events and leisure industry; many are self-employed freelancers. I spoke to one today, who told me that she earns a large proportion of her annual income during the summer event and festival season. She is going to lose that this year. Given that it could be another year before she is able to get back on her feet, can I urge the Chancellor to come back with a package of support for people like her—ideally grant support, a long-term package for individuals in that sector?
Rishi Sunak
Those in the leisure and hospitality and the retail sectors are of course particularly impacted by what we are experiencing, which is why the package of measures announced today builds on what was announced last week and goes to the heart of that industry to provide direct cash support and business rate relief. The measures we announced last week also provide support to those who are self-employed.
Apsana Begum (Poplar and Limehouse) (Lab)
I, like many others in this House, have been contacted by constituents who are extremely anxious and worried about the uncertainty and disruption in the months ahead. This includes constituents who are self-isolating, especially those who are expected to self-isolate for extended periods, who may face loneliness and other mental health challenges. Is the Chancellor planning to allocate any funding to address this?
Rishi Sunak
I very much appreciate people’s anxiety at this difficult time. With regard to those who are self-isolating, we have already made changes to our welfare system to ensure that those people qualify for the support that they deserve. With regard to public services support, as I have said, the Communities Secretary and the Health Secretary are actively engaging with those sectors to understand whether there is extra support that is required.
Alex Sobel (Leeds North West) (Lab/Co-op)
The reality is that for businesses and workers this crisis is going to last for many months. Has the Chancellor considered a much more interventionist microeconomic policy? For instance, has he thought about repurposing the businesses shutting now—hotels, restaurants, music venues, theatres—as infection rates rapidly rise?
Rishi Sunak
That would be a question for my right hon. Friend the Health Secretary, who is actively engaged in making sure that we can increase the capacity of our health service to cope with the next few months and is considering a range of measures, but we will do whatever it takes to make sure that we have the capacity we need to help those who fall sick at this time.
Chris Stephens (Glasgow South West) (SNP)
The Government effectively discouraged UK citizens from entering sectors of the economy that traditionally offer low-paid and precarious employment. Is it the Chancellor’s intention, when he talks to trade unions and business over the next few days, to enter into those discussions with the principle that the wages of those who jobs are under threat, whose shifts have been cancelled and whose hours have been cut will be protected?
Rishi Sunak
The Government telling people not to visit those places, or to hold back from them, was based on the advice of scientists and medical experts to ensure that our health as a country is protected. The measures we announced today directly go to help those in those industries to protect those jobs. As I said, we will work urgently with the unions and businesses to see what further measures can be put in place.
Andy Slaughter (Hammersmith) (Lab)
Many decisions the Government have taken on isolation, at-risk groups and testing limit the ability of NHS staff to go to work. It is easy to say, “Whatever it takes,” but how can we be sure that our hospitals in particular have the resources to save every life that can be saved?
Rishi Sunak
Of course, we take the advice of the chief medical officer in this regard and we will continue to do so. We have been absolutely clear that the NHS will get whatever support financially it needs from the Government to help get us through what will be a very challenging time. We are considering all measures to increase the capacity of the NHS to respond to this, and indeed provide the support to those on the frontline who are going to deal with a very difficult few months.
Sarah Olney (Richmond Park) (LD)
I obviously welcome the Chancellor’s commitment to making sure that jobs are saved and that people can stay in work, but I wonder whether he agrees that by structuring his package around loans rather than grants, he actually loses some control over what the money is spent on. Therefore, he cannot be certain that the money is going to be spent most effectively in pursuit of this objective.
Rishi Sunak
It is not just loans; it is loans and grants and tax relief on business rates, as well as deferral of tax payments through time to pay and reimbursement for statutory sick pay. Across the piece, it is a series of different interventions, all of which will be effective at doing one fundamental thing: improving the cash flow in the short term of businesses to help them bridge through what will be a temporary dislocation, so that they can emerge on the other side and we do not lose for the long term that productive capacity and lose those jobs.
Daniel Zeichner (Cambridge) (Lab)
Making announcements is one thing, but, to use the Chancellor’s words, operationalising at speed is quite another, so can he be more precise about the resources available for the civil service and local councils? A simple example—a Canadian nurse phoned my office today so frustrated that she cannot help the NHS because we cannot sort out the equivalent qualifications. It will be the same for many others, particularly Bangladeshi nurses working in the care sector.
Rishi Sunak
I am happy to take on board the suggestion from the hon. Gentleman. I will raise it with the Health Secretary, who I know is actively looking at ways to bring extra people into the NHS to help respond to this crisis. There is a range of options and flexibilities we should consider. I will make sure that I raise that one with him as well.
Financial Statement
Rishi Sunak Excerpts(4 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
Madam Deputy Speaker, I want to get straight to the issue most on everyone’s mind: coronavirus covid-19. I know how worried people are—worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security. And I know they get even more worried when they turn on their TVs and hear talk of markets collapsing and difficult times coming. People want to know what is happening and what can be done to fix it.
What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure. We are clear that this is an issue above party. We will do right by you and your family, and I know I will have the support of the whole House as I say that. This House has always stood ready to come together, put aside party politics and act in the national interest. We have done so before, and I know we will do so again. My right hon. Friend the Prime Minister, alongside officials and scientists, is leading the work on the public health response. Today, I want to set out our economic response so we bring stability and security.
Let me say this: we will get through this—together. The British people may be worried, but they are not daunted. We will protect our country and our people. We will rise to this challenge. But let me also say, yes, this virus is the key challenge facing our country today, but it is not the only challenge. We have just had an election where people voted for change—change in our economy, change in our public services, change in the cost of living, change in our economic geography. This Budget delivers on that change. Yes, as we deal with coronavirus, it is a Budget that provides for security today, but it is also a plan for prosperity tomorrow. It is a Budget that delivers on our promises to the British people. It is the Budget of a Government that gets things done.
Madam Deputy Speaker, before I set out the details of our plan, let me first thank Members who have contributed to the discussions on how to respond to coronavirus—Members from both sides of this House. Our economy is robust, our public finances are sound, our public services are well prepared. My right hon. Friend the Health Secretary is working around the clock to protect the public’s health, and I will do whatever it takes to support the economy.
First, let me explain the nature of the economic challenge and my overall strategy. The challenge is this: there is likely to be a temporary disruption to our economy. On the supply side, up to a fifth of the working-age population could need to be off work at any one time, and business supply chains are being disrupted around the globe. This combination of people being unable to work and businesses being unable to access goods will mean that, for a period, our productive capacity will shrink. There will also be an impact on the demand side of the economy, through a reduction in consumer spending. The combination of those effects will have a significant impact on the UK economy, but it will be temporary. People will return to work. Supply chains will return to normal. Life will return to normal. For a period, it is going to be tough, but I am confident that our economic performance will recover.
So given this analysis of the situation, let me set out our strategy to deal with it. We cannot avoid a fall in demand, because the primary driver of that reduction in consumption—the primary reason people are not spending as normal—is that they are following doctors’ orders to stay at home. The right immediate policy response is to provide security and support for those who get sick or cannot work by funding our public services and a strengthened safety net.
On the supply side, the right response is to provide a bridge for businesses to ensure that what is a temporary impact on our productive capacity does not become permanent. In other words, our response will be temporary, timely and targeted. This is the right response, and at the right time.
That response is clearly and closely co-ordinated with the Bank of England. The Governor and I have been in constant communication about the evolving situation, and our responses have been carefully designed to be complementary and to have maximum impact, consistent with our independent responsibilities.
The Governor set out this morning the actions that the Bank will take to help UK businesses and households bridge across the likely economic disruption: a 50 basis point reduction to interest rates to support business and consumer confidence and cash flows; the introduction of an SME term funding scheme to help reinforce the transmission of the reduction in Bank rate to the real economy; and releasing the counter-cyclical buffer to further support the ability of banks to supply credit.
The Government’s response will use fiscal action to support public services, households and businesses. Together, we are taking action that is co-ordinated, coherent and comprehensive.
Let me now set out our three-point plan. First, whatever extra resources our NHS needs to cope with coronavirus, it will get. Whether it is research for a vaccine, recruiting thousands of returning staff or supporting our brilliant doctors and nurses—whether it is millions of pounds or billions of pounds—whatever it needs, whatever it costs, we stand behind our NHS.
Secondly, during this immediate crisis, if people fall ill or cannot work, we must support their finances. We will make sure our safety net remains strong enough to fall back on. My right hon. Friend the Prime Minister has already announced that statutory sick pay will be paid from day 1, rather than day 4.
Today, with the assistance of my right hon. Friend the Work and Pensions Secretary, we can go further. Statutory sick pay will also be available for all those who are advised to self-isolate, even if they have not yet presented with symptoms. And rather than having to go to the doctor, people will soon be able to obtain a sick note by contacting 111.
But of course not everyone is eligible for statutory sick pay. There are millions of people working hard who are self-employed or in the gig economy. They will need our help too. So to support them during this period, we will make it quicker and easier to access benefits. Those on contributory employment and support allowance will be able to claim from day 1, instead of day 8. To make sure that time spent off work due to sickness is reflected in people’s benefits, I am also temporarily removing the minimum income floor in universal credit. And I am relaxing the requirement for anyone to physically attend a jobcentre—everything can be done by phone or online. Taken together, these measures on ESA and universal credit provide a boost of almost £0.5 billion to our welfare system.
To further support our people, I am also creating a £500 million hardship fund, distributed to local authorities, which will be able to use that fund to directly support vulnerable people in their local area. In total, that is a £1 billion commitment to support the financial security of our people.
But the best way to support people is to protect their jobs, and we do that by supporting our businesses—the third part of our plan. The measures I have announced today on statutory sick pay are crucial to support those who need to take time off work, but that cost would be borne by business. If we expect 20% of the workforce to be unable to work at any one time, the cumulative cost would hit our small and medium-sized businesses hard. So, in recognition of these exceptional circumstances, today I am taking a significant step. For businesses with fewer than 250 employees, I have decided that the cost of providing statutory sick pay to any employee off work due to coronavirus will, for up to 14 days, be refunded by the Government in full. That could provide over £2 billion for up to 2 million businesses. This will significantly ease the burden on businesses, but we can do more. I have asked Her Majesty’s Revenue and Customs to scale up the time to pay service, allowing businesses and the self-employed to defer tax payments over an agreed period of time. Starting today, there will be a dedicated helpline, with 2,000 staff standing ready to help.
Although time to pay is important, it will still be the case that some good, well-run businesses will face problems with their cash flow. They may struggle to pay people’s salaries, pay their bills or buy new stock. They will need loans to get through this period. So, today, I am announcing a new, temporary coronavirus business interruption loan scheme. Banks will offer loans of up to £1.2 million to support small and medium-sized businesses. The Government will offer a generous guarantee on those loans, covering up to 80% of losses, with no fees, so that banks can lend with confidence. This will unlock up to £1 billion of attractive working capital loans to support small businesses, with more as needed.
Taken together, I expect the combination of those measures to protect the vast majority of businesses through the worst of the crisis, but I have two other measures that will use the tax system to support businesses through this. Our manifesto promised that for shops, cinemas, restaurants, and music venues with a rateable value of less than £51,000, we would increase the business rates retail discount to 50%. Today I can go further, and take the exceptional step, for this coming year, of abolishing their business rates altogether. But there are tens of thousands of other businesses in the leisure and hospitality sectors currently not covered by this policy: museums, art galleries and theatres; caravan parks and gyms; small hotels and B&Bs; and sports clubs, night clubs, club houses and guest houses. They would not benefit from today’s measure, but they could be some of the hardest hit. So for this year I have decided to extend the 100% retail discount to them as well. That means that any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates whatsoever. That is a tax cut worth £1 billion, saving each business up to £25,000, and it means that, over the next 12 months, nearly half of all business properties in England will not pay a penny of business rates. I am also launching today a fundamental review, to be concluded at the autumn Budget, of the long-term future of business rates. But even with the temporary extension of the retail discount to the leisure and hospitality sectors, many of our smallest businesses already pay no business rates, so would not benefit from this policy. So to support them to manage their fixed costs, I am going to go a step further. I am providing, to any business currently eligible for the small business rates relief, a £3,000 cash grant per business. This is a £2 billion cash injection direct to 700,000 of our smallest businesses.
Let me summarise for the House the fiscal impact of our immediate response to coronavirus. Taken together, the extraordinary measures I have set out today represent £7 billion to support the self-employed, businesses and vulnerable people. To support the NHS and other public services, I am also setting aside today a £5 billion emergency response fund, and I will go further if necessary. Those measures are on top of plans that I will set out later in this Budget, which provide an additional fiscal loosening of £18 billion to support the economy this year. That means that I am announcing today, in total, a £30 billon fiscal stimulus to support British people, British jobs and British businesses through this moment. And of course, if further action is needed as the situation evolves, I hope the whole House knows that I will not hesitate to act.
I believe that this represents one of the most comprehensive economic responses of any Government anywhere in the world to date. The Governor of the Bank of England and I are in close contact with our counterparts around the world in the G7 and the G20, and to support the global response I am also making new funding of £150 million available for the International Monetary Fund’s relief efforts.
Madam Deputy Speaker, coronavirus will have a significant impact on our economy, but it will be temporary. I will do whatever it takes to get our nation through it. I am acting today with a multi-billion-pound commitment: more money for our NHS; more generous sick pay; faster access to benefits if you are self-employed; extra local support for the most vulnerable; tax cuts, loans and grants for businesses to protect people’s jobs—comprehensive action, and if more is needed I will take it. I know that all Members of this House will want to give this plan their full support.
Before I turn to the economic forecasts, I hope the House will join me in thanking the Office for Budget Responsibility, and Robert Chote in particular. After 10 years, this is his last Budget in charge. He has led the OBR with dedication and integrity, and established that institution as one that is respected around the world.
Madam Deputy Speaker, let me now turn to the growth forecasts. Since the OBR closed its forecast, it has become clear that the spread of coronavirus will have a significant impact on our economy in the coming quarters. But given that the nature of the shock is temporary, I still want to set out for the House the OBR’s judgment on the economy over the medium term. Even before coronavirus hit, we were facing a slowing world economy. There has been, across developed economies, including here in the UK, a decade-long slowdown in productivity. This, combined with the political uncertainty of the last three years, which affected business investment in particular, has led the OBR to downgrade our productivity over the forecast period and to slightly reduce GDP growth, compared with the March 2019 forecast.
But while the world may slow down, we will act here with a response that is brave and bold, taking decisions now for our future prosperity. We are investing in world-class infrastructure and to lead the world in the industries and technologies of the future. The central judgment that I am making today is to fund an additional £175 billion over the next five years for our future prosperity. The OBR has said that as a direct result of the plans that I am announcing, growth over the next two years will be half a percentage point higher than it otherwise would have been. For the benefit of the House, the GDP forecast, without fully accounting for the impact of coronavirus, would have led to growth of 1.1% in 2020, 1.8% in 2021, then 1.5%, 1.3% and 1.4% in the following years. And today the OBR has made an estimate it has never made before. It has said, in its words, that today’s
“large planned increase in public investment should boost potential output too”.
If future Governments have the same determination to continue our approach, the UK’s long-term productivity will increase by 2.5%.
The OBR has confidence in the long-term future of our economy, and so do I. More investment and higher growth mean more jobs and higher wages. We already have more people working in our economy than ever before, women’s employment is at a record high, and since 2010 full-time weekly wages have grown faster in every region and nation of the UK than they have in London. The OBR expects that half a million people more will be in work by 2025. Wages are expected to grow in real terms in every year of the forecast period. The story of this Government has been the story of a national jobs miracle—and given the last few weeks that I’ve had, I am all in favour of jobs miracles.
On inflation, the OBR forecasts 1.4% this year, increasing to 1.8% next year and then, for the rest of the forecast period, remaining on or around target. I am sure that the whole House will join me in taking the opportunity to thank Mark Carney, the Governor of the Bank of England, for his seven years of dedicated public service. We congratulate him on his new role as finance adviser for COP26 and welcome his successor Andrew Bailey, who takes up his post on Monday.
Let me turn now to the fiscal forecasts. The economic impacts of coronavirus remind us of the importance of fiscal responsibility. Our public finances are strong, with the deficit down from 10% in 2010 to less than 2% last year. Our economy is well-prepared for the future—and it is well-prepared because of 10 years of Conservative-led Governments and Conservative Chancellors.
I too will always act responsibly with the nation’s finances. But it is important that we update our fiscal framework to remain at the leading edge of international best practice. Our economic security depends on maintaining the following principles: low and stable inflation, delivering price stability; fiscal sustainability; and independent, effective institutions like the Bank of England and the OBR. These features of our framework will always be protected. But there is a live global debate about what our low interest rate environment means for fiscal strategy, about the case for fiscal policy to play a more active role in stabilising the economy, and about the best ways to measure productivity-enhancing investment in the economy, such as human capital or measuring value on the public balance sheet. So I want to take time to consider these questions over the coming months so that our fiscal framework allows us to make the right long-term decisions for our economic security and prosperity. I will review the fiscal framework, consulting widely with a range of experts, and will report back in the autumn if I conclude that any changes are necessary.
But at the same time, credibility comes as much from what we do as what we say. We were elected on a manifesto that promised to meet a specific set of fiscal rules. Today’s Budget is about delivering our promises. That is why, despite the speculation, today’s Budget is delivered not just within the fiscal rules in our manifesto, but with room to spare. I am setting the amount that the Government will spend for the rest of this Parliament within those rules as well. Today the OBR reports a current budget surplus in every one of the next five years, and in the target year of 2022-23 we have fiscal space of nearly £12 billion. The OBR forecasts that borrowing will increase slightly from 2.1% of GDP in 2019-20 to 2.4% in 2020-21 and 2.8% in 2021-22. It then falls to 2.5%, 2.4% and 2.2% in the following years. The OBR forecasts that headline debt will be lower at the end of the Parliament than it is today, falling from 79.5% this year to 75.2% in 2024-25.
I am sure the House will understand that, given how urgently we have developed our economic response to the coronavirus, that package of measures has not yet been captured in the fiscal forecasts, and nor have the fiscal impacts of the Bank’s actions. But the House will also note that the target year for our current budget fiscal rule is not until 2022-23. So even within our current framework, I have the flexibility to act as required over the next two years.
Madam Deputy Speaker, as we enter a period of challenge, we start from a position of strength: the economy growing, more jobs, higher wages, stable inflation and sound public finances. We promised to manage our economy responsibly, and we are getting it done. This Budget responds, at scale, to the immediate threat of coronavirus and it reports on an economy whose foundations are strong. It is a Budget that provides for security today, but let me now outline our plan for prosperity tomorrow. This is the first Budget of a new decade; the first in almost 50 years outside the European Union; and the first of this new Government. At the election, we said that we needed to be one nation. While talent is evenly spread, opportunity is not, and we need to fix that. This is a Budget that will deliver on our promises to the British people, and it is the Budget of a Government who get things done.
We promised to get Brexit done, and we got it done. We promised to let hard-working families keep more of what they earn. This Budget gets it done. We promised to back businesses, to innovate, to invest and to trade. This Budget gets it done. We promised to invest in science and research. This Budget gets it done. We promised to deliver green growth and protect our environment. This Budget gets it done. We promised to level up, with new roads, railways, broadband and homes. This Budget gets it done. And, yes, we promised record funding for our NHS and public services. This Budget gets it done. This Government deliver on their promises and get things done.
Our plan for prosperity starts immediately by putting more money in people’s pockets. It was a Conservative Government who in 2016 introduced the national living wage, giving Britain’s lowest-paid workers the biggest pay rise in 20 years. And in just three weeks’ time, around 2 million workers will see their wage rise again by 6.2%. For a full-time worker, that is a pay rise of almost £1,000. That is the biggest cash increase ever, but we have promised to go further.
Today we are publishing a new remit for the independent Low Pay Commission. It now has a formal target that means that as long as economic conditions allow, by 2024 the national living wage will reach two thirds of median earnings. On current forecasts, that means a living wage of over £10.50 an hour. We promised to end low pay. We are getting it done. As people earn more, we will also cut taxes on their wages. I am increasing, in just four weeks’ time, the national insurance threshold from £8,632 to £9,500. That is a tax cut for 31 million people, saving a typical employee over £100. Taken together, our changes to the national living wage, income tax, and now national insurance mean that someone working full time on the minimum wage will be more than £5,200 better off than in 2010. The Conservatives are the real workers’ party.
I can also confirm that now we have left the EU, I will abolish the tampon tax. From January next year, there will be no VAT whatsoever on women’s sanitary products. I congratulate all hon. and right hon. Members who campaigned for this, including the former Member for Dewsbury who led the charge.
Let me turn now to duties. Scotch whisky is a crucial industry and our largest food and drink export. My Scottish Conservative colleagues, including my hon. Friend the Member for Moray (Douglas Ross), have highlighted to me the impact that the recent US tariffs are having. We will continue to lobby the US Government to remove these harmful tariffs, but in the meantime I am announcing today £1 million of support to promote Scottish food and drink overseas and £10 million of new R&D funding to help distilleries go green. To further support the industry, I can also announce that this year the planned increase in spirits duty will be cancelled.
Pubs are at the centre of community life, but too many have closed over the past decade. We have already promised to introduce a business rates “pub discount” of £1,000 for small pubs, but I have heard calls from many hon. and right hon. Members, including my hon. Friend the Member for Dudley South (Mike Wood), that we need to do more, especially given the possible impact of coronavirus on our pubs. Today I can announce that, exceptionally for this year, the business rates discount for pubs will not be £1,000; it will be £5,000. I am also pleased to announce that the planned rise in beer duty will be cancelled, and because of decisions that I have taken elsewhere in this Budget I am also freezing duties for cider and wine drinkers as well. For only the second time in almost 20 years, that is every single one of our alcohol duties frozen.
I have heard representations that after nine years of being frozen, at a cost of £110 billion to the taxpayer, we can no longer afford to freeze fuel duty. I am certainly mindful of the fiscal cost and the environmental impacts, but I am taking considerable steps in this Budget to incentivise cleaner forms of transportation. Many people still rely on their cars, so I am pleased to announce today that for another year fuel duty will remain frozen. Compared with 2010 plans, that is a saving of £1,200.
Wages up; national insurance cut; the tampon tax abolished; spirits duty frozen; beer duty frozen; wine and cider duty frozen; fuel duty frozen. We promised to cut taxes and the cost of living and we got it done.
As Conservatives, we know that to put more money in people’s pockets we need a thriving private sector. That is what drives growth; that is what creates jobs; that is what lifts living standards. The second part of our plan for prosperity is to unleash the power of business. Businesses need support to start up, grow and export. Today I provide: £130 million of new funding to extend start-up loans; £200 million for the British Business Bank to invest in scale-ups; another £200 million for life sciences; more money for growth hubs; 21 cities with British Library business support; £5 billion of new export loans for businesses; and dedicated trade envoys representing the north, the midlands, Wales and the west of England in our embassies around the world.
Businesses also need a fair tax system. We were elected on a manifesto that promised to review and reform entrepreneurs’ relief. I have now completed that review, and here is what we are going to do. Entrepreneurs’ relief is: expensive, at a cost of over £2 billion a year; ineffective, with fewer than one in 10 claimants saying that the relief was an incentive to set up a business; and unfair, with nearly three quarters of the cost going to just 5,000 individuals. Just because it is called entrepreneurs’ relief does not mean that it is entrepreneurs who mainly benefit. For all these reasons, I have heard representations that I should completely abolish it. The Institute for Fiscal Studies has criticised it. The Resolution Foundation called it
“the UK’s worst tax break”.
I am sympathetic to that argument, but, at the same time, we should not discourage those genuine entrepreneurs who do rely on the relief. We need more risk-taking and creativity in this country, not less. So I have decided not to fully abolish entrepreneurs’ relief today. Instead, I will do what the Federation of Small Businesses called “a sensible reform” and reduce the lifetime limit from £10 million to £1 million. A total of 80% of small business owners are unaffected by today’s changes. Those reforms save £6 billion over the next five years, and I am giving almost all of that money straight back to business through three additional measures.
The research and development expenditure credit will be increased from 12% to 13%—a tax cut worth £2,400 on a typical R&D claim. The structures and buildings allowance will be increased from 2% to 3%, giving an extra £100,000 of relief if someone is investing in a building worth £10 million. And, to cut taxes on employment, I will deliver our promise to increase the employment allowance by a third to £4,000. That is a tax cut this April for nearly half a million small businesses. That is another step towards the dynamic, low-tax economy that we want to see. We promised to cut taxes on business. We are getting it done.
To help our businesses lead the next generation of high-productivity industries, we also need to invest now in the technologies of the future. We are the country of Newton, Hodgkin and Turing. Ours is a history filled with ideas, invention and discovery, and it is truly a national history. The first steam railway ran between Stockton and Darlington. The first television was invented by a Scot. A Welshman invented the first hydrogen fuel cell. Jocelyn Bell Burnell, born in Northern Ireland, discovered the first radio pulsars.
To compete and succeed, over the next decade and beyond, we need to recapture that spirit, so the third part of our plan for prosperity is to invest in ideas.
In our manifesto we made a promise to double investment in research and development to £18 billion. I will not be doing this today. Instead, I will increase investment in R&D to £22 billion a year. That is the fastest and largest increase in R&D spend ever. As a percentage of GDP, it will be the highest in nearly 40 years—higher than the US, China, France and Japan—and a major step towards our target of increasing public and private investment in R&D to 2.4% of GDP. And we won’t wait to get started. Next year, funding will increase by 15%, the fastest year-on-year growth on record. Detailed allocations of our new investment in ideas will be set out at the spending review, but I can make some announcements today.
I am investing £1.4 billion in our world-leading science institute at Weybridge, where, as we speak, they are working to analyse samples of coronavirus. To secure our leadership in the technologies of the future, I am investing over £900 million in nuclear fusion, space and electric vehicles. As we invest in ideas, we are also changing the way we fund science in this country. I can confirm that we will invest at least £800 million in a new blues-skies funding agency here in the UK, modelled on the extraordinary Advanced Research Projects Agency in the US.
As we invest in ideas, we are also changing where we fund science in this country. Today, half of R&D funding goes to London, the east and the south-east of England, so we are investing £400 million of new funding in high-quality research, with much of that incremental funding going to our brilliant universities around the country. We promised to make this country one of the scientific research centres of the world—we’re getting it done.
There can be no lasting prosperity for our people if we do not protect our planet, so the fourth part of our plan for prosperity is to create the high-skill, high-wage, low-carbon jobs of the future; to level up, with completely new industries in our regions and nations; and to raise our productivity and lift our quality of life even as we cut our emissions. The Treasury’s net zero review will set out the Government’s strategic choices ahead of COP26 later this year. Today’s Budget takes the first steps.
First, we will increase taxes on pollution. Electricity is now a cleaner energy form than gas, but our climate change levy, paid by companies, taxes electricity at a higher rate. As another step towards equalising the rates and encouraging energy efficiency, from April 2022 I am freezing the levy on electricity and raising it on gas. I will support the most energy-intensive industries to transition to net zero by extending the climate change agreements scheme for a further two years. To tackle the scourge of plastic waste, we will deliver our manifesto promise to introduce a new plastics packaging tax. From April 2022, we will charge manufacturers and importers £200 per tonne on packaging made of less than 30% recycled plastic. That will increase the use of recycled plastic in packaging by 40%—equal to carbon savings of nearly 200,000 tonnes.
Let me now turn to red diesel. The red diesel scheme allows selected users to pay duty of just over 11p per litre for diesel, compared to almost 58p per litre for everyone else. But the sectors using red diesel are some of the biggest contributors to our air quality problem, emitting nearly 10% of the noxious gases polluting the air of cities like London. This is a tax relief on nearly 14 million tonnes of carbon dioxide every year—the same as the entire population of London and Greater Manchester taking a return flight to New York. It has been a £2.4 billion tax break for pollution that has also hindered the development of cleaner alternatives, so I will abolish the tax relief for most sectors. That is the right thing to do, but I recognise that it will be a big change for some industries, so, firstly, this change will not take effect for two years, giving businesses time to prepare. Secondly, I have heard the concerns about agriculture, particularly from the National Farmers Union and rural colleagues—including, indeed, the Parliamentary Secretary to the Treasury, my right hon. Friend the Member for Sherwood (Mark Spencer)—so I have decided that agriculture will retain the relief. I will also keep the relief for rail and for domestic heating, and there will be no impact on fishing. We will consult over the summer with other sectors. Thirdly, to help develop cleaner alternatives to red diesel and other fossil fuels, we will more than double R&D investment in the energy innovation programme to £1 billion.
As well as taxing pollution, we will invest in and cut taxes on clean transport. We are introducing a comprehensive package of tax and spend reforms to make it cheaper to buy zero or low emission cars, vans, motorbikes and taxis; we are investing £300 million in tackling nitrogen dioxide emissions in towns and cities across England; and we are investing £500 million to support the roll-out of new rapid charging hubs, so that drivers are never more than 30 miles away from being able to charge up their car. Taken together, this Budget invests £1 billion in green transport solutions.
Many Members around this House will have seen the devastating impact of the recent floods on homes and businesses in their own constituencies, particularly the hon. Member for Barnsley East (Stephanie Peacock), my hon. Friends the Members for Calder Valley (Craig Whittaker) and for Telford (Lucy Allan), and my right hon. Friend the Member for Ludlow (Philip Dunne). I can announce today that I am making £120 million available immediately to repair all defences damaged in the winter floods. To support those areas that have been repeatedly flooded, I am also providing £200 million of funding directly to local communities to build their flood resilience. To protect people and over 300,000 properties, I am doubling our investment in flood defences over the next six years to £5.2 billion.
We are also supporting natural habitats such as woodlands and peat bogs. I can confirm today that to protect, restore and expand these wonderful habitats, and capture carbon, we will provide £640 million for a new nature for climate fund. Over the next five years, we will plant around 30,000 hectares of trees—that is a forest larger than Birmingham—and restore 35,000 hectares of peatland. This Government intend to be the first in history to leave our natural environment in a better state than we found it.
I can make one further announcement on green growth. Carbon capture and storage is precisely the kind of exciting technology where Britain can lead the world over the next decade. I can announce today that we will invest at least £800 million to establish two or more new carbon capture and storage clusters by 2030. Once up and running, these clusters will store millions of tonnes of carbon dioxide that would otherwise be released into the atmosphere. The new clusters will create up to 6,000 high-skill, high-wage, low-carbon jobs in areas like Teesside, Humberside, Merseyside or St Fergus in Scotland. It is levelling up in action.
Green jobs; better flood defences; cheaper electric vehicles; innovative new technologies. We promised to protect our environment—we’re getting it done.
As a party, we know that talent is evenly spread in our country, but that opportunity is not. We have to put that right. We need to build the infrastructure that will lay the foundations for a new century of prosperity. We need to grab the opportunity to upgrade, to improve, to enhance and to level up. That starts today with the next part of our plan, as we get Britain building.
Over the next five years, we will invest more than £600 billion in our future prosperity. Public net investment will, in real terms, be the highest it has been since 1955. Take the average amount we have invested over the last 40 years in real terms—we are tripling it. Capital budgets in 2024-25 alone will reach over £110 billion. I will set out the detailed capital allocations at the spending review, but I am taking three major steps today. First, we are going to change the whole mindset of Government. To make sure that economic decision making reflects the economic geography of the country, we are reviewing the Treasury’s Green Book. We will have Treasury offices in Scotland, Wales and Northern Ireland. I can announce today that we are also opening a new economic campus in the north, with over 750 staff from the Treasury and the Departments for Business, Local Government and Trade. And we will not stop there: our ultimate ambition is to move 22,000 civil servants outside central London.
Secondly, because of this changed mindset, we will invest more in our nations, cities and towns. Today’s Budget provides an extra £640 million for the Scottish Government, £360 million for the Welsh Government, and £210 million for the Northern Ireland Executive. I am announcing £242 million of funding for new city and growth deals, taking our investment in these deals to more than £2.7 billion. We have agreed today a new devolution deal in West Yorkshire, with a directly elected Mayor for the region. And to make sure that it is not just Londoners who benefit from the kind of long-term transport deal that helped Transport for London, I am announcing today that the new West Yorkshire Mayor will, along with the seven other metro Mayors, get new, London-style funding settlements worth £4.2 billion. These settlements are in addition to the transforming cities fund, which will invest over £1 billion in local transport in 12 further cities, including Stoke, Preston, Derby and Nottingham, and Southampton.
Thirdly, we are going to build broadband, railway, roads: if the country needs it, we will build it. Today’s Budget provides £5 billion to get gigabit-capable broadband into the hardest-to-reach places, and £510 million of new investment into the shared rural mobile phone network, which means that in the next five years 4G coverage will reach 95% of the country. Let me thank my right hon. Friend the Culture Secretary, who will get this done.
We are also going to build better railways, with spades going in the ground on HS2, our commitment to fund the Manchester-Leeds leg of Northern Powerhouse Rail, funding today for a new station at Cambridge South and the midlands rail hub, Darlington station moving to the next stage of development and approval, and funding to make a dozen train stations more accessible.
And there is more money for our roads too. Today I am announcing the biggest ever investment in strategic roads and motorway—over £27 billion of tarmac. That will pay for work on over 20 connections to ports and airports, over 100 junctions, and over 4,000 miles of road. I am also announcing new investment in local roads, alongside a new £2.5 billion pothole fund—that is £500 million every single year: enough to fill, by the end of the Parliament, 50 million potholes. The details of all the road schemes that I am funding will be published later today, and I thank my right hon. Friend the Transport Secretary for all his efforts.
Our ambition is truly national: the A417 in the south-west; the A428 in the east; the A46 in the midlands; unclogging Manchester’s arteries; freeing the traffic north of Newcastle; and—something my north and mid-Wales colleagues will be particularly pleased to hear—we are protecting beautiful villages in the Welsh borders as we finally build the Pant-Llanymynech bypass. We promised to get Britain moving, and we are getting it done.
There is one more road I would like to mention. It is one of our most important regional arteries. It is one of those totemic projects symbolising delay and obstruction. Governments have been trying to fix it since the 1980s. Every year, millions of cars crawl along it in traffic, ruining the backdrop to one of our most important historic landmarks. So to the many hon. and right hon. Members who have campaigned for this moment, I say this—the A303: this Government are going to get it done.
Today we have announced the biggest programme of public investment ever: £27 billion for strategic roads this Parliament, funding to fill 50 million potholes, new railways, new stations, £5 billion for broadband, a new Mayor for West Yorkshire— investment in every region and nation of our United Kingdom. We promised to get Britain building: this Budget is getting it done.
Only by having a plan for prosperity will we grow the economy. Only by having a growing economy can we invest in our public services. And only by investing in our public services, the people’s priority, can we send a clear message to those who rely on them: you are our priority. Our public services are one of the most important tools by which we, the Government, can level up and spread opportunity, so that no matter who you are or where you were born, you will have every chance to succeed in our modern, dynamic economy.
And that starts with education. We have already provided schools with a three-year settlement worth over £7 billion by 2022. My right hon. Friend the Education Secretary is taking forward our plans to increase per-pupil funding next year by an average of over 4%. Today I am providing every region in the country with funding for specialist 16-to-19 maths schools; £25,000 per year, on average, for each secondary school to invest in arts activities; £30 million a year to improve PE teaching; and £8 million for the Football Foundation’s scheme to build new pitches for around 300,000 people to play on. And to support families, I am providing £2.5 million to fund research into how best to integrate family services, including family hubs, championed by my hon. Friend the Member for Congleton (Fiona Bruce).
Next, I would like to take the opportunity to pay tribute to my predecessor and friend, my right hon. Friend the Member for Bromsgrove (Sajid Javid). One of the issues he is most passionate about is levelling up further education. At the spending round, he increased funding for 16-to-19 education by £400 million. Today I can secure his legacy, with £1.5 billion of new capital over five years to dramatically improve the condition of our entire FE college estate. My predecessor wanted to level up further education—Saj, we’re getting it done.
I have one final education announcement. I have talked today about Britain being the country of scientists, inventors and engineers, but we are also the country of Shakespeare, Austen and Dahl. Our greatest export to the world is our language, our greatest asset is the free exchange of ideas and debate, and our greatest responsibility is the education of our young people. A world-class education will help the next generation thrive, and nothing could be more fundamental to that than reading. And yet digital publications are subject to VAT. That cannot be right. So today I am abolishing the reading tax. From 1 December, just in time for Christmas, books, newspapers, magazines or academic journals, however they are read, will have no VAT charge whatsoever. There will be no VAT on historical fiction by Hilary Mantel, manuals and textbooks like “Gray’s Anatomy”, or, indeed, works of fantasy like John McDonnell’s “Economics for the Many”. The irony is, it sold so few, it is literally his own little-read book.
Our second priority is to make sure people have affordable and safe housing. Today I can make good our promise to extend the affordable homes programme, with a new multi-year settlement of £12 billion. This will be the largest cash investment in affordable housing in a decade. To support local authorities to invest in their communities, I am cutting interest rates on lending for social housing by 1 percentage point, making available more than £1 billion of discounted loans for local infrastructure, and consulting on the future of the Public Works Loan Board. I am confirming nearly £1.1 billion of allocations from the housing infrastructure fund to build nearly 70,000 new homes in areas of high demand across the country, and a new £400 million fund for ambitious Mayors, like Andy Street in the west midlands, to build on brownfield sites. And tomorrow my right hon. Friend the Housing Secretary will set out for the House comprehensive reforms to bring our planning system into the 21st century.
But the housing challenge is most acutely felt by those with no home at all. So today, I am confirming £650 million of funding to help rough sleepers into permanent accommodation. That will buy up to 6,000 new places for people to live, enable a step change in support services and help us meet our promise to end rough sleeping in this Parliament. To fund those rough sleeping measures, I am confirming today that our manifesto promise to introduce a new stamp duty surcharge for non-UK residents will be introduced at a rate of 2% from April 2021.
I have one further measure to announce on housing. Two and a half years on, we are still grappling with the tragic legacy of Grenfell. Last year, we allocated £600 million to remove unsafe aluminium composite material, or ACM, from high-rise residential buildings. Today, I go further. Expert advice is clear that new public funding must concentrate on removing unsafe materials from high-rise residential buildings. So today, I am creating a new building safety fund worth £1 billion. That is what the experts have called for. That is what the Select Committee has called for. That is even what the Opposition have called for. That new fund will go beyond dealing with ACM to make sure that all unsafe combustible cladding will be removed from every private and social residential building above 18 metres high. My right hon. Friend the Housing Secretary will spearhead our efforts to make sure that developers and building owners do their fair share as well.
There is no more cherished public service than our NHS. Whatever resources the NHS needs to deal with coronavirus, it will get. We all benefit from a thriving health service, so it is right that we ask everyone to contribute. Business benefits from our NHS. So, as promised in our manifesto, the corporation tax rate will not be cut this year but will remain at 19%—still the lowest rate in the G20. Migrants benefit from our NHS, and we all want them to do so, but it is right that what people get out, they also put in. There is a surcharge already, but it does not properly reflect the benefits that people receive. So, as we promised in our manifesto, we are increasing the immigration health surcharge to £624, with a discounted rate for children. To raise further funds for the NHS, I am announcing a package of measures today to clamp down on aggressive tax avoidance, evasion and non-compliance, including extra funding for HMRC to secure £4.4 billion of additional revenue.
Those extra contributions allow me to take three further steps to support our health services. First, mental health support can be critical for many people, and particularly for our veterans. Thanks to the campaigning of my hon. Friends the Members for Wolverhampton South West (Stuart Anderson) and for Harwich and North Essex (Sir Bernard Jenkin), I will be supporting veterans with mental health needs with a £10 million donation to the Armed Forces Covenant Fund Trust. I am also confirming today that, to encourage employers to provide veterans with job opportunities, we will introduce a new national insurance relief.
Secondly, I have listened to concerns from all sides of the House that the pensions tax system is preventing doctors from taking on more hours. To significantly reduce the number of people who the tapered annual allowance affects, I am increasing both taper thresholds by £90,000, removing anyone with income below £200,000. Based on their vital work for the NHS, that will take around 98% of consultants and 96% of GPs out of the taper altogether. At the same time, I am reducing the minimum annual allowance to £4,000, which will only impact those with incomes above £300,000. This is a £2 billion commitment that supports our hard-working doctors.
Let me turn now to the overall funding settlement for the NHS. We have already provided the NHS with a record funding increase of £34 billion over five years—the biggest cash increase in public services since the second world war. Today, I can go further. I can announce over £6 billion of new funding in this Parliament to support the NHS. That new money will deliver 50,000 more nurses, 50 million more GP surgery appointments and work starting on 40 new hospitals—you heard that right: 40 new hospitals. We promised to back the NHS, and this Budget gets it done.
I have one last point to make about public services. We have now left the EU. We promised to get Brexit done, and we got it done. We promised to regain control of the money we send to Brussels, and for the first time ever, today’s OBR forecast shows that the billions of pounds we would have sent to the EU can now be spent on our priorities. Today, I am launching the next spending review, to conclude in July, setting out detailed spending plans for the Parliament.
Let me set out for the House our new totals for spending on public services. The OBR has said that today’s Budget will be the largest sustained fiscal boost for nearly 30 years. Next year, day-to-day departmental spending will grow at the fastest rate in 15 years. Over the spending review period, it is set to grow at the fastest rate since 2004, with an average growth rate in real terms of 2.8%—twice as fast as the economy. That means that by the end of this Parliament, day-to-day spending on public services will be £100 billion higher in cash terms than it is today. More police—safer streets. More nurses—better healthcare. More teachers—better education. The House now knows what the electorate already know: the Conservatives are the party of public services.
We are at the beginning of a new era in this country. We have the freedom and the resources to decide our own future—a future where we unleash the energy, inventiveness and creativity of all the British people, and a future where we look outwards and are confident on the world stage. That starts right now with our world-leading response to the coronavirus. This is a Budget delivered in challenging times. We will rise to this moment. We will get through this together. This Budget delivers security today, but it also lays the foundations for prosperity tomorrow.
This is just the start. Over the next few months, we will tackle the big issues head-on. From our national infrastructure strategy to social care and further devolution, this is the Budget of a Government that get things done—creating jobs, cutting taxes, keeping the cost of living low, investing in our NHS, investing in our public services, investing in ideas, backing business, protecting our environment, building roads, building railways, building colleges, building houses and building our Union. This is a Budget that delivers on our promises—a people’s Budget from a people’s Government—and I commend it to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Rates of tobacco products duty (Motion No. 40);
(b) Vehicle excise duty (motor caravans) (Motion No. 44).—(Rishi Sunak.)
Question agreed to.
The Chairman of Ways and Means (Dame Eleanor Laing)
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on the succeeding days. The Questions on this motion and the remaining motions will be put at the end of the Budget debate next Tuesday 17 March.
Office for Budget Responsibility Forecasts
Rishi Sunak Excerpts(4 years, 9 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rishi Sunak)
Today, the Office for Budget Responsibility (OBR) wrote to me setting out the options for their second forecast for the 2019-20 financial year, consistent with fulfilling their duties under the Budget Responsibility and National Audit Act 2011 (BRNA). The BRNA states that the OBR is legally required to produce two economic and fiscal forecasts in each financial year. A forecast was originally planned alongside the autumn Budget that was cancelled due to the general election. The first forecast of the year will now be produced alongside the upcoming spring Budget. However, to fulfil its duty the OBR must produce another forecast before the end of the financial year. I have commissioned the OBR to publish a second forecast on 13 March which will focus on providing updated information on debt interest. The second forecast will be laid in Parliament on 13 March with copies available in the Vote Office and Printed Paper Office. A copy of the letter from the OBR and my response will be placed in the Libraries of both Houses.
[HCWS132]
Oral Answers to Questions
Rishi Sunak Excerpts(4 years, 9 months ago)
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Nicola Richards (West Bromwich East) (Con)
The Chief Secretary to the Treasury (Rishi Sunak)
Better transport is central to our ambition to level up and spread opportunity across the United Kingdom. That is why the Chancellor will be unveiling, alongside his Budget, the national infrastructure strategy, which will set out further details of our plan to increase capital investment to record levels and transform the UK’s infrastructure.
Katherine Fletcher
South of Preston, there is only a single crossing of the River Ribble and a single-track bridge crossing the River Douglas, creating massive choke points for the residents and workers of Lancashire. Will my right hon. Friend consider additional bridges at these crossing points, which are strategically important for the whole of Lancashire as well as South Ribble?
Rishi Sunak
My hon. Friend is absolutely right about the importance of relieving congestion for improving day-to-day quality of life and driving economic growth. I am pleased that last year her constituency benefited from a £30 million investment to do just that. But there is always more we can do, and I would urge her to consider the Department for Transport’s pinch points fund.
Alicia Kearns
Places such as Melton Mowbray in my constituency have very low unemployment thanks to a thriving food manufacturing sector and the business-friendly policies of this Government, but we need to see wages rise locally. What investment has my right hon. Friend’s Department made to make sure that local councils can provide the transport needed, particularly buses, so that people can get to work and revitalise our high streets?
Rishi Sunak
I am delighted to hear about the economic growth that is happening in my hon. Friend’s constituency. I know that her local councils are a key part of driving that. I am pleased to say that the Government announced today a £5 billion package to support local transport infrastructure such as buses and cycleways, alongside our existing £3.6 billion towns fund, which 16 different places across the east midlands have benefited from.
Nicola Richards
Andy Street’s vision to revolutionise our transport networks in the west midlands, coupled with the continuation of the HS2 project, will hugely benefit my constituents in West Bromwich East, especially those in Great Barr. The vision that Andy set out only last week included the expansion of the West Midlands Metro system. Ahead of the Budget next month, will my right hon. Friend look at what further funding can be made available to level up our transport infrastructure in the west midlands?
Rishi Sunak
My hon. Friend is right to highlight the importance of local intra-city transportation. Obviously the Prime Minister will be making a statement later about national infrastructure. We heard what Andy Street had to say. We are engaging with the Mayor on his exciting plans for intra-city transport and the expansion of the metro line in the west midlands area.
Chris Elmore (Ogmore) (Lab)
May I press the Chief Secretary on infrastructure funding for south Wales, and particularly our railways? I have been asking for three years for additional investment in station improvements, electrification and the level crossing issue in my constituency. If there is any additional funding for infrastructure, please do not forget Wales.
Rishi Sunak
I am happy to tell the hon. Gentleman that this Government are committed to improving transport infrastructure across the United Kingdom. Obviously, some matters are devolved. Network Rail has a £48 billion plan for rail infrastructure. I would be happy to hear from him about the specific projects that he is interested in taking up with it.
Judith Cummins (Bradford South) (Lab)
Reports over the weekend that the Bradford city centre stop is to be dropped from the Northern Powerhouse Rail route are extremely concerning. Given the importance of NPR to any improved transport infrastructure, can the Minister confirm here today that the Government’s preferred route still includes Bradford?
Rishi Sunak
I am a passionate believer in improving east-west connectivity across the north. I am pleased to say that I met the leader of Bradford Council just the other week. Bradford has an exciting future as one of the younger cities in the country. I believe that the plans that NPR has put forward include Bradford. We are happy to look at those. Transport for the North is actively engaging with local stakeholders on the various routes for improving connectivity between Manchester and Leeds, and that includes Bradford city centre.
Sammy Wilson (East Antrim) (DUP)
What progress has been made on the feasibility study on a bridge between Northern Ireland and Scotland, as promised by the Prime Minister? More immediately, have there been any discussions with the Scottish Government on the upgrading of the A75—an important road link to Northern Ireland and important to the economic corridor in south-west Scotland?
Rishi Sunak
The Prime Minister is passionate about improving connectivity across the United Kingdom. As my right hon. Friend the Member for East Antrim (Sammy Wilson) will know, that is one particular project that the Prime Minister has expressed interest in and he can assume that we are busy at work fleshing out what it might look like.
John Howell (Henley) (Con)
Bambos Charalambous (Enfield, Southgate) (Lab)
The Chief Secretary to the Treasury (Rishi Sunak)
The financial health of local authorities remains a priority for the Government and for me personally as a former local government Minister. I am pleased to say that next year’s local government finance settlement outlines and will deliver the biggest year-on-year increase in local government spending power for over a decade.
Bambos Charalambous
For over 10 years, Enfield has been significantly underfunded, which has had a huge impact on the provision of local services. The proposed settlement goes nowhere near addressing the shortfall. Will the Minister meet me and the Enfield Borough Over 50s Forum to discuss Enfield’s needs?
Rishi Sunak
I am pleased to say that the Ministry of Housing, Communities and Local Government is undertaking a review of the funding formula for local government, and I am sure that Enfield Council has participated in that. There will be a formal consultation later this year, and I encourage the council to input its particular needs if those are not adequately captured by today’s formula. In the forthcoming financial year, Enfield can look forward to an almost 6% cash increase in the spending power it has available for its residents and communities.
Peter Dowd (Bootle) (Lab)
In addition to the Secretary of State for Housing, Communities and Local Government, has the Chief Secretary had any discussions with the representatives of Hyndburn, Burnley, Leigh, Blackpool South, Colne Valley, Durham North, Keighley, Stoke-on-Trent Central and North or Workington concerning the adequacy of the funding for the councils covering their constituencies?
Rishi Sunak
In my previous role I had many conversations with councils up and down the country. Indeed, in this job I take representations from the Local Government Association, the District Councils’ Network and the Core Cities consortium, among others. The point is that this will be an evidence-based formula that looks at the various needs of all authorities up and down the country. It is being done in partnership with independent academics to help us arrive at a formula that is fair for every part of the country and every local authority.
Peter Dowd
Clearly those discussions were not very productive, were they? I can tell hon. Members that, according to the LGA, the likely outcome is 6.6, 6.6, 6.5, 6.4, 6.2, 10, 10, 9 and 4. I am referring not to Olympic ice skating marks, but to the additional millions that will be lost respectively by the councils of the hon. Members I listed. In all, 37 councils of the 50 new Tory MPs—that is 70%—are set to lose millions under the Government’s so-called fair funding formula. Did the Chief Secretary mention that to his new colleagues, or has he been too busy keeping an eye on the potential job vacancies?
Rishi Sunak
The figures the hon. Gentleman refers to are pure speculation. The formula has not been concluded yet, so it is a bit difficult to talk about the conclusions in advance of that. There will be a consultation. Regardless of the type of area that any Member in this Parliament represents—rural or urban, north or south—it will be an evidence-based formula. All the various criteria that drive local government spend, whether it is rurality or deprivation, will be taken into account. All Members can have input into that process and can have confidence that the final formula will be fair and, importantly, evidence-based.
Derek Thomas (St Ives) (Con)
The Treasury team will know how difficult it is to get a funding formula to operate for places like the Isles of Scilly, which are remote and sparsely populated. Good work is being done to bring health and social care together under one roof. Can the Minister shed more light on how difficult areas such as this can be funded in the future?
Rishi Sunak
My right hon. Friend the Chancellor met my hon. Friend and his local authority recently to discuss this issue, and I have taken representations from them in the past. My hon. Friend is right that rurality and the particular geographic challenges posed by his constituency should be taken into account in the new formula. I am sure that my right hon. Friend the Secretary of State for Housing, Communities and Local Government will do that when he looks at all the representations in the spring.
Harriett Baldwin (West Worcestershire) (Con)
In addition to the Secretary of State for Housing, Communities and Local Government, has my right hon. Friend had a chance to speak to the Secretary of State for Education about the pressure on school budgets from the local government pension scheme? On a visit to the excellent Hanley Castle High School in my constituency last week, I discovered that almost half its payroll is covered by the local government pension scheme and that it is experiencing a lot of budgetary pressure from that.
Rishi Sunak
The local government pension scheme is fully funded, which means that all local authorities contribute on an annual basis. It is right that that is taken into account when setting annual budgets. I am pleased that the Government have outlined a three-year school settlement, which will take school funding up by £4 billion in real terms over the forthcoming spending period. Those extra resources will allow schools to deal with the pension pressure and invest in our classrooms, which is where the money needs to go.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It was extraordinary to hear the Treasury Minister talk about the biggest year-on-year increase in funding after a decade of major cuts. He knows, because he can do the maths, that that is nowhere near making any recompense. The Public Accounts Committee looked in detail at local government spending and we concluded that in simple terms, it was being squeezed massively, particularly for children’s and adult’s social services. When will he acknowledge that for many things that his Government purport to want to deliver, local government is key and that it needs sustainable and increased funding to make up for the cuts of the previous decade?
Rishi Sunak
Local government deserves enormous praise for the hard work that it did in helping to restore this country’s public finances to a sustainable state. We all know why we were in that situation a decade ago, but we can now look forward with confidence. Local government is benefiting from a very significant increase in spending power this year. The hon. Lady is right to highlight the pressure on social care, which is one of the largest areas of spend, which is why the Government have just committed an extra £1 billion in social care grant to help local authorities to alleviate that pressure this year and into the future.
Tom Randall (Gedling) (Con)
Damien Moore (Southport) (Con)
The Chief Secretary to the Treasury (Rishi Sunak)
As the Chancellor said, the Government are committed to levelling up across the country, and part of that involves our town deals to help to revitalise our high streets. Also, as the Prime Minister will say later, we have unveiled a £5 billion package to improve local connectivity, including bus and cycle lanes, to improve the quality of life and economic opportunity in local towns.
Afzal Khan (Manchester, Gorton) (Lab)
Wera Hobhouse (Bath) (LD)
As a former teacher, I know that a good education is a key driver to economic opportunities for young people, but sixth forms have been heavily damaged by years of under-investment. Will the Chancellor commit to implementing the recent recommendation from the Education Committee and Ofsted to raise the rate of funding per pupil to at least £4,760 in next month’s Budget?
Rishi Sunak
Post-16 education and skills are a priority for the Chancellor and the Government. I am pleased to say that the recent spending round delivers a £400 million increase in funding for post-16 education, which makes it the fastest rise in a decade and means that the per pupil base rate that the hon. Lady mentions will go up faster than the schools total.
Mel Stride (Central Devon) (Con)
My right hon. Friend the Chancellor will know that I have written to him about the legal duty that the OBR has to produce two economic forecasts in each financial year, which of course has been complicated by the cancellation of the last Budget. Can I ask him to set out for the House the approach that he intends to take and how he will avoid the necessity of having two forecasts very close together saying essentially the same thing?
Freeports
Rishi Sunak Excerpts(4 years, 9 months ago)
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The Chief Secretary to the Treasury (Rishi Sunak)
Today the Government have launched a consultation on freeports policy, allocation and governance.
A freeport is commonly defined as a place inside a country’s land border but where different customs rules apply. Countries around the world have successfully used freeports to drive investment and prosperity.
The creation of up to 10 freeports around the UK was a flagship policy in the Government manifesto. Since the election, HM Treasury has moved at pace with the Department for International Trade, the Department for Transport and the Ministry of Housing, Communities and Local Government to develop an ambitious set of policy proposals. Freeports will boost trade, jobs and investment with a view to building innovative business clusters that benefit the local area and level up the economy across the UK.
At the centre of our new freeports policy is an ambitious new customs model, drawing on international best practice. The model will improve upon both the UK’s existing customs facilitations and the freeports the UK previously had. We are also consulting on which tax incentives businesses in freeports could benefit from, potentially including business rates reliefs, capital allowances, research and development tax credits, and reductions in national insurance and stamp duty land tax.
Ports consistently flag that planning regulations restrict their expansion. Both the Government and local planning authorities can support freeports through planning options including permitted development rights and zonal planning, which would help to simplify planning processes, accelerate development in relation to freeports and support the wider regeneration of nearby areas.
Freeports also have the potential to be dynamic environments which enable innovators, start-ups, businesses and regulators to generate and test new ideas and technologies. Freeports could be used as sandboxes in which innovative technology and processes could be trialled.
Freeports will be a cornerstone of the Government plan to level up opportunity across the country, building on existing schemes such as the towns fund and the coastal communities fund, alongside other existing strategies across infrastructure, skills and dedicated trade and investment support. They will allow us to drive forward investment and regeneration in some of the most deprived areas in the UK, delivering highly-skilled jobs for people across the country.
Freeports will be selected through a fair, transparent and competitive process, and will be expected to collaborate closely with key partners across the public and private sectors.
The Ministry for Housing, Communities and Local Government is responsible for place-based strategy and regeneration in England and will lead on the domestic delivery of freeports, working alongside the Department for International Trade, which leads on attracting inward investment across the whole of the UK, and the Department for Transport, which leads on port strategy, policy, relationships and the wider transport network. HMRC will maintain control over the authorisation of customs sites within a freeport, to ensure sites are compliant with necessary security requirements. We will also work closely with the devolved Administrations to support the development of devolved policy proposals which allow the creation of freeports in Scotland, Wales and Northern Ireland.
We now need to understand how these proposals can most effectively support ports, businesses and communities in all parts of the UK. The “Freeports Consultation: Boosting Trade, Jobs and Investment Across the UK” [CP222] has been laid in Parliament. Copies are available in the Vote Office and Printed Paper Office, and also at: https://www.gov.uk/government/consultations/freeports-consultation
The Consultation will close on 20 April.
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Direct Payments Funding
Rishi Sunak Excerpts(4 years, 10 months ago)
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The Chief Secretary to the Treasury (Rishi Sunak)
The Treasury has confirmed £2,852 million of funding across financial years 2020/21 and 2021/22 to replace funding from the European Union and allow delivery of direct payments 2020 for farmers at the same level as the 2019 scheme.
The 2020 direct payment scheme across the EU is funded from the next multiannual financial framework, which means that in the UK, the 2020 scheme will be funded domestically by the UK Government. To provide certainty for farmers, the Department for the Environment, Food and Rural Affairs and the devolved Administrations, the Treasury has announced that the following funding will be allocated:
£1,751 million in 2020/21 and £92 million in 2021/22 for the Department for the Environment, Food and Rural Affairs;
£449 million in 2020/21 and £24 million in 2021/22 for the Scottish Government;
£231 million in 2020/21 and £12 million in 2021/22 for the Welsh Government; and
£279 million in 2020/21 and £15 million in 2021/22 for the Northern Ireland Administration.
This funding will be ring-fenced for direct payments and is based on an exchange rate of €1=£0.89092, the same rate as used for direct payments 2019.
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