Draft Restriction of Public Sector Exit Payments Regulations 2020
Steve Barclay Excerpts(3 years, 7 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
I beg to move,
That the Committee has considered the draft Restriction of Public Sector Exit Payments Regulations 2020.
It is a pleasure to serve under your chairmanship, Sir Christopher. I know that you have a long-standing interest in the topic of the draft regulations, and I am pleased that you will oversee the debate.
Each year, hundreds of millions of pounds are spent on exit payments to public sector workers that exceed £100,000. The money funding these payments comes from taxpayers. The draft instrument will fulfil the Government’s 2015 manifesto commitment to end six-figure pay-offs by capping public sector exit payments at £95,000.
The concern over high exit payments is shared by many across the House. For example, the right hon. Member for Warley (John Spellar), an Opposition Member, said in the House as recently as 13 March 2020:
“The hon. Gentleman is rightly drawing attention to a significant problem. Is there not another aspect to it, which is that many of these individuals, quite frankly, should not be being given any payments, because they should actually be being sacked for failure to perform their jobs? They are taking sums of money and then transferring to other parts of the public sector, where they will have a repeated pattern of failure. Is there not a need for a real change in culture”.—[Official Report, 13 March 2020; Vol. 673, c. 622.]
I am sure that view, expressed by an Opposition Member, is shared by many other colleagues in the House.
Public sector workers play a vital role in the running of our economy. Earlier this year, we accepted the recommendations of the independent pay review bodies and announced a significant real-terms pay increase for around 900,000 public sector workers. However, we must ensure that all aspects of public sector pay and remuneration deliver value for money for the taxpayer. There are many recent examples of employees leaving their role and receiving six-figure packages funded by the taxpayer, and it is our view that these large exit payments do not deliver that aim, not least given the wider economic impact of coronavirus.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Although I do not think there is disagreement on the need to tackle excessive exit payments, why are the Government choosing to include harassment and discrimination payments in the scope of what they seek to do?
Steve Barclay
I will come on to the distinction between those on large payments, where I think there is a degree of consensus in the House, and how the waivers will address some of the concerns that the hon. Gentleman and other Opposition Members expressed in the previous debate on this issue. I will come on to that if he gives me a moment, and if he then wants to come back with an intervention, I will be very happy to accept it.
Exit payments are important to an employer’s ability to reform and to react to new circumstances. They are also an important source of support for individuals as they find new employment or as a bridge to retirement age. That is why the Government are taking forward these important regulations to cap public sector exit payments at £95,000. The level of the cap amounts to almost six times the maximum statutory redundancy payment. On an average salary of £24,897, the average person would have to work almost four years to earn £95,000, while someone working 35 hours a week on the national living wage would have to work around six years to earn £95,000—and that ignores the fact that the first £30,000 is paid tax-free. As such, it is clear that a £95,000 cap will still offer a significant level of compensation while ensuring value for money for the public finances. In fact, I think that the majority of our constituents would regard it as a generous amount.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Minister has talked about trying to address some concerns. What can he tell Members about how he will address the concerns expressed by the nuclear workers who were given specific guarantees about their pensions that have been repeatedly overridden?
Steve Barclay
I very much welcome that intervention, because that concern was raised by a number of Opposition Members when we debated this issue in the House previously. We have agreed a waiver that will apply to nuclear decommissioning as part of the draft regulations. I will come on to the wider point about how the waiver will apply, but the exemption that applies to nuclear decommissioning illustrates that we have taken on board some of the concerns that Opposition Members have raised.
I am grateful to all members of the public, employers, unions and others who submitted their views as part of the consultation process. The consultation in April 2019 received more than 600 responses, which helped inform the final regulations following the earlier consultation in 2015, which had more than 4,000 responses. I am also grateful to many of my right hon. and hon. Friends for their representations during the development of the policies.
The Government’s intention was made clear at the start, which was to apply the cap to all public sector workers. As the 2015 consultation stated, it would apply to
“all bodies classified within central and local government and non-financial public corporation sectors as determined by the Office for National Statistics for National Account purposes, with a small number of exceptions.”
The 2019 consultation stated:
“The government is proposing a staged process of implementation across the public sector. The first stage will capture most public sector employees, before extending the cap to the rest of the public sector in the second stage. Prioritising in this way will ensure most exit payments in the public sector are limited to £95,000 without further delay, while work continues on expanding the scope of the regulations.”
To ensure fairness and consistency and to give taxpayers confidence that their money is being spent properly, it is right that all public sector bodies are immediately in scope, with limited exceptions, such as the one I just referred to. The consultation in 2019 proposed capturing public sector bodies in two stages. Many of the responses objected to that proposal. We have therefore revised the proposal and reverted to applying the cap to all public sector bodies at once. The Government’s intention to cap exit payments has now been in the public domain for more than five years, providing public sector bodies and employees with sufficient time to communicate their views, including through the consultation process, and to prepare for the implementation of the cap.
Neil Coyle
The Minister raised the point about fairness, and he says this matter has been in the public domain since 2015. Why, then, has no equality impact assessment been undertaken? How many people are affected and when will the Government provide the EQIA?
Steve Barclay
It depends on different circumstances as to how many people will be affected. A key issue is that the proposals do not affect individuals’ accrued pension rights. A concern was raised in the previous debate about the impact on pension rights. Again, that is one of the issues we have listened to and taken on board. It is important to note that accrued pension rights are not affected by the regulations. In the vast majority of cases, the cap will have no effect on the exit package of an individual, because individuals retain any right to receive an unreduced pension, provided their overall exit payment falls below the cap of £95,000, which applies in most cases.
However, the Government believe it is right to include all payments related to exit within the scope of the cap. The option of an employer-funded early retirement, known as pension top-up payments, is often the most costly element of an exit payment. It is ultimately funded by the taxpayer, so it is right that it is included.
Neil Coyle
The Minister is being very generous in giving way. The measure states that all payments will be taken into scope. A very practical example is the case of the Birmingham women who received unequal pay for many years. The 174 women took the case to the Supreme Court and won. For some full-time care workers, the payments would have been more than £100,000 just to catch up on the unequal pay they had experienced for many decades of service in a difficult job. Why are the Government including that in these regulations?
Steve Barclay
I agree with the hon. Gentleman. I took that point away from the previous debate and was concerned to show the House that we had listened. In fact, it echoes the next line of my speech: I do accept that in some circumstances it will be appropriate for employees to receive an exit payment of more than £95,000.
Steve Barclay
I am always generous in taking interventions. I was trying to answer the hon. Gentleman’s legitimate challenge, but I will of course take the hon. Lady’s intervention.
Patricia Gibson
May I just ask the Minister, for the purpose of clarity, whether he is saying that he will exempt nuclear decommissioning workers? Magnox is on the list here, so unless the Minister has been very clear and I have not listened properly, I wonder whether he will clarify that point.
Steve Barclay
I am very happy to share with the hon. Lady the detail of that waiver as it relates to the pensions of Nuclear Decommissioning Authority workers. The waiver will apply in respect of the Nuclear Decommissioning Authority. That includes—
Steve Barclay
If the hon. Lady will allow me to answer the question, I was going to read out the exact legal prose. Sometimes we are accused of not being precise enough, so I was going to go straight to the legal text for her. It says:
“made to or on behalf of an employee…who is employed…by a company or other body holding a site licence granted under the Nuclear Installations Act 1965 for one or more nuclear-licenced sites…and on a site that is subject of a decommissioning programme agreed between the NDA and the BEIS Secretary of State, and…whose employment is terminated”—
details follow accordingly. So there is an exemption there.
I will come back to the point made by the hon. Member for Bermondsey and Old Southwark. In fact, the hon. Member for Newcastle upon Tyne North, who has not as yet spoken, said in the previous debate that she accepted the wider principle of exit payment caps, but had some concerns. We have sought to look at, and listen to, the concerns that Opposition Members have raised. I accept that there are some circumstances in which it is appropriate for employees to receive an exit payment over £95,000, including where imposing the cap would cause genuine hardship. We are committed to ending taxpayer-funded six-figure payouts for the best-paid public sector workers, but it is appropriate that the waiver system can be exercised with ministerial discretion if it is felt that implementing the cap would go against the original principles and result in hardship.
Steve Barclay
Let me just finish the point. The waiver may also be used to give effect to urgent workplace reforms. It applies where a payment is made as a result of the application of TUPE regulations, or where the payment is made to settle a grievance related to whistleblowing, discrimination, or health and safety-related dismissal. This mechanism is very important in allowing us to review how the cap is being applied and to ensure that we remain consistent with our original aims for the regulations. I hope that this system will address many of the questions that hon. Members have.
Does the hon. Gentleman want to come in one final time?
Neil Coyle
I just want a clarification on the waiver process. Do the Government intend to make it the case that a local authority has to seek permission from a Minister in the Department to honour a legally decided case of discrimination and make the payment that a court has ordered? Is that the process that local authorities and other public bodies will have to follow?
Steve Barclay
That is a very valid question. In a whistleblower case, for example, there is no requirement on the local authority to submit a business case for approval. There are mandatory causes for exemption. However, where a discretionary exemption is sought, such as on a restructuring, it is necessary to submit a business case.[Official Report, 2 November 2020, Vol. 683, c. 1MC.]
Steve Barclay
The hon. Gentleman shakes his head, but I simply remind him that as a Minister, I constantly get requests when bodies want to exceed the £150,000 payment. They are quite happy to submit business requests for that, so I do not see why it is onerous to say that the same applies to seeking consent when looking to restructure, and to exempt in that way.
In other parts of the United Kingdom, devolved Administrations have already acted to implement their own policy on severance payments. The Scottish Government have implemented a £95,000 cap on payments made by devolved bodies by updating the Scottish public finance manual. It is right that this Parliament does the same by approving these regulations. As we respond to the financial impacts of covid-19, the inappropriateness of large exit payments is reinforced. Ensuring that rewards are proportionate and taxpayer money is spent fairly must be prioritised. The regulations are carefully designed to end excessive exit payments, and will come into force 21 days after they are made. I commend them to the Committee.
Steve Barclay
I thank colleagues for their engagement in the debate. As I have already remarked, the Government are strongly of the view that the regulations are important in delivering value for money. It is right that the cap on public sector exit payments comes into force without further delay to stop the excessive payouts that are, unfortunately, all too common.
The hon. Member for North Ayrshire and Arran asked me to clarify the position on nuclear decommissioning, which has been a much-debated issue. Indeed, there was extensive debate during the passage of the primary legislation about the inclusion of nuclear decommissioning workers in the scope of the regulations. As we have set out many times—most recently by ensuring that the cap covers all of the public sector at once—the cap should apply to all public sector organisations with very limited exemptions. The defining feature of that is what is set by the Office for National Statistics.
We are able to exercise our own judgment, but for the most part, the scope has been guided by the ONS, which makes objective judgments, independent of Government and the regulations. The ONS classification is what means that the Nuclear Decommissioning Authority and its site-licensed companies are in the scope of the regulations, but we have a mechanism to waive certain pension-related payments upon redundancy, and that is what has been decided—I read that out for the benefit of the hon. Lady. In short, the Nuclear Decommissioning Authority has a waiver, but the organisation is classified by the ONS, which is why it is within the scope of the cap—that is the interaction between the two.
The hon. Member for Ilford North started by generously acknowledging that we have listened and addressed some issues of concern. There are some areas of misunderstanding: an equalities impact assessment was issued with the primary legislation. He then said that on the one hand, we do not need the regulations, but that on the other, he was against excessive payments. I would argue that the whole purpose of the regulations is to curb the excessive payments that he, I and a number of colleagues across the House agree are not value for money.
The hon. Member for Bermondsey and Old Southwark—
Steve Barclay
I will take his intervention before I address his question and then I can answer them both at the same time.
Neil Coyle
I appreciate that. If the Chief Secretary believes that the issues are resolved, why has the British Medical Association—the organisation that represents the health workers that he clapped on Thursdays—already sought a judicial review against the regulations because they extend the scope of the enabling statute? How does he square the circle when the regulations mean preventing some contractually agreed payments and tribunal award, and which the BMA says represents an unlawful extension of the primary legislation?
Steve Barclay
The reality, without wanting to stray into the issue of litigation, is that this is a cap on payments, so a body representing members may have concerns about that. The issue before the Committee is what constitutes value for money for the taxpayer. I remind the Committee of the fact that payments can be more than six times the national living wage and four times the average earnings. During the time of coronavirus, those are very substantial payments. You will be familiar with, Sir Christopher, some of the payments that were read out on the Floor of the House—those of NHS managers for example, who receive very large payments and then reappear elsewhere in the NHS very shortly.
Wes Streeting
Of course, it is easy to point to those examples. I wonder how the six-figure pay-off to Mark Sedwill could have been considered value for taxpayer money, and how much the wider cull of top civil servants under the Government is costing the taxpayer.
Steve Barclay
I was going to come to local authorities, but to address the issue of senior civil servants, that flowed from the decision to split the role of the Cabinet Secretary and the head of the civil service with that of Sir Mark’s other role as National Security Adviser, which meant that he was stepping down before the end of his tenure. It was therefore appropriate that Sir Mark was compensated in line with the civil service compensation scheme, and the sum is in line with the normal rules governing civil service pensions and compensation. Since 2015, in anticipation of the introduction of a cross-public sector cap on exit payments, any civil service exit costing more than £95,000 requires approval by Cabinet Office Ministers to ensure that it provides value for money to the taxpayer. As someone who worked with Sir Mark, particularly in my role as Secretary of State for Exiting the European Union, I place on the record what a fine public servant he was and how much I valued working with him during his time in office.
The hon. Member for Bermondsey and Old Southwark, who made a number of interventions—I hope that comment is not untoward—also raised a legitimate point about local authorities. As I say, it is something I looked at in particular. Local authorities’ ability to restructure should not be dependent on six-figure taxpayer-funded payouts. Councils will still be able to restructure and exit staff in any way they wish, provided the sum of any exit payment does not exceed £95,000. The Government accept that there might be instances where it is in the interests of urgent workplace reform to relax the restriction imposed by the regulations, so there is flexibility within the system.
Finally, the hon. Member for Ilford North raised the issue of index-linking. The point is that we want to retain the flexibility to revalue the cap both upwards but also downwards. If one looks at the economic consequences of coronavirus, ensuring that there is flexibility in the system is a prudent way to manage the public finances.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I have listened carefully to everything the Minister has said. I appreciate the arguments that he has put forward, but we should remember that, in the time of covid, many of the people who will be affected by the proposed changes are on relatively moderate salaries and have given years of their lives dedicated to public service, and will be giving everything to help get through this covid crisis. I want to put on the record that it is vital that the Government keep the measure index-linked so that it does not erode over time and vital that all the promises that the Minister has made today do not become meaningless within a few years.
Steve Barclay
I acknowledged earlier that in a previous speech the hon. Lady accepted the principle of capping excessive payments, but raised concerns to which I listened intently. I join with her in paying tribute to the work that so many have done across the public sector, but at the same time it is important to get value for money. For that reason, I commend the regulations to the Committee.
Question put.
Oral Answers to Questions
Steve Barclay Excerpts(3 years, 8 months ago)
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Mr Richard Holden (North West Durham) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
As of 16 August, 9.6 million jobs have been protected by the coronavirus job retention scheme, helping 1.2 million businesses with a total value of £35.4 billion.
Mr Holden
Thousands of jobs in my constituency of North West Durham have been protected by the Government over this period, but my constituents are aware that such levels of taxpayer support cannot go on indefinitely and also want to see new jobs being created. Will my right hon. Friend enlighten me as to how many jobs we are looking at getting through the kickstart scheme, which is now coming forward to help to get new jobs into the economy?
Steve Barclay
The £2 billion kickstart scheme has the potential to support more than 250,000 young people and, as my hon. Friend is well aware, it is part of a comprehensive package of £30 billion of support that my right hon. Friend set out as part of his plan for jobs in the summer economic update.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Despite countless warnings from these Benches, the Government are pulling away the job retention scheme just at the moment when infection rates are rising again right across our country. Businesses have said it, unions have said it, and even Tory Back Benchers are saying it: the one-size-fits-all withdrawal of wage support risks a jobs crisis this autumn. Will the Minister not listen and change course before it is too late?
Steve Barclay
The hon. Lady is simply wrong. What she ignores is the fact that my right hon. Friend has put in place a furlough bonus as support that goes beyond October to retain that link for employees to come back. That is part of a wider package of measures that goes alongside the furlough and stands comparison with the most generous in the world.
Bridget Phillipson
The Chief Secretary knows full well that the jobs retention bonus risks giving all the money to companies that simply do not need it. We would happily support the Government in developing a targeted, flexible wage support scheme for hard-hit sectors central to our country’s future. We have been saying this day in, day out for months now—the Government just have not been listening. Rather than stubbornly sticking to a decision made back in July, can he not accept that the situation has changed and that the Government must also change course?
Steve Barclay
There seems to be some confusion because, just last week in the debate that we had in this House, the shadow Chancellor actually recognised that the Chancellor had indeed listened with regard to the design of the furlough. In fact, they claimed credit for the role, which I salute, of the trade unions and others. So we have listened, but the reality is that the furlough pays a higher rate of people’s wages than the scheme in Spain. It supports a wider range of businesses than the one in New Zealand and the scheme runs for twice as long as that in Denmark. That shows the flexibility and the willingness to listen on the part of my right hon. Friend.
Nickie Aiken (Cities of London and Westminster) (Con)
Mr Mark Harper (Forest of Dean) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
The Government have put in place a £190 billion plan to protect people’s jobs, incomes and businesses, one of the largest and most comprehensive economic responses in the world, and that includes the £30 billion made available under the plan for jobs.
Nickie Aiken
The Eat Out to Help Out scheme has been a phenomenal success in my constituency of the Cities of London and Westminster. More than 890,000 meals have been discounted—several eaten by myself, I hasten to add. Will my right hon. Friend comment on the amazing package of help that the Government have given to the retail and hospitality sectors? Moving forward, what policies can we hope to expect to support these vital sectors, which are responsible for hundreds of thousands of jobs in my constituency?
Steve Barclay
My hon. Friend is right to recognise the effectiveness of that scheme in supporting demand. It was dismissed as a gimmick when my right hon. Friend the Chancellor launched it, but it has been warmly received by the hospitality industry. As she knows from her constituency and that of others, it is part of that wider package of support, including the cutting of the rate of VAT, which again has been a huge boost to that industry.
Mr Harper
I thank the Treasury team for the support that they have provided so far. My experience during the summer was that there was a great deal of support from local businesses for the variety of schemes, particularly those in the hospitality and tourism sectors, which are very important in my constituency. Turning to the future though, we must make sure that we provide the job opportunities that we are going to need. In Gloucestershire, we had a lift-off event last Friday, organised by my hon. Friend the Member for Gloucester (Richard Graham) and supported by all six Gloucestershire MPs, where we focused on skills and training and brought together a range of employers. That is the kind of thing that I would like my right hon. Friends in the Treasury to think about supporting. It is the future we need to focus on, not the past.
Steve Barclay
I pay tribute to my right hon. Friend for that event. I saw the read out and how positive it had been. He is right to focus on that forward piece, using the package of measures that my right hon. Friend set out. That includes, for example, the payment to employers for each new apprenticeship—up to £2,000 for those over 25—the £2 billion kickstart scheme, but also other schemes such as the tripling in the number of traineeships. Events such as the one he mentioned are ones that I am sure other Members will wish to follow.
Joy Morrissey (Beaconsfield) (Con)
Mrs Pauline Latham (Mid Derbyshire) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
Yes, Her Majesty’s Treasury is responsible for the allocation of ODA across all Government Departments. The comprehensive spending review will determine all ODA budgets.
Mrs Latham
I thank my right hon. Friend for that answer, but how can we ensure that all money spent qualifies for ODA categorisation and is particularly focused on relieving poverty?
Steve Barclay
I know my hon. Friend takes a close and expert interest in this issue, not least through her work on the relevant Select Committee. Individual Departments are responsible for ensuring that all money spent as ODA meets the criteria of the OECD Development Assistance Committee, and that it is spent through the powers of the International Development Act 2002, which requires funding likely to contribute to a reduction in poverty.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
The Government are committed to all groups in society, including the most vulnerable, facing the challenges caused by covid-19. That is why we have put in place an unprecedented package of support, including the job retention scheme, the self-employed income support scheme and a package of welfare measures that the Office for Budget Responsibility estimates to be worth in excess of £9 billion.
Stephen Crabb
The commitment of this Government to ensuring that the most vulnerable in our society are protected through this crisis cannot be questioned. The scale of the intervention has been remarkable, but may I encourage the Chancellor and the Treasury team, as they begin making their plans for next year’s spending, to bear in mind the importance of the increase in universal credit that we made at the beginning of the pandemic, and to ensure that we keep it in place, because many more families will be relying on it in the months ahead?
Steve Barclay
My right hon. Friend is a passionate champion of this issue. He will have seen from the answer given earlier by my right hon. Friend the Chancellor that the distribution analysis at the time of the summer update illustrated that the measures taken by the Chancellor had protected the poorest households the most as a proportion of income. I know that he will have listened closely to my right hon. Friend’s representations.
Afzal Khan (Manchester, Gorton) (Lab) [V]
Afzal Khan
Analysis undertaken by 10 Greater Manchester councils and combined authorities shows that the impact of coronavirus and the actions taken to manage the pandemic will be in the region of £732 million by the end of 2021. The Government have promised to level up the country, and it is time to make good on that promise, so will the Minister give Greater Manchester and its councils the resources they need to lead the recovery and build back better?
Steve Barclay
The hon. Gentleman is right to highlight the importance of levelling up across the United Kingdom. It is a key objective of this Government. That is why we are backing councils with the resources they need to meet the challenges caused by coronavirus. That includes more than £3.7 billion of grant funding so far, to address many of the pressures that they face.
Jessica Morden (Newport East) (Lab)
The Chief Secretary to the Treasury (Steve Barclay)
Spending on devolved matters is a matter for the Welsh Government. The UK Government do not set the levels of pay for care workers in England, but we are focused on ensuring that the social care system is funded, so that providers pay a fair wage.
Jessica Morden
Can the Minister tell my constituents who are care workers why, when they have worked their hearts out and been given a £500 thank you by the Welsh Labour Government, this Government see fit to deduct money from them, leaving those on universal credit with around £125? That is just mean-spirited.
Steve Barclay
The hon. Lady should point out to those same workers that this Government have allocated an unprecedented £4 billion of guaranteed funding to the Welsh Government to enable them to allocate funding under what is a devolved matter. If she is drawing attention to the fact that there is a shortfall in what she feels should be going to care workers in her constituency, she needs to address why more of that £4 billion is not being allocated to care workers in what is a devolved issue.
Lucy Powell (Manchester Central) (Lab/Co-op)
Craig Whittaker (Calder Valley) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
My hon. Friend is right to draw attention to the particular impact on that sector. It is something we are engaging on closely with it, and I am very happy to continue to have dialogue with my hon. Friend on the issue.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
Steve Barclay
I think my right hon. Friend addressed this in his reply to the shadow Chancellor. The key issue is to look at the package of measures the Government are putting in place. First and foremost among those is retaining people’s link to employment. That is the most important issue. Alongside that, the measures on welfare, including support for businesses that are in lockdown, are part of the comprehensive response, and statutory sick pay is one of a suite of measures.
Holly Mumby-Croft (Scunthorpe) (Con)
Steve Barclay
My hon. Friend is absolutely right. That is the underlying principle behind furlough—to enable the labour market to bounce back, with jobs in businesses that were viable before the pandemic being able to recover quickly. It is also part of the three-phase strategy that my right hon. Friend the Chancellor has set out. The second phase is to concentrate on skills to create jobs, protect jobs and support jobs, and to enable those workers to come back into the economy and for the economy therefore to recover quicker.
Daniel Zeichner (Cambridge) (Lab)
Protection of Jobs and Businesses
Steve Barclay Excerpts(3 years, 8 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the Government’s response to Covid-19 which has already protected the livelihoods of over 12 million people through the eight-month long Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme; acknowledges the support for hundreds of thousands of businesses up and down the country through unprecedented loan schemes, business grants and tax cuts; further welcomes the help to support, create, and protect jobs through measures such as the Eat Out to Help Out scheme, a temporary cut to VAT and stamp duty, increased incentives for apprenticeships, and the new Kickstart Scheme, as set out in the Government’s ‘Plan for Jobs’ policy paper published in July; and further acknowledges that any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.”
The House needs no reminding of the scale of the economic challenge facing our country. Recent GDP figures confirm that we have entered an acute recession on a speed and scale that we have never seen before. An economic crisis on this scale means that whatever the Government do, jobs will be lost, businesses will close and, as the Chancellor said last month, “hard times are here”. We should not underestimate the challenge ahead, but neither should we underestimate the Government’s resolve or that of the British people.
From the outset of this pandemic, the Government have acted decisively to protect people’s livelihoods, with one of the most generous and comprehensive packages of support anywhere in the world. We are doing everything we can to recover our economy, support businesses and give everyone the opportunity of good and secure work. Our economic response is moving through a careful, co-ordinated plan, in three phases: first, the immediate response, which started with the Budget in March; secondly, the specific plan for jobs announced in July, to protect, create and support jobs; and thirdly, rebuilding, on which we will say more in the autumn Budget and the comprehensive spending review. Let me take this opportunity to thank the many people—including Members from all parties—businesses and other organisations that have brought forward ideas and suggestions to help us to shape that plan.
Jim Shannon
I put on the record my thanks for all that the Government have done through the schemes that have helped many of my constituents. One thing needed to make this situation work is the co-operation and help of the banks. Will the Minister consider extending freezes on cards and loans for businesses, especially those in the retail and hospitality sectors? Discussions with the banks and credit card providers are critical to help companies to get over the line. We should extend that period to help them to recover.
Steve Barclay
As the hon. Gentleman will know, my hon. Friend the Economic Secretary to the Treasury has regular discussions with the financial institutions; he will have heard the concerns set out by the hon. Gentleman and will be happy to take them forward in terms of how the banks respond. In some of the other measures the Government have taken—for example, on mortgage holidays—we have seen a recognition of and response to the concerns we have heard about from our constituents.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Haribo in Pontefract has announced that it is consulting on over 200 redundancies and proposing to move some of its production back to Germany. This is devastating for the hard-working workforce. Will the Chief Secretary urge Haribo to work with the GMB trade union and Wakefield Council to look at alternative plans to prevent huge job losses in the middle of a recession, and will the Government stand ready to help them to do so? Does the Chief Secretary accept that manufacturing industry needs support if we are to prevent deeply damaging mass redundancies?
Steve Barclay
I absolutely share the concern set out by the right hon. Lady. From conversations that we have had in previous roles, I know how much she advocates for her constituency, and I support that business engaging with her, the council, trade unions and others. I will come on to a number of measures that the Government have taken, and some further measures that we will take, regarding our wider support package to the business community.
This should be set in the context of the three-phase approach. In the first phase of this crisis, the Government introduced measures to halt the spread of the disease. That included protecting our public services with more than £49 billion of funding for the NHS, schools, local authorities and other front-line services. The Chancellor said that he would do whatever is needed to support our NHS, and that is what he delivered. Our plan supported people, with the furlough scheme supporting nearly 10 million jobs—jobs that might otherwise have been lost.
The self-employed scheme provided 2.6 million people with £7.6 billion of support, and mortgage and credit payment holidays helped 1.9 million people to manage their finances—the hon. Member for Strangford (Jim Shannon) referred to that earlier. For those who are out of work, we made welfare support more supportive and easier to access, and we introduced a hardship fund to help up to 3 million of the most vulnerable people. Of course our plan backed business, because we know that only by supporting businesses can we create sustainable jobs.
Steve Barclay
Sustainability is an issue dear to the priorities of the hon. Lady, so of course I will give way.
Caroline Lucas
I am grateful to the right hon. Gentleman for giving way, and I pay credit to the Government because they have supported a number of different groups very well. There is, however, one group who they have not supported: the self-employed, who are falling between the gaps. He will have heard about the very real hardship that they are facing right now. They, and the Excluded UK all-party group, which is chaired by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), have been asking for a meeting with the Treasury team, but they have not heard back. Will the right hon. Gentleman agree to meet them and hear directly about the scale of the difficulties they are facing?
Steve Barclay
I am very familiar with this issue. We covered it in my appearance before the Treasury Committee some months ago, and the Chancellor has repeatedly addressed it. As the hon. Lady will know, the shadow Chancellor referred to part of those concerns, and just yesterday there was discussion in the media about concerns regarding fraud in other Government schemes. Part of the challenge and the constraints on this issue is concern about the level of fraud. We have already set out the Government’s position on the issue. I do not think there is further to add in that respect, because those concerns have been well articulated.
Several hon. Members rose—
Steve Barclay
I will make some progress.
In addition to our support for businesses, we have provided nearly £40 billion of support through the tax system, with tax cuts, tax deferrals and the time to pay scheme. We have provided direct cash grants of £10,000 and £25,000 for small businesses and an extensive range of loan programmes, including dedicated investments for innovative tech firms through our Future Fund, and 100% Government guaranteed loans for the smallest businesses through the bounce back loan scheme. The shadow Chancellor said that she wanted the Government to listen, and bounce back loans are a good illustration of how the Government listened to concerns and changed the coronavirus business interruption loan scheme to include that additional measure. That scheme has benefited 1.1 million businesses. The House does not need to take just my word for it, because the chief economist at the CBI described the Chancellor as
“standing shoulder to shoulder with small businesses to help them through this crisis.”
Joanna Cherry (Edinburgh South West) (SNP)
The right hon. Gentleman mentioned the CBIL scheme, but many medium-sized and larger businesses in my constituency have struggled to get the loans they require. Lloyds Banking Group in particular has been poor at making positive lending decisions. What are the right hon. Gentleman and his Government doing about that?
Steve Barclay
I can give a clear and direct answer to that because, together with UK Finance, my hon. Friend the Economic Secretary to the Treasury has discussed bounce back loans, CBILS and larger business interruption loans. Those were targeted at up to £200 million for that mid-tier category of businesses, and I know from discussions with colleagues that a lot of regional businesses in that mid-tier category have been particularly impacted. The point is that this is about the package of Government schemes. Where there are individual constituency cases, we are, of course, always happy to look at them and UK Finance does a very good job in terms of its response.
I have set out the first phase. The second phase of the extraordinary support given relates to our plan for jobs. As part of protecting jobs, we have temporarily applied a reduced rate to VAT for tourism and hospitality, supporting over 150,000 businesses and protecting 2.4 million jobs. I do not know whether you, Mr Speaker, had an opportunity to benefit, but you will be familiar with the popular eat out to help out scheme, which has been a real success. The latest figures—only the one course, clearly, Mr Speaker—show that 100 million covers have been claimed, helping to support 130,000 businesses and protect almost 2 million jobs in a sector which, very seriously, has been particularly acutely hit by the covid pandemic.
Our plans also create new jobs, injecting new certainty and confidence in the housing market by increasing the stamp duty threshold to £500,000 for first-time buyers. That will drive growth and support across housebuilding and property sectors. It also builds on other schemes, such as creating green jobs through a £2 billion green homes grant, saving households hundreds of pounds a year on their energy bills, and through our £1 billion programme to make public buildings, including schools and hospitals, decarbonised. Together, they are all a part of the £640 billion capital investment in economic recovery, job creation and revitalising our national infrastructure over the next five years.
Kevin Hollinrake
Earlier, my right hon. Friend pointed to the success of bounce back loans. There is no doubt that they have been a huge success, but some businesses who have taken out those loans will hit trouble in terms of making repayments. Will he support a programme of best practice across the banking sector to ensure that those businesses have every chance of getting through this, perhaps with different payment plans?
Steve Barclay
My hon. Friend raises an important point. From other parliamentary campaigns he has been closely involved in, I know how much he values best practice in the financial services sector. As a former financial services Minister, I share that objective, which is why I am so grateful for the work he has been doing to ensure that best practice is followed to address the specific issue he brings before the House. Of course, the best thing to enable businesses to pay loans back is to get the economy as a whole motoring. That is why we are redoubling our efforts to get on with that now and why the Prime Minister announced that £5 billion of capital investment will be brought forward as part of giving a boost to businesses, so they can indeed meet the requirements of those loans as they arise.
Our plan supports jobs, creates jobs and protects jobs. That supporting of jobs is really the third component. It includes the announcement of the £2 billion kickstart scheme set out by the Chancellor, which will subsidise hundreds of thousands of high-quality jobs for unemployed young people, allowing young people to gain experience that will improve their chances of going on to find long-term and sustainable work. We are also investing a total of £1.6 billion in scaling up employment support schemes, training and apprenticeships to help those of our constituents who are looking for a job.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Chief Secretary will be aware that companies such as British Airways have used the furlough scheme to facilitate mass redundancy programmes for their staff. In fact, BA has also implemented the firing and rehiring of its remaining 30,000 staff, often on massively reduced wages. Does he think that that is fair?
Steve Barclay
That is exquisite timing, because I was just about to turn to the point that the hon. Gentleman raises about that use of furlough and the question that the shadow Chancellor raised about whether the scheme should be extended. I want to address head-on the concerns I have heard about that decision.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Will the right hon. Gentleman give way?
Jamie Stone
The Chief Secretary is very gracious for giving way. This is possibly not the intervention he expects. When we get through all this, and when we have time and peace and quiet, may I urge him and the Chancellor to carry out some sort of audit of how the furlough scheme worked? There have been newspaper stories of inappropriate furloughing of employees, and for any Government of any colour, we need to get to the bottom of that when we have time to do so.
Steve Barclay
Having been Brexit Secretary over the previous year and Chief Secretary during this economic challenge, I can say that we will come through this, as the Chancellor has set out, and we will come to a time when we can look at the scheme in the way that the hon. Gentleman refers to.
The scheme has protected up to 10 million jobs. The shadow Chancellor raised the duration of the scheme, and I understand those concerns. It has been one of the most difficult decisions that the Government have taken, but it is the right one. I remind the House of the extent of the support that we have offered. First, the furlough is already over eight months. It is one of the most generous schemes in the world, and we have been contributing at a higher rate of people’s wages than in Spain. We are supporting a wider range of businesses than in New Zealand, and our scheme will run for twice as long as in Denmark.
I remind the House that our support for furloughed employees does not end in October, as has been suggested in some interventions. In the Chancellor’s summer statement, he announced the new job retention bonus, which will pay employers £1,000 for every employee still in post by the end of January. For an average employee, that is a subsidy worth 20% of their salary—nearly double the amount of subsidy that a cut in employer’s national insurance would have provided, which I know some people were calling for prior to the Chancellor’s announcement of the bonus. I further remind the House that most people on furlough are employed by very small businesses where £1,000 is a significant and welcome boost.
While we will continue to support furloughed employees through the job retention bonus, it is right that the main scheme comes to an end. We need to focus now on providing people with new opportunities, rather than offering false hope that they will always be able to return to the same job they had before. It is in no one’s long-term interests for the scheme to continue, least of all those trapped in a job that only exists because of the furlough scheme.
To those calling for a new targeted or sector-based furlough, I simply pose three questions that I have still not heard answered satisfactorily today. First, which sectors would we not provide support for? Secondly, what would we do about the supply chains of those sectors on furlough, which can reach across the whole economy? Thirdly, most observers have accepted that the furlough cannot last forever, so how long would we extend it for? Without being able to answer those questions, any proposal for a sector-specific furlough cannot be seen as a serious one—
Steve Barclay
But perhaps we have an answer to the three questions coming—I will happily take the intervention.
Matt Western
The Chief Secretary is being generous in giving way; I thank him for that. He will be disappointed to hear that I do not have the answer. However, I want to ask him a simple question. Germany has a much more advantageous scheme, which lasts until 2022. It has been described by industry bodies in the automotive sector and elsewhere as giving them a competitive advantage. Does he agree with that?
Steve Barclay
The German scheme sits within a very different landscape. It is not actually administered by the Government. It is a long-standing scheme; it has not been set up as a response to covid specifically. I just gave some illustrations of where the UK’s furlough measures stand internationally. This needs to be seen as part of the wider package of support that the Government have set out. Again, the UK package as a whole stands comprehensively as one of the best international schemes on offer.
Darren Jones (Bristol North West) (Lab)
Will the right hon. Gentleman give way?
Steve Barclay
I will not, because I am conscious that a lot of Members want to speak in the debate.
It is important to note that providing such a comprehensive and decisive economic response has, in common with every advanced economy in the world, dramatically increased public borrowing and debt. In the short run, that has been the right strategy, so that we can protect jobs and incomes, support businesses and drive the recovery. Indeed, the OBR has said that if we had not provided the financial support, the situation would have been far worse. But over the medium term, it is clearly not sustainable to continue borrowing at these levels. Yes, clearly, interest rates right now are at historic lows, which means our cost of borrowing is cheap, but with the Government debt exceeding the size of the UK economy for the first time in more than 50 years, even small changes in interest rates would have a very big impact on our public finances.
Thankfully, we were in a strong fiscal position coming into this crisis, which allowed us to act quickly to support jobs and businesses, but having seen two supposedly once-in-a-generation economic events in just 10 years, we are reminded once again that we cannot know what is around the corner. We will need to return to a position of strong and sustainable public finances.
Let me make one further point this afternoon. While we have made great strides in tackling coronavirus, it may continue to be necessary to take targeted local action to keep the virus under control. We know the impact these local measures have on people and businesses. Since 1 September, we have been trialling support for individuals in Blackburn with Darwen, Pendle and Oldham. Eligible individuals who test positive with the virus will receive £130 for their 10-day period of self-isolation, with higher payments of up to £182 for members of the household or other contacts who need to self-isolate.
Today, I can announce further new measures to support businesses. The Government will provide direct cash grants to businesses that have been ordered to close.
Closed businesses with a rateable value of £51,000 or less will receive a cash grant of £1,000 for each three-week period they are closed. For closed businesses with a rateable value higher than £51,000, the grants will be £1,500. The grants will cover each additional three-week period, so if a small business is closed for six weeks, it will receive £2,000. This new support will give closed businesses a lifeline through the difficult but temporary experience of lockdown—an important next step in our economic plan to protect jobs and businesses against coronavirus. I am grateful for everything my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has done to develop this scheme, and he will bring forward further details shortly.
Let me close with one final observation. In the first phase of our economic response to coronavirus, we supported people, businesses and public services, with support totalling £190 billion. In the second phase, our plan for jobs is protecting, supporting and creating jobs, and as we enter the third phase our economic policy will be driven not just by responding to the immediate crisis, but by ensuring that we level up, spread opportunity, tackle climate change and make sure our response to the pandemic is not just about recovery but renewal. I commend the amendment to the House.
Public Service Pensions: Survivor Benefits
Steve Barclay Excerpts(3 years, 10 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
The Government are committed to providing public service pensions that are fair for public sector workers and for taxpayers. The Government’s position remains that benefit entitlements should normally be determined based on the rules applicable at the time the member served, to maintain fairness for active scheme members and the taxpayer.
Following the Walker v Innospec Supreme Court ruling, the Government decided that in public service schemes, surviving male same-sex and female same-sex spouses and civil partners of public service pension scheme members will, in certain cases, receive benefits equivalent to those received by widows of opposite sex marriages. The exception to this is in specific schemes where, in the past, improvements in female members’ survivor benefits have involved female members making employee contributions or increasing them.
A case brought in the Employment Tribunal against the Secretary of State for Education (Gavin Williamson) earlier this year highlighted that these changes may lead to direct sexual orientation discrimination within the Teachers’ Pension Scheme, where male survivors of female scheme members remain entitled to a lower survivor benefit than a comparable same-sex survivor.
The Government have concluded that changes are required to the Teachers’ Pension Scheme to address the discrimination. The Government believe that this difference in treatment will also need to be remedied in those other public service pension schemes, where the husband or male civil partner of a female scheme member is in similar circumstances.
Departments responsible for the Administration of affected schemes will consult on and take forward changes as soon as possible. Schemes will notify their members of changes and any actions they need to take.
[HCWS397]
Public Service Pensions Consultation
Steve Barclay Excerpts(3 years, 10 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
Today I have laid in Parliament the consultation document “Public service pension schemes: changes to the transitional arrangements to the 2015 schemes” (CP No. 253) detailing proposals regarding public service pensions. In December 2018, the Court of Appeal identified that transitional protection arrangements provided to older judges and firefighters in 2015 gave rise to unlawful discrimination. The consultation sets out options to deliver the Government’s commitments, made in July 2019 (HCWS1725) and March 2020 (HCWS187), to address the discrimination across the public service pension schemes and for all affected members. It also sets out the Government’s intention to move all affected public servants to the 2015 reformed pension schemes from 1 April 2022. The consultation will run from 16 July to 11 October 2020. Furthermore, the Government are today announcing that the pause of the cost control mechanism, which was implemented in 2019 (HCWS1286), will be lifted. The Government will also proceed with the previously announced review by the Government Actuary as to whether the mechanism is working in line with original objectives.
Proposals for addressing discrimination
The consultation published today sets out proposals to address the unlawful discrimination arising from the transitional arrangements introduced when public service schemes were reformed in 2015. There are two possible mechanisms for achieving this: an immediate choice exercise or a deferred choice underpin. Both will enable all affected members, whether they originally received transitional protection or not, to decide whether to take the legacy or reformed scheme benefits for the period 1 April 2015 to 31 March 2022. These options differ in the point at which the member makes the decision: the immediate choice exercise would be held in the years after the point of legal implementation in 2022; whereas under the deferred choice underpin, the decision would be deferred until the point at which a member takes their pension benefits. Until that deferred choice is made, all members would be treated as having been in their legacy scheme between 1 April 2015 and 31 March 2022. Where members are already in receipt of their pension, they would get the choice as soon as practicable after the policy is implemented.
These proposals apply to all members who were in a relevant public service pension scheme on or before 31 March 2012 and remained in a relevant pension scheme on or after 1 April 2015.
The public service schemes affected by this announcement are the main public service pension schemes managed by the UK Government, Welsh Government and Scottish Government. Changes to the local government pension scheme in England and Wales, and the equivalent scheme in Scotland, as well as the UK-wide judicial pension scheme and the public service pension schemes in Northern Ireland will be consulted on separately.
Future pension provision
From 1 April 2022, all members who are not already in the reformed schemes and who are still accruing benefits in legacy schemes will be placed into the 2015 reformed pension schemes. The reformed schemes are important in ensuring that the cost of public service pensions is affordable and sustainable, while providing vital public servants with a generous, inflation-protected income in retirement. The reformed schemes are also fairer to those who do not see their earnings increase greatly during their careers such as many lower and middle earners.
Cost control mechanism update
The 2015 reforms also introduced a mechanism to control the cost of public service pensions.
This assesses the value of schemes to members and is designed to ensure members receive fair entitlement while ensuring costs remain sustainable. It has both a ceiling and a floor—when costs increase above the ceiling or fall below the floor, member benefits are adjusted to meet the target cost.
Following the Court of Appeal’s judgment, the Government announced a pause to the “cost control” element of the 2016 scheme valuations, as the judgment led to significant uncertainty about benefit entitlements, meaning that at the time there was not enough certainty to assess the value of benefits to members.
Progress has now been made in the employment tribunals to determine a remedy for claimants, and the Government are now setting out their proposals for consultation. As the uncertainties about the current level of benefits have receded, I can therefore announce that the pause to the cost control mechanism will now be lifted, and the Government have started the process to complete the cost control element of the 2016 valuations.
When the mechanism was established, it was agreed that it would consider “member costs”: i.e. costs that affect the value of schemes to members. As the proposals in the consultation published today will increase the value of schemes to members, this falls into the “member cost” category.
As a “member cost”, this will be considered as part of the completion of the cost control element of the 2016 valuations process. Current employer contribution rates will not be affected. The Government have published an “Update on the cost control element of the 2016 valuations” today, providing additional details.
In September 2018, the Government announced their intention to ask the Government Actuary to review the cost control mechanism to assess whether it is working in line with original objectives. The review has been on hold, but I can today announce that it will proceed and report ahead of the completion of the 2020 valuations.
The Government remain committed to public service pensions which are fair to public servants and fair to other taxpayers.
Copies of the consultation document (CP No. 253) are available in the Vote Office and Printed Paper Office, and it is published on gov.uk.
[HCWS380]
Annual European Union Finances Statement
Steve Barclay Excerpts(3 years, 10 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
I am today laying before Parliament the “European Union Finances 2019: statement on the 2019 EU Budget and measures to counter fraud and financial mismanagement” (CP 256). This is a routine annual publication and is the 39th in the series.
The statement gives details of revenue and expenditure in the 2019 European Union (EU) budget, recent developments in EU financial management and measures to counter fraud against the EU budget. It also includes a chapter and annex on the use of EU funds in the UK over the period.
The document also provides an updated HM Treasury estimate of the value of the financial settlement, which was made legally binding by the passage of the European Union (Withdrawal Agreement) Act 2020. Exit from the EU on 31 January 2020 resulted in some UK and EU payments that would originally have been paid post-withdrawal being paid while the UK remained a member state. HM Treasury estimate that the current value of the financial settlement is £30.2 billion. This remains within the Government’s reasonable central range of £35-39 billion, adjusted to take into account the UK’s 31 January 2020 exit date. In annex E, HM Treasury provides an updated summary of the financial settlement, other costs set out in the withdrawal agreement and short-term public expenditure costs.
[HCWS366]
The Economy
Steve Barclay Excerpts(3 years, 10 months ago)
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The Chief Secretary to the Treasury (Steve Barclay)
I beg to move,
That this House has considered the economy.
It is a privilege to open this economic debate, and to do so hot on the heels of a statement from the Chancellor that places the Government’s plan for jobs at the heart of our recovery. The past few months have tested our economy in a way that few of us, if any, have experienced before. Never in our history have a Government ordered businesses across the country to close for an extended period, and never have a Government asked so many people to halt normal activity so completely. Shops closed, offices emptied and productions lines juddered to a halt as millions worked from home.
From the onset of this pandemic, the Government worked to ensure that our frontline public services would get whatever funds they needed. To date, £49 billion has gone towards the NHS, local authorities and others working to protect us from the virus, but our public servants were not alone in that endeavour. The very fact that so many of working age were willing to stay at home, protect the NHS and save lives is a sign of the cohesion and compassion that still exists within our society.
Chris Bryant (Rhondda) (Lab)
If the Minister does not mind me being a bit cheeky, I want to ask about the money that we need in the Rhondda to deal with the floods earlier this year. Some £67 million is needed by my local authority. Half of a tip fell into the river, and £2.5 million is needed to take away the 60,000 tonnes and to make the tip safe for the future. It is vital that the Government recognise that the Coal Authority is a Westminster responsibility, and the money must be found so that we can make people’s homes safe.
Steve Barclay
When it comes to speaking up for his constituents, I do not think the hon. Gentleman has ever held back, whether or not he is being cheeky in doing so. He raises a very important point about the investment in flood prevention. That is why the Chancellor set out a number of measures as part of the infrastructure package, and I will come on to say more—[Interruption]—if he allows me to get into my speech, about how we are accelerating a number of projects with that in mind. Given the history of coal and some of the tragedies that have happened in the past in Wales, we are very cognisant of the need to take action on such schemes. Again, that is being looked at by the Secretary of State for Wales, and I have been in discussions with him on that.
Let me now make some early progress. The Government were clear that we would stand by those whose livelihoods were in jeopardy through no fault of the own. We said we would do whatever it takes to protect and preserve the businesses and jobs on which our national prosperity and resilience ultimately depend, and we meant it. The House will be familiar with the scale and scope of our economic response, which has included business rates reliefs and grants for the worst-hit sectors, uplifts in welfare support for families struggling to make ends meet and more than £70 billion of business loans and guarantees approved to date. Meanwhile, the coronavirus job retention scheme and the self-employment income support scheme have preserved many millions of jobs and livelihoods across England, Scotland, Wales and Northern Ireland, demonstrating once again the shared strength and resilience we derive from our Union.
Steve Barclay
I know the hon. Gentleman is a passionate defender of the Union, and I give way on that point.
Jim Shannon
We are very much better together. The Minister and I know that, and everyone else in the House knows that as well, even my friends to my left.
One of the things that concerns me is the aerospace sector, and the manufacturing base in particular. We have the possibility of losing 600 jobs at Bombardier in Northern Ireland and some 45 jobs at Magellan, which is a smaller contractor in my constituency. Within this process—and I thank the Government for all the moneys they have made available—will there be extra help for the aerospace sector, particularly for small firms and for the apprentices in those small firms?
Steve Barclay
As the hon. Gentleman knows, the Chancellor addressed that issue in his statement earlier. Indeed, he wrote to the industry in March setting out the terms on which Government support would be offered, including the requirement for firms first to look at what support they could receive from their own commercial backers and shareholders. On individual firms, what discussions take place is a matter of commercial confidentiality, but the Chancellor indicated both his engagement in that issue and that of the Secretary of State for Transport.
All in all, the United Kingdom’s economic response to covid is one of the most comprehensive and generous of any Government’s in the world. The past few months have been hard for everyone, particularly the many families whose loved ones have lost their lives. But thanks to our collective grit and determination, the tide was turned and the infection rates fell, and we are now in a position to reopen our economy in a way that is safe to do.
John Redwood (Wokingham) (Con)
As one who thinks it is exactly right, as a one-off cost, to spend and cut taxes at the moment to promote economic recovery, I accept that we have to borrow to do that. When will we be getting some revised numbers on what the borrowing might amount to?
Steve Barclay
There are two issues within that. First, there are the revised numbers from the Office for Budget Responsibility, which has set a timescale for when it will set those out. Then there is the more substantive issue, as the Chancellor set out in his statement, of seeing the plan for jobs in the context of three phases. The medium-term recovery that we need will be set out in the autumn with the Budget and the comprehensive spending review. Again, that will be an important milestone in this three-phase approach.
Steve Barclay
I will make a little progress, and then I will happily give way to the hon. Lady.
These interventions have come at a considerable cost to the public finances, but I have no doubt that they were the right thing to do. The Bank of England, the OBR and other external forecasters have all highlighted that the cost to the economy would have been significantly higher were it not for the swift and decisive action that the Government have taken. Nevertheless, the pandemic has caused a profound shock to both the national and the global economy, the consequences of which will be felt by businesses and individuals for some time to come. Even as we step out of lockdown, a great deal of disruption and uncertainty remains. Many businesses have yet to reopen their doors. Up and down the country, people are worried about whether their jobs will be secure when they return to work.
Wera Hobhouse
Bath is an international spa city, and the wellbeing and beauty industry is very much part of our local economy. Some industries have been worse hit than others and unfairly treated, particularly the beauty industry. When will there be an announcement that the beauty and wellbeing industry is open for business again?
Steve Barclay
The hon. Lady highlights an extremely important sector, not least in terms of its profile. Many women work in that sector, and often those incomes are extremely important to their households as well. At Treasury oral questions yesterday the Chancellor expressed our desire to get those sectors up and running as quickly as possible. The hon. Lady will know that we have already taken significant steps to support them, not least through the £10,000 and £25,000 grants that were offered, which included many within the sectors that she highlights.
Today the Government made it clear that we are ready to take further action as necessary, just as we have done throughout this crisis. That is why the self-employed income support scheme will open for a second and final round of grants between 17 August and 19 October. Likewise, the job-retention scheme has been extended until the end of October, with new, more flexible terms to support people back to work. But with the best will in the world, no Government can reasonably save every single job in these circumstances; nor can the furlough scheme, successful as it has been, last indefinitely.
Lilian Greenwood (Nottingham South) (Lab)
Of course the Minister is right that the furlough scheme cannot continue forever. However—I listened to his response to the hon. Member for Bath (Wera Hobhouse) about the beauty sector—surely we need different approaches to the sectors that have been able to reopen and those that are currently still closed. Surely the sectors that are still unable to open, and potentially may not be able to open for quite some time, such as theatres, music venues and beauty therapists—a range of sectors—need something more flexible. Why has he not considered something more flexible with regard to the job-retention scheme?
Steve Barclay
We have been flexible. The hon. Lady mentioned theatres: we announced a package of £1.57 billion-worth of support as part of the flexibility of which she speaks. People also seem to ignore the fact that we are only halfway through the furlough scheme. It runs until October—we are four months in. The intention, as part of this second phase, is to reopen the economy, including these businesses. As the Chancellor set out, we do not think it is good for people to be away from the labour market for an extended period because skills atrophy, and that is not in their interests.
Steve Barclay
I will make a little progress and then of course come back to the hon. Lady.
Now is the time to move to the next step in our economic response. Later this autumn, the Government will deliver a Budget and spending review, but today we set out our plan for jobs. As the Chancellor said, this is not a time for ideology. We are driven by a belief in the nobility of work and the power of opportunity. Most of all, we are motivated by the desire to do what is right for the British people. Where jobs are at risk, we will work to protect them, and where jobs are needed, we will help to create them.
Steve Barclay
Given the hon. Lady’s persistence, I will, but then I will make some progress.
Emma Hardy
On the issue of protecting jobs, the Minister must be aware of the situation facing the caravan industry in Hull and the East Riding. We are asking—this is supported cross-party, by Conservative Members as well—for specific support to protect the caravan manufacturing industry in our area. All the industry is asking for is an additional four months of support to keep it going until spring. We know that more staycations will mean a boom in caravan sales. Will he please look at specific support for this vital industry?
Steve Barclay
Again, we have taken measures with specific support, as my right hon. Friend the Chancellor set out. That is why we are cutting VAT for campsites and the tourism sector from 20% to 5%. That is part of it, but as the Chancellor also said, if we extended as the hon. Lady suggests, others would say, “Another month, another month, another month”, and people would be away from the labour market for a long period, which would not be in their interests.
Karin Smyth (Bristol South) (Lab)
Bailey of Bristol in my constituency is a world-class manufacturer, and I totally echo the point made by my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) that these businesses are not talking about forever. They are clearly talking about getting through to the spring. That is not that long, and it is a big investment. Please will the right hon. Gentleman reconsider?
Steve Barclay
Again, this was covered extensively in the earlier debate. First, the furlough is already in place for an extremely long period, until October. That is eight months, and we are only halfway through it. Secondly, other measures are being put in place, including measures to incentivise employers to bring those on furlough back. It is not right that people should stay on furlough for an extended period of time—[Interruption.] Nor have the Opposition set out exactly which sectors they want it extended for, or how that would apply in areas such as the supply chain. We would simply get an indefinite period in which that scheme would be —[Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) has made her point. Yelling at the Minister is probably not quite the way to proceed.
Steve Barclay
Thank you, Madam Deputy Speaker.
We will also ensure that those who have sadly lost their jobs are supported back into work as quickly as possible. We will do that by expanding work search and doubling the number of work coaches, so that jobseekers will benefit from high-quality personalised one-to-one support. We will also invest £32 million of new funding over two years to expand the National Careers Service, and we will prioritise support for young people who have not only had to contend with disruption to their education but must now enter the workforce at an extremely difficult moment. The £2 billion kick-start scheme will create hundreds of thousands of new fully subsidised quality jobs for young people aged 16 to 24 who are claiming universal credit and are at the highest risk of long-term unemployment.
There will be new money to invest in schools in England, including tripling the number of sector-based work academy placements and traineeships, and giving all 18 and 19-year-olds the opportunity to study targeted high-value level 2 or 3 courses when no employment opportunities are forthcoming. Furthermore, we will introduce a new youth offer for young people on universal credit, in the form of 13 weeks of intensive support, including referral to work-related training or apprenticeships together with tailored support and coaching for those who need it.
The Government’s immediate focus is on jobs, but our recovery is also an opportunity to renew our commitment to the UK’s long-term prosperity. Six months ago the Government were returned to office by an electorate tired and frustrated by deadlock and delay. Thousands of people in dozens of constituencies lent the Conservative party their vote for the first time because we promised to leave the European Union, unleash the potential of the economy and level up investment and opportunity across the United Kingdom. Those commitments have not changed, and this Government are determined to repay the trust placed in us by bringing about meaningful change to people’s lives.
Last week, the Prime Minister outlined how the United Kingdom could bounce back from this crisis, stronger and better than before, with new jobs and new industries in every region. Together with the plans set out by my right hon. Friend the Chancellor today, this means we will bring forward £8.6 billion of capital investment in infrastructure projects that will support thousands of jobs. That includes more than £1.5 billion for hospital upgrades and maintenance this year, and as the Prime Minister announced last week, we will allocate £1 billion to begin rebuilding schools in England, £142 million to modernise courtrooms and £83 million to invest in the prison estate. Meanwhile, we are working to put in place a new generation of roads, railways and fibre-optic cables to bind the country closer together and unleash the economic potential of the regions.
Tim Farron (Westmorland and Lonsdale) (LD)
It is important that the right hon. Gentleman’s focus is on jobs. Will he reflect on the fact that the hospitality and tourism industry—the fourth biggest employer in the country and the biggest employer in Cumbria—is now effectively in the middle of three winters in a row? The VAT cut is very welcome. However, 69% of hospitality businesses are not able to open fully, so, with goods and services that they cannot trade, they will get no benefit whatsoever from a tax cut. Does he agree that it is therefore right to invest in a wages and grant package to see the industry through to spring next year, so that it can come out fighting once the demand returns?
Steve Barclay
It is to address that exact reason that the Chancellor did not simply announce a VAT cut to help that sector. It is also why the eat out to help out programme is particularly targeted. Demand is key to those businesses being able to restart and take back people who are furloughed. It is predominantly and disproportionately the young who are most affected within that sector, and that is why the measures are targeted to help those who would have been most scarred economically if they lost their jobs at the start of their career.
The commitment to levelling up across the regions, including in Cumbria—in a way I am sure the hon. Gentleman, who is a proponent of localism, would support—is not just about the big-ticket projects such as High Speed 2 and Northern Powerhouse Rail, important though those are. It is every bit as much about numerous smaller-scale projects: the trunk roads, the local bus services, the flood defences—projects that rarely make national headlines but are every bit as transformative at a local level. That is why the Government have announced more than £100 million for local road upgrades. It means that we can proceed with much-needed bridge repairs in Sandwell, we can set about upgrading the A15 in the Humber region, and we can provide £10 million to support tackling bottlenecks in the Manchester rail network to bring about a faster, more reliable journey for thousands of passengers.
Our commitment to levelling up is directly linked to another of the Government’s totemic ambitions—that of achieving net zero carbon emissions by 2050.
Steve Barclay
I can anticipate the intervention and I will make a little progress first. Over the past 30 years, the United Kingdom has reduced its carbon emissions by more than 40%, but now the time has come to accelerate our efforts—and I am sure the hon. Lady agrees at least on that point.
Caroline Lucas
Yes, I would love him to accelerate his efforts, but the truth is that the £3 billion earmarked for green recovery is dwarfed by ongoing Government funding for fossil fuels, whether it is the £27 billion road-building scheme or blank cheque bail-outs for aviation, so does he agree that we should have not one penny more spent on propping up the fossil fuel economy, not just for climate reasons, but because investment in the green economy has a much higher return on investment and is much more labour-intensive?
Steve Barclay
I fear that that is almost the same question that the hon. Lady put to the Chancellor earlier. I know that she and I will disagree on the commitment we have to the road-building programme, because on the Government side of the House, we see that as key to driving productivity and helping jobs, and it is an issue on which many of my colleagues campaigned at the election and their electorates sought to see improvements. However, we have a commitment to the green agenda. That is what the Chancellor set out in his statement, and that is the record that we are building on through measures that include the £1 billion decarbonisation of public sector buildings, which I am sure is a scheme that she would welcome.
Our quest for net zero has the potential to build on proven regional economic strengths and create many more high-skilled, high-quality jobs. It will spur innovation and exports and, most importantly, it can deliver clean and resilient long-term growth. As part of the £8.6 billion of capital investment, the Government will invest £3 billion to decarbonise the United Kingdom and, in doing so, protect or create thousands of green jobs.
Steve Barclay
The hon. Lady has already had one go, but she can have one more and then I will come to my conclusion.
Wera Hobhouse
The Minister is extremely generous, and I am very grateful. On the issue of cross-party support, I know that hydrogen is very much in the Government’s heart as a way for the economy to recover and to get to net zero. Why is there no hydrogen strategy, and why has not there been an announcement today about anything to do with the hydrogen industry?
Steve Barclay
One of the advantages of coming after the Chancellor has spoken for two and a half hours is that many of the same issues come up a second time. He was asked about this, and he said that we have a commitment and he was not going to pre-empt any future announcement from the Prime Minister. Given that that was the Chancellor’s response, I can say that I am certainly not going to pre-empt anything from the Prime Minister, but we recognise the issue. That is an area on which, as the Chancellor covered earlier, the Prime Minister will make any subsequent announcements.
We have announced today £2 billion of green homes grants, which will save energy and, just as importantly, save households money on their bills. Finally, our £40 million green jobs challenge fund will invest in shovel-ready natural capital projects, such as creating new parks and open spaces, cleaning rivers, restoring peatland and helping to plant many more trees during this Parliament. Taken together, these measures will help to ensure that the future is not only more prosperous but happier, healthier and greener too.
Covid-19 has tested our economy to the extreme. The challenges we face in rebuilding are great, but the opportunities are greater still. We can build back better than before, with stronger public services, a new generation of infrastructure that brings our country together and new jobs and opportunities in every region. It will not be easy—it will take all our ingenuity and commitment—but as the Chancellor said earlier today, it is not this crisis that will define us, but our response. The resilience, compassion and determination shown by the British people has carried us through the hardest months, and now, this same sense of collective purpose will drive our recovery too.
Madam Deputy Speaker (Dame Rosie Winterton)
It will not have escaped anyone’s notice that many Members wish to contribute to the debate, so there will be an immediate four-minute time limit on Back-Bench speeches. I call the shadow Minister, Wes Streeting.
Oral Answers to Questions
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Scott Benton (Blackpool South) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
Upgrading local transport links is a key part of this Government’s commitment to levelling up across the country. That is why we announced at the Budget £500 million for the potholes fund; £4.2 billion has been announced for discussion with the eight devolved Mayors; and there is a further £2 billion across this Parliament for boosting cycling and walking.
Scott Benton
Reinstating a passing loop on to the south Fylde rail line will help to double the number of trains travelling into Blackpool South every single day, bringing additional tourists into Blackpool and helping to create new jobs, investments and opportunities. Does my right hon. Friend agree that delivering these local transport infrastructure projects is vital for furthering economic growth, assisting our recovery from covid-19 and delivering much-needed investment into Blackpool, a part of the world that I know he is very familiar with?
Steve Barclay
It is a key part of this Government’s commitment to improve transport links such as that. I know that my hon. Friend has submitted a proposal, which the Department for Transport is considering. Having been able to hear the trains on that line from my kitchen growing up, it is one that I take a particular interest in, and I know that it is a very strong scheme.
Grahame Morris (Easington) (Lab)
The Chief Secretary to the Treasury (Steve Barclay)
House building is an important catalyst for the wider economy and we have put in place an unprecedented package of support in this sector. Last week, the Prime Minister announced measures to stimulate house building, including a £450 million boost to the short-term house building fund.
Grahame Morris
I thank the Minister for his answer. Horden, Easington and Blackhall in my constituency need investment in housing regeneration. The recovery plan is ready. However, we need investment to help us transform our communities with new, modern, clean and green housing. Will the Chancellor invest in housing regeneration in east Durham, because these schemes can deliver jobs, training, opportunities, green energy and sustainable domestic supply chains, and boost the local economy?
Steve Barclay
This is an area where I agree with the hon. Gentleman. That is why, in addition to the fund I mentioned a moment ago, the Prime Minister also confirmed £12.2 billion of funding for affordable homes, and there is the £400 million brownfield land fund to get schemes working immediately with Mayors for exactly the reason he sets out.
Wes Streeting (Ilford North) (Lab)
The Conservative manifesto promised £9 billion for energy efficiency schemes, but the Committee on Climate Change described even that as
“welcome but not enough to match the size of the challenge”.
Given that the Chancellor is about to announce a £2 billion scheme, why are the Government scaling back their ambition when they should be scaling up to bring down people’s bills, tackle climate change and create the jobs we need to get Britain back to work?
Steve Barclay
If the hon. Gentleman had listened to the answer I gave a moment ago, he would have seen that we are learning from the lessons of the 2008 crash. One of the measures that was put in place then saw a fall of a third in the number of small house builders, so part of the £450 million fund is providing the finance to enable small house builders to build the schemes that Members on both sides of the House agree on. It is about learning the lessons of the schemes that Labour put in place in 2008, which led to a fall in construction work.
Sarah Champion (Rotherham) (Lab)
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
The UK Government’s response to covid-19 has been UK-wide. More than 750,000 people in Scotland have benefited from the job retention scheme and the self-employed income support scheme, and Scotland has received £3.8 billion of Barnett consequentials.
Andrew Bowie
I thank my right hon. Friend for that answer. It shows the benefits of being in the most successful political and economic Union in the history of the world. What support are the Government thinking about giving to the oil and gas sector, which is struggling from the dual blows of record low oil and gas prices and the covid-19 pandemic?
Steve Barclay
My hon. Friend is right to identify the benefit of pooling through the UK approach, and the specific issues relating to the oil and gas industry. That is why industry leaders met the Department for Business, Energy and Industrial Strategy on 11 June. Work is ongoing, particularly in relation to what support can be provided to the sector. We are very mindful of its significance to the economy of Scotland.
Gareth Bacon (Orpington) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
Last week, the Government announced a comprehensive package to support councils in responding to the pressures caused by covid-19. We have now provided more than £3.7 billion of additional grant funding for councils, and announced a major new scheme to reimburse them for their lost income.
Gareth Bacon
Fears have been expressed that the Government will fully bail out financially poorly managed local authorities, while better managed local authorities, such as the London Borough of Bromley, may have to meet covid-19 shortfalls through their reserves. Will my right hon. Friend offer reassurances on that point? If covid-19 funding shortfalls remain, will he consider allowing a capitalisation directive to enable councils to fund one-off shortfalls through capital receipts or borrowing?
Steve Barclay
We have always taken the approach that borrowing is allowed for infrastructure and capital projects, but not day-to-day revenue. That policy will continue. At the same time, all councils have received support, and £16 million has been allocated to Bromley. It is right that the support addresses councils’ varied needs, and that is very much the approach that we have taken.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Of course, one of the areas that local government has gone into more in order to fund its services is commercial investment. The package last week does not cover the shortfall in that, which is hitting some local authorities very hard. A number of them are looking at section 114 notices. Is the Minister prepared to see councils go bankrupt on his watch, or is there a package of support for those councils?
Steve Barclay
The Chair of the Public Accounts Committee will know very well that commercial income carries risk for councils investing in it. We are cognisant of that fact. I advise councils, where there is the risk of a section 114, to talk to the Secretary of State for Housing, Communities and Local Government ahead of any such decision.
Dan Carden (Liverpool, Walton) (Lab) [V]
The Prime Minister promised to do whatever it takes, and the Housing Minister told councils:
“spend whatever it takes, the Government will reimburse you”.
Will the Minister reaffirm that pledge? Councils need certainty. Many are already cutting services, and the one-size-fits-all approach simply does not work. Will he further commit to the principle that packages announced by the Government should meet the financial cost of coronavirus, and the social need for those local authorities?
Steve Barclay
The hon. Gentleman will know that the cost for local councils will be uncertain for some time, not least in terms of the impact of lost tax income. That is why we have addressed the short-term pressure through the £3.7 billion grant and additional funding that has been allocated, including the recent £600 million for infection control.
Clive Lewis (Norwich South) (Lab)
Sarah Owen (Luton North) (Lab)
The Chief Secretary to the Treasury (Steve Barclay)
Treasury Ministers meet the Secretary of State for Transport and the Home Secretary on a regular basis to discuss a variety of important issues, including the aviation industry.
Sarah Owen [V]
I have asked Ministers multiple times why it is that we have not yet seen a specific package of support for the aviation industry, and I have received general answers about general measures that are clearly not working, with easyJet already consulting on 4,500 job losses. Thousands of jobs in Luton and its council are reliant on income from Luton airport. If the Governments of France and Germany are protecting their aviation workers, why are this Government not doing the same?
Steve Barclay
We continue to work closely with the sector and are willing to consider the situation of individual firms, providing that all other Government schemes have been explored and all commercial options exhausted, including raising capital from existing investors.
Jo Gideon (Stoke-on-Trent Central) (Con)
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
I regularly meet the Secretary of State for Education to discuss school funding. We are providing a £1 billion package to help students catch up on lost learning, and that sits alongside the £100 million to boost remote education and the additional £7.1 billion of core funding for schools that we announced at the 2019 spending round.
Jonathan Gullis
I know that my right hon. Friend enjoyed his time in Stoke-on-Trent during winter last year, but he will also know that, sadly, the area of Stoke-on-Trent, Kidsgrove and Talke is ranked in the bottom 20% of the social mobility index. Sadly, we are also well below the national averages in both young and old taking up courses at levels 3 and 4. Will he set out the steps that the Department is taking to support further education? Does he agree that post-16 providers, such as Stoke-on-Trent Sixth Form College, play a vital role in levelling up opportunity and upskilling and retraining both young and old, enabling them to be better off than those before them?
Steve Barclay
As a former teacher, my hon. Friend speaks with great authority on such issues. I absolutely agree that a strong post-16 education system is vital to our recovery. That is why we have applied a range of flexibilities to the usual funding arrangements, and the Department for Education has set out further details.
Jane Stevenson (Wolverhampton North East) (Con)
Lee Anderson (Ashfield) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
As the Prime Minister said last week, we are doubling down on levelling up, and he committed last week to £95 million for shovel-ready projects in the east midlands, in addition to the £10.25 million of accelerated funding from the towns fund for Kirkby-in-Ashfield. I look forward to working with my hon. Friend in his commitment to levelling up his constituency.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Oral Answers to Questions
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Stuart Anderson (Wolverhampton South West) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
I regularly discuss school funding with the Secretary of State for Education. At the spending round, the Government committed to a £7.1 billion cash increase in the funding for schools in England by 2022-23.
Stuart Anderson
I understand that there are immediate pressing issues for the Department, but after this will my right hon. Friend arrange to meet me and the Education Secretary to discuss the funding of a secondary school in Wolverhampton?
Steve Barclay
I would be very happy to give that commitment to my hon. Friend. He will be aware of the significant allocation to capital funding that was set out by my right hon. Friend the Chancellor in the Budget, and obviously part of the discussion at the comprehensive spending round will be the allocation of that budget.
Christian Matheson (City of Chester) (Lab)
When the Minister is meeting the Secretary of State for Education, will he also talk about funding for the early years and nurseries sector? The 30 hours of free childcare is not working, and many of these nurseries were facing unviability before the current crisis.
Steve Barclay
The hon. Gentleman raises an important point, because across the House people recognise the importance of early years and early intervention, but he will be aware of the wider package of funding showing the Government’s commitment to education, not just in primary schools and secondary schools but through the measures on further education set out by my right hon. Friend the Chancellor in the Budget.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Chief Secretary to the Treasury (Steve Barclay)
We have been clear that the NHS will get whatever it needs to respond to the coronavirus. The Chancellor announced at Budget a £5 billion response fund and we have already allocated a significant proportion of that to a range of measures.
Stephen Crabb
What frontline staff do in the NHS every single day is remarkable at the best of times, and what we are asking them to do now and in the weeks ahead will be incredibly challenging in terms of both the physical and emotional pressures and the personal risks to NHS staff, so would my right hon. Friend reaffirm that as well as providing the extra money announced in the Budget, the Government will do all they can to ensure that frontline NHS staff get all the equipment they need, including protective clothing, to get the country through this crisis?
Steve Barclay
My right hon. Friend is absolutely right. The Chancellor has made it clear that we will do whatever it takes to protect our NHS frontline, not just through PPE, as he correctly identifies, but by looking at additional capacity, such as in the independent hospitals sector, and at the support available, including the £1.3 billion allocated to speed up the discharge of patients, the £1.6 billion allocated to local authorities for adult social care and, of course, funding such as the £30 million for diagnostics research and £10 million for diagnostic testing that has also been allocated in recent days.
Anneliese Dodds (Oxford East) (Lab/Co-op)
As a House, we require more specific detail about exactly what funding and arrangements are being provided across Government in relation to testing and PPE availability. We are all hearing from staff that they do not have the resources they need. The Minister talked about that funding, but to what extent is it being spent in the field, and what discussions has his Department had with the Department for Business, Energy and Industrial Strategy and the Department of Health and Social Care about pulling in additional manufacturers not just for ventilators but for PPE and testing?
Steve Barclay
The hon. Lady will know from the statements made by my right hon. Friend the Secretary of State for Health and Social Care that significant efforts have been made on this, working with domestic manufacturers and procuring additional resource and stock internationally. On funding, we have been very clear with the Department of Health and Social Care that it will have whatever funding it needs, and that has been the case to date.
Owen Thompson (Midlothian) (SNP)
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?
The Chief Secretary to the Treasury (Steve Barclay)
The right hon. Gentleman will know that school budgets have been allocated, so the schools already have that money to spend; that will not change. The announcement that the Chancellor has made about the PAYE system is about supporting people through that mechanism. If the right hon. Gentleman has other proposals, I am happy to engage with him to discuss them further.
Nicola Richards (West Bromwich East) (Con)
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.
Steve Barclay
The hon. Gentleman raises an important point about the pressure on the Department for Work and Pensions at this time. That is a key reason why the design of the schemes that we have been looking at and that have been put forward by the Chancellor do not add complexity and pressure on the DWP. We have been actively working on identifying where we can free up and reprioritise resource in DWP to assist with this issue. I have been discussing the matter with the Secretary of State for Work and Pensions, and working closely with her on it.
Henry Smith (Crawley) (Con)
Obviously, airports and airlines are particularly adversely affected by the covid-19 situation.
Stuart Anderson (Wolverhampton South West) (Con)
I want to follow on from my right hon. and gallant Friend the Member for Bournemouth East (Mr Ellwood) and talk about our great armed forces. I expressed my delight at the budget of £10 million identified for veterans’ mental health. Will the Chancellor confirm that that will remain a priority, as the problem does not go away?
Steve Barclay
I am happy to give that assurance. I know my hon. Friend is a champion—rightly so—of our armed forces and speaks with great experience and authority on that. He will be aware of a number of measures that my right hon. Friend the Chancellor has announced. That is one of them, and we stand by it.
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?
Self-employed Persons: Financial Support
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Sir Edward Davey (Kingston and Surbiton) (LD)
(Urgent Question): To ask the Chancellor to make a statement on financial support for the self-employed in the light of the covid-19 pandemic.
The Chief Secretary to the Treasury (Steve Barclay)
We know that many self-employed people are in real distress, but we are working urgently to address this problem, and I say to the self-employed: we have not forgotten you—help is coming. But the policy and delivery are complex, and we cannot and should not rush to announce a scheme that gives rise to more questions than it answers. The Chancellor has held meetings this morning with representatives of the self-employed and will continue to meet them this afternoon.
It is important to remember that covid-19 is an urgent challenge to our entire economy, affecting workers of all types. It is essential that we respond swiftly, so that people can keep their jobs and businesses can carry on. That is the basis of our coherent, co-ordinated and comprehensive plan. It is a plan that gives those on the frontline the tools they need to tackle the virus, with all the support the NHS needs, backed up by an initial £5 billion fund for public services. It is a plan that puts a shoulder behind business with a statutory sick pay relief package for small and medium-sized enterprises, business rates holidays for all retail hospitality, leisure and nursery businesses in England, and grant funding for small enterprises, as well as support through Her Majesty’s Revenue and Customs’ time to pay scheme. As of yesterday, businesses with cash-flow concerns are also able to access the coronavirus business interruption loan scheme, offering up to £5 million for SMEs through the British Business Bank. For larger firms—[Interruption.]
Mr Speaker
Order. It might be easier if Members pass notes down the line, rather than going round and speaking to everybody.
Steve Barclay
The coronavirus business interruption loan scheme, on which Members across the House have raised questions, is now available, offering up to £5 million for SMEs through the British Business Bank. For larger firms, the Bank of England is providing a new facility to help support liquidity.
I urge all Members of the House to continue speaking—as I know many are doing—to the business leaders in their constituencies and ensure they are aware that they are not alone and that help is coming. In this House, we are all standing behind business and everyone who works in it. To encourage businesses to retain staff, we are deferring VAT, and my right hon. Friend the Chancellor has announced the job retention scheme to facilitate that.
Taken together, this is a huge programme of support, and we will keep thousands of workers in jobs, but we know that there are thousands of self-employed people who have been wondering what the future holds for them. My right hon. Friend the Chancellor has already set out a range of measures in support. Sole traders and freelancers will be able to access the business interruption loan scheme as long as activity is channelled through a business account. We are also removing the minimum income floor for the self-employed workers affected by coronavirus so that they too can access universal credit in full. That is not only the standard allowance, but a wider package of support for those with children, disabilities or, indeed, housing needs. At the same time, the next self-assessment income tax payments will be deferred until January 2021, helping those who have set money aside for those payments with immediate cash flow. That means there is a package on tax, on loans and, more widely, through universal credit, to support those with that safety net.
Let me reassure everyone in this House and the self-employed people they represent that further help is indeed coming, but we have to make sure we get this right and that we target the right support to those who are most in need. The Chancellor will provide a further update on support for the self-employed in the coming days.
Sir Edward Davey
I thank the Chief Secretary to the Treasury for that answer. He knows that parties on all sides of the House have been supportive of the way in which the Chancellor and the Treasury have given support to businesses and to employees. But I have to tell him that the 5 million self-employed people across the country, who are in all our constituencies, are in real stress and are deeply worried. While we all understand that there are complications, the Government have to move as fast as possible to meet their concerns, because they are literally, in many cases, simply running out of money.
I want to say to those on the Treasury Bench that it is important we remember who the self-employed are: 80% of the 5 million self-employed are sole traders. They are our neighbours, our friends, our family. The vast majority are not wealthy people. They are cleaners, taxi drivers, plumbers, hairdressers; they are musicians, tutors, journalists; and they are builders, electricians and child minders. These people are literally running out of money now, and we have to support them.
Of course there will be stories about wealthy people who are self-employed, but they are the minority. If we look at the figures from HMRC’s own data, 36% of sole traders—the majority of the self-employed—have taxable incomes of less than £10,000 a year. That compares with just 15% of employees on incomes that low. We are talking about people on low incomes: 60% have profits of less than £10,000 a year. These people were struggling before the coronavirus pandemic, and they are now facing ruin.
I think that an urgent package of help is needed now, and it needs to be at least the equivalent of that offered to employees. While we all know the problems that the Treasury is facing, may I say to the Chief Secretary that if the package is capped as it was for employees, if it is temporary as it was for employees and, especially for the self-employed, if there is some sort of clawback mechanism if people are given money that they did not need, surely we can come together as a House and as a country to make sure these people get the support they need? It is not uncommon for the self-employed, when they do their annual self-assessment tax return, to have to pay money back to the Treasury. Surely, if money is given now so they can deal with cash flow—capped, in a temporary scheme—then that money can be clawed back the next time they do their self-assessment, if it turns out that they did not need it.
I honestly urge those on the Treasury Bench to move fast, and not to allow the perfect to be the enemy of the good. People need the money now: please act now.
Steve Barclay
The right hon. Gentleman is right to emphasise the importance of timing and speed in this regard. He spoke about how that can be targeted and the fact that there are many very deserving causes within the population, but it is probably useful to draw the House’s attention to the fact that one in 10 of those who are self-employed are over state pension age. Over two in 10, according to the 2017-18 figures, were earning less than £2,000, which suggests that it was not their main source of income. Between one and a half and two out of 10 are already on universal credit. Some remainders will be quite well paid, such as law partners and so on, and some will be in employment and returning self-employment tax forms for part of their income in addition to their employment. The point is that the population itself is complex and we need to ensure that the measures are targeted correctly.
The right hon. Gentleman raised the mechanism. One of the themes that has informed the Treasury’s approach is this: what is operationally deliverable? That is one of the things we are working through. For example, HMRC does not hold people’s bank accounts, which is why the support the package for those in employment was through the PAYE—pay-as-you-earn—system. As my right hon. Friend the Chancellor set out at Treasury questions, tax data is one and a half years old. Those are the issues we are working through. The right hon. Gentleman is absolutely right that urgency is important—that is why the Chancellor is engaged on this—but we are seeking to target a complex population.
Sir Graham Brady (Altrincham and Sale West) (Con)
Recognising the complexity of solving this problem, can my right hon. Friend give some indication of how quickly we can expect to have at least an interim solution in place for those who are desperate for help and desperate for clarity at this point?
Steve Barclay
For some within this population—not all—there will be some solution already through the £5 million loan that is available as of yesterday. That will not cover the entirety of this population, but, in accordance with the business needs of some who are self-employed, there is support. For some of the population—again, by no means all—there will be some relief through some of the measures the Chancellor set out on property and business rate relief, but part of the complexity of the target population is that different measures work for different groups. That is part of what my right hon. Friend the Chancellor is working through, but I recognise the point my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) and others have raised. We do recognise the importance of timing on this issue.
John McDonnell (Hayes and Harlington) (Lab)
Can I say to the right hon. Gentleman and other Members that no one is looking for a row over this? We are looking for a solution. The reason some Members became irritated earlier was the emphasis, in one of the Chancellor’s responses, on the rich self-employed. They are not the people who are contacting us. The ones who are contacting me at the moment are the plumbers and the hairdressers. Yes, some freelance artists and others are in desperate straits, but I do not think there is a Member who has not received representations. We are just looking for something we can go back with today to give them some assurance. We know how complicated it is, but we have to find a solution quickly. I urge the Government to at least set a deadline, so we can go back to our members and say, “By the end of this week, there will be a proposal brought forward.”
The other assurance that people want was raised by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). If we can go back and say, “You will get the equivalent of the 80% or whatever that was offered to other workers,” it would lift people’s spirits that something was on the way.
Many self-employed workers, just like other workers, are having to sign themselves off sick. They do not have access to statutory sick pay—still. I have to say that asking people to survive on £94.25 a week is just an impossible ask. When the Secretary of State for Health was asked on television last week whether he could live on it, he said no. I agree with him. We need the level of sick pay raised for everybody if we are expecting them to choose not to work, and not have to choose between health and hardship.
Finally, in Treasury questions my right hon. Friend the Member for North Durham (Mr Jones) raised a point about different categories of workers. I know that it is complicated, but we do have to consider agency workers. I have had many emails and telephone calls from people working in the construction sector who do not know whether they should be at work today, or whether they would be safe if they were. Let us use this opportunity to look at the exploitation by payroll companies and umbrella companies of people who in many instances are forcibly designated as self-employed.
We do not want a row over this; we want to work with the Government. In fact, Anneliese and I are happy to come and work a shift in the Treasury, if that is what Ministers want. [Interruption.] We might come up with slightly different solutions. We need this quickly and we need it to be effective as soon as possible.
Steve Barclay
May I first welcome the constructive tone that the right hon. Gentleman has struck? His offer to come to the Treasury might contravene some of the recent social distancing requirements, but I appreciate the spirit in which it was made. He is right that we need to move at pace and to work together. That is why my right hon. Friend the Chancellor was involved in further meetings this morning, as he will be later today, as we work through how to take this forward.
The Chancellor was drawing attention to the complexity of the target population. I think that a number of Members would have concerns, not least as we look to the future, if we were subsidising some very wealthy self-employed people. I take the point that they are not the ones getting in touch with the right hon. Gentleman, but it is important that our approach is mindful of the target population.
The right hon. Gentleman raised the issue of reassurance, which is a legitimate concern, and one shared across the House. I draw the attention of his constituents, and those of colleagues across the House, to the Chancellor’s comments this morning. We are working at pace on this and we recognise the issue being raised. I hope that provides reassurance, certainly in terms of an announcement, although the operation of any solution may take further time, as the Chancellor set out.
Considerable work is being done, but the population is complex. We are looking at the burdens of different delivery mechanisms, whether on the Department for Work and Pensions or local authorities, which have their own staffing pressures because of the number who are ill. That is why we are exercising flexibility in lots of other areas in order to reprioritise resources, but it is important that the scheme is deliverable and mindful of the other challenges we are dealing with.
Sir Edward Leigh (Gainsborough) (Con)
May I make a point from a public accounts point of view by urging the Chief Secretary to the Treasury to consider a system that is humane, rapid and, above all, simple? The Treasury and the Department for Work and Pensions have traditionally been obsessed with complexity, targeting and clawback, but what we need is a simple system. About 40 years ago I suggested having a universal basic income to Mrs Thatcher, and I got an earful for my pains. But we need something like that, which could be rolled out very simply and claimed by taxi drivers, cleaners and those sorts of people, because rich people would not bother with it. So just get on with it, make it simple and do it now.
Steve Barclay
My right hon. Friend wants us to get on with it. I refer him to the meetings and the considerable work being done to allow us to get on with it. As a former Chair of the Public Accounts Committee, he well knows that many policy ideas start with the simple but then the devil is in the detail of delivery. I recall many an interview that he has given to draw attention to simple schemes that were then less simple in their delivery. It is worth bearing in mind that a small number of self-employed people—a very small proportion—might be doing quite well in the current climate, while many others are suffering, but that is not what we are focusing on now. The question that we are seeking to address is how we target our measures at those who are most deserving, which is what the attention of the House is focused on, and we need to ensure that the scheme that is brought forward does likewise.
Chris Stephens (Glasgow South West) (SNP)
Years ago, I read in the newspapers that there was a red Ed in the House of Commons; I did not realise that it was the right hon. Member for Gainsborough (Sir Edward Leigh).
I, too, will try to strike a conciliatory tone in talking to the Chief Secretary to the Treasury. Obviously, there is very real concern. Like other hon. Members, I have been bombarded with emails from people who are self-employed. When this crisis is over, we should really sort out who is self-employed and who should be directly employed, but that is a debate for another time. Countries such as Norway, Denmark and Belgium have come up with schemes for the self-employed; is he looking at those international examples? Surely what works in those countries can work in the UK. There are 330,000 self-employed workers in Scotland, working in areas such as the creative industries, agriculture, forestry, fishing, construction, and as taxi drivers. Are the Government looking at increasing weekly sick pay from £94.25 to the equivalent of a week’s pay at the real living wage? Are they considering removing the lower earnings limit for qualification for sick pay to ensure that everyone can access it? Are they looking at ending the five-week wait for universal credit, so that the first payment is a grant—a real payment—and not a loan?
Steve Barclay
On the issue of advance payments and universal credit, the Chancellor has increased the standard allowance. That is not the total quantum that people will get; I referred earlier to those with children, housing needs or a disability, who would get more. We have also made changes to access, so that people can get payment quickly, from day one, without face-to-face meetings. Concerns about subsequent repayments have often been raised in the House, but clearly, the £20 a week increase in universal credit that has been announced eases some of the repayment issues; it means that there is more in the allowance with which to address the issue of repayments. There has been a significant increase in universal credit, in part to address those issues. There is some operational complexity around a shift to a grant system because of the way that the universal credit IT system has been set up. We have sought to address the concern to which the hon. Gentleman refers through the increase, and of course an advance can still be offered.
Changes have been made to facilitate statutory sick pay being paid from day one, and changes have been made in respect of employers with 250 or fewer employees; the Chancellor set out measures to support those businesses with those costs.
The hon. Gentleman made a point relating to what I said about simplicity in a previous answer. Let me clarify the point that I was making. The vast majority of people who are self-employed are suffering; we recognise that. We are looking at how we can design a scheme that addresses the operational challenge that Members have spoken about.
Let me give an example. Part of the merit of the scheme that the Chancellor set out on furloughing members of staff, which is, I think, for many people a new concept, is that it gave clarity about delivery of the scheme. In answer to the previous question and the issue that the hon. Gentleman raises, we are looking at what is operationally deliverable quickly; what recognises other challenges in the Department for Work and Pensions and elsewhere; and what will not result in support going to a small proportion of people who should not be getting this targeted action, and instead allow us to focus it on the much larger cadre of people who deserve that help.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
In designing his scheme, will the Chief Secretary to the Treasury recognise that many self-employed people in the tourism sector have very seasonal businesses, so using February, for example, as a reference month would not be appropriate? Will he see what can be done to help recreational charter fishermen, who, because they pay harbour dues rather than business rates, have not been able to access the grant aid that their friends across the road from the harbour have been able to?
Steve Barclay
My right hon. Friend draws attention to the challenge that emerged from some earlier questions: the simpler the scheme, the less it accommodates often legitimate and deserving issues that Members raise on behalf of their constituents. I am very happy to have further discussions with him, but he will recognise the tension between simplicity and addressing all the concerns that colleagues raise.
Bambos Charalambous (Enfield, Southgate) (Lab)
Two of my constituents are musicians. One is in an orchestra, and the other is a freelancer. One will get 80% of his income paid, and the other will be on statutory sick pay. Surely, it would be better to have a system where one wealthy freelancer benefits but 100 do not go hungry.
Steve Barclay
I refer to my earlier comments. We are trying to target the support towards those who are in need, in a way that is operationally as deliverable as possible, mindful of the issues that have been raised. We also want to accommodate the other point that colleagues from across the House have raised, namely that we must ensure that those who have legitimate needs are not excluded from the measures.
Dr Julian Lewis (New Forest East) (Con)
Will Ministers consider suspending the application of the loan charge for the period of this emergency, thus stopping the hounding of the self-employed people who were the subject of an important debate in this place last week?
Steve Barclay
I can provide a degree of reassurance to my right hon. Friend that the self-assessment has been deferred from July to August. That is one of the areas where the Chancellor has taken action to address concerns.
Matt Western (Warwick and Leamington) (Lab)
Many of us, up and down the country, depend on sole traders for jobs around the house. People in many communities that experienced flooding are expecting others to come to their homes and do work for them. How on earth are those households supposed to say, “We cannot have you helping us out and repairing our homes?” They are desperate for plumbers, electricians and so on. Those electricians, those plumbers and the owners of those properties want to do the right thing. What is the advice of the Government?
Steve Barclay
Without straying into individual cases, the key advice from the Government is to follow the medical advice that was set out following the Prime Minister’s statement and updated on the Government website. That sets out the advice to workers, including what is safe to do and what is essential.
Bim Afolami (Hitchin and Harpenden) (Con)
In its unprecedented support for employed workers, the Treasury took a fairly generous overarching approach. I urge the Treasury—I am not the only one saying this; it represents the mood across the House—to take a similarly broad approach to benefit the majority of self-employed people who will need support, accepting that certain people may get support even if they do not quite need it.
Steve Barclay
The Treasury is looking at those issues in the design of the scheme. We recognise that the vast majority of self-employed people face very considerable challenges, and we are mindful of the urgency that goes with that.
Ben Lake (Ceredigion) (PC)
More than 400 self-employed sole traders and freelancers have contacted me over the past 24 hours, and many of them have already lost their work because of this crisis. As well as echoing others’ calls to introduce support for them as soon as possible, can I ask the Minister to ensure that such measures are backdated, as in the job retention scheme, to help to address the disruption that has already been caused by the covid-19 epidemic?
Steve Barclay
I hear what the hon. Gentleman says about backdating. The Treasury has brought forward a range of measures, and one of the challenges to date has been that it is not always understood what has been announced and what is already available. I draw attention to the fact that we are deferring income tax self-assessments, which will not need to be paid until January; we are supporting people through the welfare system with the measures that I announced earlier, including on contributory ESA; we are increasing universal credit and working tax credit by £1,000; we are suspending the minimum income floor for 12 months; we are increasing a three-month mortgage holiday for those in difficulty; the self-employed will be eligible to receive support with their tax affairs through time to pay; the business interruption loan scheme will be available for some self-employed individuals, up to the £5 million limit; and we have delayed IR35. Members of the House can assist our small business community, and particularly the self-employed, by drawing attention to the measures that have been announced. We in Government also stand ready to do that through a comms campaign.
Ms Nusrat Ghani (Wealden) (Con)
I know that my right hon. Friend is working night and day to help businesses, and to help people stay in work. I am incredibly grateful for all the support he has given me as I respond to the self-employed in Wealden. The decision to take out a loan is proving to be quite an anxious one for the self-employed, if that is the only thing on the table. I will read out an email from Anna, a self-employed wedding photographer who has had to give up work, and who is going to try to find work elsewhere:
“I am loath to take any…loans offered, as there is no guarantee that future work will be able to take place because we have no idea how long this pandemic will last.”
I ask my right hon. Friend to take into account Anna’s dilemma before making any announcement concerning the self-employed.
Steve Barclay
My hon. Friend is right to draw attention to the pressure
and decisions that Anna and so many self-employed people are facing at this time. I draw attention to the fact that the loans are interest-free for 12 months. One of the key themes we are very conscious of is that it is a health emergency that is impacting on our economy. These were viable businesses before that health emergency arose, and they will be viable businesses after we have overcome it. The question is, how do we bridge the gap? How do we support Anna and others through this period? The interest-free loans are not the only measure; I have just drawn the House’s attention to other measures that are available, and I urge Anna and others to take advantage of them.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I appreciate the difficulties in coming up with these arrangements, but I draw the Minister’s attention to the fact that small traders are simply applying for universal credit, blocking up the universal credit system, because they are desperate for money from somewhere. That is causing a problem for the Department for Work and Pensions, so delay does not get the problem to go away. People do not wait; they just try to find something else, which causes a knock-on problem.
Steve Barclay
I accept the concern the hon. Lady raises, but I think she would equally accept that this is an unprecedented challenge and that staff in the DWP and elsewhere are working heroically to address the increased volumes. The best way for all of us to address this issue is through wider support for the economy as a whole. That is what was behind, first, the £30 billion of fiscal measures announced by the Chancellor at the Budget; the further announcement of the £350 billion, including £330 billion of loans, and the wider package last Tuesday; and the further measures announced by the Chancellor on Friday. That is on top of the measures the Bank of England has taken—for example, reducing base rates, and the £200 billion of bonds. A range of measures have been taken to support the economy and to reduce that blockage, but I absolutely accept that the numbers have increased, and we are reprioritising work in the DWP to assist with that.
Andrew Griffith (Arundel and South Downs) (Con)
My rural constituency has one of the highest concentrations of self-employed people in the country, so while I and other Conservative Members thank my right hon. Friend for the timely and unprecedented measures he has come forward with, I add my voice to the growing consensus across the House for measures to be extended to the self-employed.
Steve Barclay
My hon. Friend speaks with considerable business and financial experience, and he will know the cash-flow issues and the challenges that many of the businesses in his constituency face. We absolutely hear his message, just as we do the message from Members across the House, and that is why we are moving at pace to address them.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Further to the point I raised at Treasury questions, which was echoed by the shadow Chancellor, the newly under-employed must be supported further. One of my constituents is a self-employed taxi driver with no work, due to the lockdown. His wife and four children have underlying health conditions. Any universal credit application would mean their tax credit ceasing. A jobseeker’s allowance application would mean having to prove that they are seeking work and engaging with their accountant. Will the Chief Secretary tell them how they can possibly put food on the table and pay their bills?
Steve Barclay
The hon. Gentleman speaks to a real concern and a real issue, but I draw attention to the fact that one of the challenges is to communicate what support has already been announced by the Chancellor. To give an example, a family renting in Sheffield with two children would be eligible for around £1,750 a month in support—far more than the £94 per week, if we take account of additional things such as housing and children’s support. It is about what package of support is available, and the Chancellor has already announced considerable measures in that regard.
Mr Mark Harper (Forest of Dean) (Con)
I listened carefully to what my right hon. Friend said. He acknowledged that the vast majority of self-employed people were being impacted. If he makes sure that whatever help is given is taxable, we can claw back any money that is overpaid to those who are doing well. However, what self-employed people are looking for is a clear commitment today that whatever scheme is set out is of a similar magnitude to that for employed workers. If the Chief Secretary can say that, it will give people confidence to borrow, knowing that they can pay the money back. That will go a long way towards solving the problem.
Steve Barclay
As I have said, the Chancellor held meetings with small business leaders this morning. He is having further meetings on this issue today. He is very aware of the concerns raised by my right hon Friend and other Members, and we continue to work at pace on this issue.
Mr Kevan Jones (North Durham) (Lab)
I am sorry that the Chancellor is not here, but may I ask the Minister to pass on to him that the self-employed people contacting me are not wealthy individuals? They are individuals such as Andrew Brown, who I raised last week—a self-employed graphic designer whose income has disappeared. They are taxi drivers. They are small catering companies. Unless action is taken now for these individuals, not just to relieve the hardship they are facing, their businesses will no longer be in existence. My fear is that we will generate unemployment among these people for a long time to come.
Steve Barclay
I agree with the first part of that. The right hon. Gentleman is absolutely right about the vast majority of these people. I have made that point repeatedly. I referred earlier to the fact that the target population has different elements, but the vast majority of those who are self-employed face enormous challenges. We absolutely hear that, and I accept that. On his second point, we have taken a number of measures, but we recognise that more is needed. That is why my right hon. Friend the Chancellor is meeting leaders on this issue today to look at what further measures we can bring forward.
Steve Brine (Winchester) (Con)
May I say that I do understand that this is difficult? If it were easy, the Chancellor would have announced it last Friday with the rest of the package. The self-employed people I represent just want a sign; they just want some hope and an indication. I think they have had that today from the Chief Secretary and the Chancellor, but may I make a suggestion? For self-employed people and all other people right now, if they cannot get the same in, they have to send less out. The Government worked magic last week with the mortgage companies, which seem to be falling over themselves to offer mortgage holidays, but all the other fixed costs that our constituents face—utilities; insurance premiums; car finance; council tax bills, which landed on the doorstep last week; and even, for some, a business improvement district levy due next week—are still there. I wonder whether there is something the Minister can take back to the Treasury, perhaps with help from the shadow Chancellor, on those sorts of fixed costs, because they are dragging people down at a time when they have a lot less coming in.
Steve Barclay
My hon. Friend is right that there is a range of costs. As I say, we are looking as part of our support at what action can be taken. He can see, as an illustration of that, the action that has been taken on mortgages and in support of renters—both for mortgage holders directly and in terms of the buy-to-let market. Measures have been taken, but we stand ready to look at further measures.
Caroline Lucas (Brighton, Pavilion) (Green)
The local economy in Brighton and Hove is overwhelmingly dependent on the self-employed, so I cannot overstate how urgent it is that we have action on this. I do not know whether the Minister gave a deadline when he spoke to his colleague earlier, but if he did not, will he please tell us that we will have action by the end of the week? Universal credit is not a fair option for many freelancers, because it means they have to delve into savings that they have put aside because they do not have pensions. We are going to push them into greater insecurity right now if we cause them to have to rely on that instead.
Steve Barclay
As I said in my opening statement, the Chancellor is meeting on this today and we hope to bring forward proposals in the coming days.
Jason McCartney (Colne Valley) (Con)
I welcome that the Treasury is working hard on supporting the self-employed. We must remember that these are local freelancers. They are mobile hairdressers, childminders, freelance driving instructors, photographers, musicians, IT consultants and home-based travel agents. They have lost all their income. Can the Minister confirm that the package for the self-employed, freelancers and sole traders will be announced by the end of the week?
Steve Barclay
I refer to the answer I gave a moment ago. We are actively looking at this and we hope to bring forward proposals in the coming days.
Bill Esterson (Sefton Central) (Lab)
The way around the problem that the Minister, and the Chancellor before him, identified of giving money to people who do not need it was given to him by the right hon. Member for Kingston and Surbiton (Sir Edward Davey). The money can be recovered later. Do not let that concern about a handful of people get in the way of putting the scheme in place and deny desperate people, who cannot put food on the table, money they need right now.
Steve Barclay
As the hon. Gentleman’s earlier question in Treasury questions suggested, that is not the sole consideration. It is a question of what the operational delivery issues may be: for example, we do not hold details of people’s bank accounts, so how would we do it? It is how we roll this out, but we recognise his wider point that there are immediate issues for many self-employed people. That is what we are actively working on, and that is what my right hon Friend the Chancellor is engaged on in further meetings today. As I said in my previous answer, we hope to bring proposals forward in the coming days.
Kevin Hollinrake (Thirsk and Malton) (Con)
My right hon. Friend mentioned earlier the business interruption loan scheme. Will he confirm that all self-employed people will have access to it and that they will not have to give personal guarantees? Will the Government widen the scheme to include institutions such as OakNorth and Aldermore, which are currently excluded from eligibility?
Steve Barclay
We are looking into that, but it is available as of now. It goes up to £5 million and my understanding is that it does not require personal guarantees. If it is any different, I will come back to him on that point.
Wendy Chamberlain (North East Fife) (LD)
A constituent in East Fife runs a mobile catering business, providing a service to both private and public events such as festivals. Having no fixed premises means that they will not benefit from the support announced so far, and the relaxation of planning rules that other food outlets can benefit from to do home deliveries is also an issue. They are also struggling, like many others, to access business interruption insurance. The independent mobile catering sector could be utilised to support and provide sustenance for our key workers. What amendments to the measures will the Chief Secretary consider to support that critical sector?
Steve Barclay
I know that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is looking at a range of options in terms of how we adapt to the change of circumstances. For example, many pubs and restaurants had significant food orders, so we are looking at what can be done there. There is food that would have been exported previously, but that may now be difficult, so there is a range of measures in terms of the food supply within which mobile caterers will have a role. I know that my right hon. Friend is looking at those issues.
Bob Blackman (Harrow East) (Con)
In my constituency I have a large number of families where one partner works in the national health service and the other is self-employed. The children have been sent home from school and there is no one to look after them, because if the self-employed parent does not work, they do not get paid. Can my right hon. Friend look urgently at a scheme? Also and specifically, council tax bills are due on 1 April—next week—and people are worried, particularly in London, about how they will be able to pay. Can council tax bills be suspended?
Steve Barclay
My hon. Friend will recall that the Budget included targeted action specifically on council tax, with a £0.5 billion package to allow targeted support on council tax. I think he is drawing his attention to a slightly wider issue of concern, particularly where one member of a household works in the NHS as a key worker and one is at home, but of course that draws attention to the fact that this is a complex scheme that we are seeking to design. Those are the sort of issues we are working through.
Wes Streeting (Ilford North) (Lab)
I have so many self-employed workers in my constituency, including more than 1,000 taxi and private hire drivers. They will understand from what has been said this morning that the Government have good intentions, but they will respond to me that good intentions do not pay their bills. Given that there will be a lag with the new system coming in, what more can the Government do in the meantime, through offsetting tax bills and also encouraging banks to be more generous with free overdraft facilities to help families through this? Let us not forget that we all bailed out the banks when they needed it, so maybe it is time for them to do something now.
Steve Barclay
The hon. Gentleman is right in terms of the role of the banks, and a clear message has been sent by the Bank of England Governor about the importance of banks showing forbearance at this time. That applies to things such as credit card debts, but also he will be aware that, for example, for many of his constituents in a London constituency, their rent is a significant issue, as well as the measures we have taken on mortgages. We have looked at what we can do to assist on some of those fixed costs, but the banks have had a clear message from the Governor about the need to show forbearance.
Richard Drax (South Dorset) (Con)
I commend those on the Treasury Bench for the calm way they are dealing with this unprecedented situation, but clearly something needs to be done for the self-employed. One of my constituents has made three points. First, they will be disadvantaged because they will not get the topping up that an employer might give an employee. Secondly, there will not necessarily be an immediate return to work, and finally seasonality may affect their income, which of course it would not for an employee. Will those three very good points be taken into account by those on the Treasury Bench?
Steve Barclay
They are good points, and again they draw attention to the conflict between simplicity and addressing the various specific issues that Members have raised. One of those is seasonality, which obviously has an impact. That is why the design of the scheme is more complex than perhaps meets the eye, but we are looking at the issues and we intend to bring forward proposals in the coming days.
Owen Thompson (Midlothian) (SNP)
Like many other Members, I have been contacted by many self-employed people in my constituency who are welcoming of the support already offered, but in need of the absolute guarantee about what is still to come and quickly. Going into the shop to buy essential groceries for feeding their family and telling the checkout supervisor that the Chancellor says that they can pay for it soon is not going to get them their shopping, so how soon can we give that certainty?
Steve Barclay
We hope to bring forward proposals in the coming days. I absolutely appreciate the concern that the hon. Gentleman is quite rightly raising for his constituents. This does not address his specific question but, in part, that is why we have been strengthening the safety net of the welfare system, and why the main measures we have taken are to support the economy as a whole. That is the best way to get viable businesses, including the self-employed, back and earning money once we have dealt with the health emergency. We are looking at the specific issue of the self-employed, and we intend to bring forward proposals in the coming days.
Steve Double (St Austell and Newquay) (Con)
While many of our supermarket shelves are empty at times, a food source currently going to waste is fish. Most of our fishermen are self-employed, but they have seen their markets collapse, because pubs and restaurants are closed and overseas markets are closed to them. Will we look for a bespoke package to support our fishermen through this time and, in particular, to find ways to get their fish sold to people who could buy it to feed their families?
Steve Barclay
My hon. Friend makes an important point, and one that the Secretary of State for Environment, Food and Rural Affairs is aware of. I am sure that he will be happy to have further discussions with him in the coming days. My hon. Friend is right, the pub and restaurant trade having collapsed, there is not only food that would have been provided to them, but capacity in our fishing catch, because of the quota rules.
Kevin Brennan (Cardiff West) (Lab)
I know that the Minister has been sent out with a new three-word slogan from the Government’s three-word slogan unit, namely, “Help is coming”, but may I remind him that the previous one was, “Whatever it takes”? That is what the Government pledged, and it should apply to self-employed people too. He just said that, in the coming days, there will be some further clarity. There is fear across the House that we might not sit next week, and that the Government may be getting to the point where they do not have to come back to the House to account for what they are doing for the self-employed. What assurance will he give us that whatever “Help is coming”, it will constitute “Whatever it takes” and will be equivalent to what is being offered to employed people?
Steve Barclay
I am very happy to make it a six-word slogan, if the hon. Gentleman prefers: “Help is coming”, and we will do, “Whatever it takes”. As to whether the House will sit, that is not an issue for the Government, as he well knows as an experienced Member of the House. Whether the House sits—whether Ministers are called to answer questions—is a matter for the Chair, and not for Ministers. In fact, we had an urgent question last week, and we have one here, so that suggests that Mr Speaker is keen to ensure, quite properly, that Ministers are held to account.
Caroline Nokes (Romsey and Southampton North) (Con)
Many self-employed have already taken the right decision and socially distanced themselves—the hairdressers who have not gone into care homes, the taxi drivers, the driving instructors—but they are looking for some reassurance from my right hon. Friend that they have done the right thing and will not be penalised for it.
Steve Barclay
Again, that is quite right in terms of the self-employed, which includes many hairdressers, but my right hon. Friend will also be aware of measures we have already taken—they will support many hairdressing businesses—such as the business rate relief and the grants. The £10,000 grants targeted at the 700,000 smaller businesses are, again, part of the package of measures to apply to some of that population. However, it is clear from many of the questions that populations are not tightly set, and that there is a degree of overlap and underlap, which is what we are working through.
Jim Shannon (Strangford) (DUP)
Many farmers are self-employed, often on family farms, with a husband and wife team, or a son or daughter. The Minister and others in the House will know that lambing is taking place now, and the first lambs will be sold in July, but the prices for lambs and beef cattle are the lowest they have ever been. What help will the Minister and Government give to farmers who face financial ruin at this time?
Steve Barclay
As I see from the farmers in my own constituency, there is considerable demand from for UK-produced food. I am very happy to continue to work with the hon. Gentleman, and we have often had conversations about farming issues in the past. I am happy to continue those conversations, alongside those with the Secretary of State for Environment, Food and Rural Affairs, about how we support our farmers, but I think their products will be in great demand moving forward.
Dr Andrew Murrison (South West Wiltshire) (Con)
May we please have further clarity on how builders, plumbers, electricians and plasterers should be conducting themselves at work or, indeed, whether they should be at work at all? There seems to be some confusion as to whether they should be on site or in premises. A leading builders merchant contacted me this morning to say that it had to shut up shop because it feared that the collection of the builders outside its premises were failing to socially isolate, and it was concerned about what that would mean. It seems that there has been some confusion over the past 24 hours, so I wonder whether the Minister can clarify the advice for those crucial people.
Steve Barclay
I am very happy to draw my right hon. Friend’s concerns to the attention of the Secretary of State for Health and Social Care so that precise medical guidance can be given to address the concern he raises.
Several hon. Members rose—