Oral Answers to Questions

Steve Barclay Excerpts

Tuesday 1st December 2020 Commons Chamber

[Ronnie Cowan (Inverclyde) (SNP)]

Whether he has had discussions with Cabinet colleagues on the potential merits of introducing a universal basic income to support economic recovery following the covid-19 outbreak.

[The Chief Secretary to the Treasury (Steve Barclay)]

We have supported those on the lowest incomes throughout this crisis by investing more than £7 billion in the welfare system, and we are focused on helping people to get into work by making up to £30 billion available through our plans for jobs.

[Ronnie Cowan [V]]

Councils throughout England, Wales, Northern Ireland and Scotland have asked for support to run basic-income pilots, designed to increase our knowledge of the pros and cons of basic income. Five hundred and twenty elected politicians from across the UK sent a letter to the Chancellor on this subject and got a frankly derisory response. Does the Chancellor honestly believe that he knows everything there is to know about a basic income and would not learn from such pilots? If he does not, will he back the basic-income pilots and let us learn together and make evidence-based policy?

[Steve Barclay]

I am happy to learn from the 2017 Work and Pensions Committee report that said it was

“difficult to see how”—

a universal basic income—

“would substantially alleviate poverty”,

or from the OECD, which said that a universal basic income could “increase poverty” and negatively affect the poorest. If the hon. Gentleman is putting forward this proposal, he should set out what the specific amount is. I note that to date the SNP has refused to do that.

--- Later in debate ---

[Stephen Flynn (Aberdeen South) (SNP)]

What recent discussions he has had with his Scottish counterpart on the effect of his Department’s fiscal policy on household income in Scotland.

[The Chief Secretary to the Treasury (Steve Barclay)]

This year, the Government have put in place an unprecedented package of support to protect incomes and jobs right across the UK. Analysis published earlier this year shows that our interventions significantly protected people’s incomes, with the least well-off in society supported the most.

[Owen Thompson]

How are those who have been excluded from support so far seeing their household incomes protected when they are getting no support from this Government at all? What plans does the Minister have to meet members of the ExcludedUK group to make sure that those who have had no support at all can actually survive Christmas?

[Steve Barclay]

As my right hon. Friend the Chancellor set out a moment ago, the Financial Secretary to the Treasury will be meeting that group, but we have also targeted the support, including on those who are majority self-employed. Through that targeting, we have been able to confirm an additional £2.4 billion of support for the Scottish Government.

[Stephen Flynn]

In his spending review statement last week, the Chancellor failed even to mention Brexit, but the Office for Budget Responsibility was not quite so shy; indeed, it painted a particularly bleak picture. So can the Minister clarify this: does he accept the OBR’s findings, and if so, does he therefore agree that the Scotland’s economic future will be detrimentally impacted by any Brexit on the watch of this Tory Government?

[Steve Barclay]

What economic analysis has always shown is that Scotland’s trade with the rest of the United Kingdom is much more important than its trade with Europe. However, Government Members have always been clear that we seek a deal. The asks that the negotiating team have put forward are extremely reasonable, and Lord Frost and the team continue to work to that effect.

--- Later in debate ---

[The Chief Secretary to the Treasury (Steve Barclay)]

The £20 per week increase to universal credit and working tax credit is benefiting claimants by a total of £6.1 billion this year and is just one part of the wide-ranging package of Government support during this crisis.

[Stephen Timms]

The Joseph Rowntree Foundation points out that raising social security benefits not only helps hard-pressed families, but boosts the economy because the increase is likely to be spent. Does the Chief Secretary recognise that raising legacy benefits in line with the £20 a week increase he has referred to that has already been introduced in universal credit would boost the economy while also addressing the current unfair discrepancy between them?

[Steve Barclay]

I recognise that the right hon. Gentleman has, as Chair of the Work and Pensions Committee, raised this issue on a number of occasions, and he will know that the uplift continues until the end of March; the benefit to which he refers continues until then. The Government are not ruling anything out for the future, but it is right that we wait for more clarity on the national economic picture before making any further decisions.

[David Johnston (Wantage) (Con)]

What steps he is taking to support people on low incomes during the covid-19 outbreak.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

Yesterday, Scotland’s First Minister announced her intention to award a £500 thank you payment to Scottish health and social care staff in recognition of all they have done throughout the pandemic. Powers over tax allowances, exemptions and national insurance are reserved to the UK Government, so will the Chancellor do the right thing and ensure that this festive gift of good will is not clawed back by Her Majesty’s Revenue and Customs?

[The Chief Secretary to the Treasury (Steve Barclay)]

As the hon. Lady should know, the income tax on these payments is actually paid to Scotland, not to Westminster. The Scottish Government have the power and the funding to gross up the payment if they wish. The UK Government have provided over £8.2 billion extra funding for the Scottish Government this year to support people, businesses and public services.

[Dr Neil Hudson (Penrith and The Border) (Con) [V]]

The Government’s financial support for people and businesses during the pandemic has been a lifeline, but many people have not been able to access support, such as some self-employed people, business owners, freelancers and company directors, including many in the tourism and hospitality sectors, which are so important in Cumbria and are now struggling to survive. Will the Government work to find a way to support these individuals, perhaps on a loss of income basis similar to the discretionary grants or hardship schemes that were devised for the dairy sector?

--- Later in debate ---

[Tommy Sheppard (Edinburgh East) (SNP) [V]]

Contrary to the impression given a few moments ago, it is only the United Kingdom Government who can exempt bonus payments to Scottish key workers from tax and national insurance under schedule 5 of the Scotland Act 1998. If they choose not to do so, the Treasury will get a windfall from these payments, with the consequent reduction in the Scottish block grant. So I ask again: will the Chancellor allow Scottish key workers to keep the full value of the bonus that they are being given by the Scottish Government?

[Steve Barclay]

First, the approach of the United Kingdom Government to these Scottish payments is exactly the same as applied recently in Wales. To further reinforce the point that I made a moment ago, while decisions on whether to exempt these payments are reserved, the Scottish Government will keep all the income tax receipts from these payments, so if they wish NHS and care workers to receive £500 net of tax, which is what they say is their wish, they can simply increase the value of the payments going to them. That is the point of substance. That is the point they do not want to engage on.

[Sir Edward Leigh (Gainsborough) (Con)]

Does anybody in this Conservative Government still believe in a low-tax, deregulated and small-state Britain? In which case, what are they going to do about it? As they prepare for the Budget, may I suggest one that reduces, not increases taxes on entrepreneurs and wealth creators, to kick-start the economy?

--- Later in debate ---

[Steve Barclay]

As my right hon. Friend the Chancellor set out earlier, and as the Office for Budget Responsibility set out last week, the total package of support comes to over £280 billion. In the spending review last week we also signalled further support as part of our covid response, with an additional £55 billion next year. Of course my right hon. Friend continues to keep under review the specific support to the charity sector, but as he set out in his earlier response, a comprehensive package of support has already been allocated. We will of course keep that under review.

[Julian Sturdy (York Outer) (Con)]

My right hon. Friend will know that pubs in tier 2 areas such as York will be hit particularly hard by the Government’s requirement to serve alcohol only with a meal. Given that pubs were already struggling prior to the pandemic, does he agree that now, more than ever, we need a fundamental reassessment of the way we tax beer and pubs?

[Steve Barclay]

As the Chancellor set out in the Budget, we are undertaking a comprehensive alcohol duty review, which will provide an opportunity to look at this issue in depth. My hon. Friend will also be aware that in six of the last seven Budgets the Government have cut or frozen beer duty, meaning that it is now at its lowest level for 30 years, but as part of our wider support package we will obviously keep that under review.