Covid-19: DWP Update

Stephen Farry Excerpts

Monday 4th May 2020 Commons Chamber

[Dr Coffey]

My hon. Friend will know, having been an accountant, that a variety of people will potentially receive dividends from a company, and it is not currently possible for Her Majesty’s Revenue and Customs to know whether somebody has given this to themselves in lieu of a salary or whether it is a payment to an investor. It is a different situation where people have chosen to finance their income from the business in that way, and he will be aware that the rate of tax on paying dividends is 7.5%, once someone goes above the dividends allowance. How people who are self-employed through a normal PAYE scheme would pay aspects of national insurance and tax directly is quite different. The Treasury, in devising the scheme, has sought to try to identify as many people as possible it could help, and achieving that for 95% of self-employed people is a pretty good outcome.

[Stephen Farry (North Down) (Alliance) [V]]

There is growing support for a recovery universal basic income, and it is being considered in other parts of the world. I would dispute what the Secretary of State has said about the costings, and stress to her that it can be supported through wider changes to the taxation system. Given the current cliff edge on the job retention scheme, the danger of vast redundancies, pressures on UC and the need to inject spending into the recovery to kick-start recovery, will she at least urgently work with the Treasury to explore that option?

[Dr Coffey]

No, I will not, and I have already set out why I do not think a universal basic income is the right approach. The hon. Gentleman is a Northern Ireland Member and will be aware that responsibility for welfare is devolved, so if he wanted he could lobby the Northern Ireland Executive, and they might be able to devise a scheme that they think is more appropriate locally.