I thank my right hon. Friend for his answer. Many businesses in Arundel and South Downs, such as hospitality, events, beauty and wedding venues, have been hit terribly hard by the pandemic. It is no exaggeration to say that the support he has offered so far has been an absolute lifeline. But as my constituents now find themselves in tier 2, with all the uncertainty and restrictions, will he continue to do what he can to protect the very enterprises this nation will need—
My hon. Friend is right to champion his local businesses, something he knows well from his own experience. I can give him that reassurance. I know it has been a very difficult time for his small and medium-sized companies. They have my assurance that I will keep working hard to support them. He knows, better than most, that they will drive our recovery.
Last week, the Chancellor said that public sector workers on less than £24,000 would be guaranteed a pay rise, but then said that they would receive a fixed increase of £250. Will he correct the record to confirm he is delivering a real-terms pay cut for many teaching assistants, prison officers and police constables?
Even if no deal is avoided, we appear to be headed for a thin-as-gruel deal with the EU. The Office for Budget Responsibility says that that would lead to a long-run loss of output of about 4%. That is on top of the slowest recovery from covid in the G7, as predicted by the OECD today. The Chancellor previously said that his Government’s deal would reduce costs for ordinary working families and promised its impact would be modelled. Will he provide that modelling and is he confident that it will show that positive impact?
I would not want to pre-empt the outcome of the ongoing talks, which I can say are constructive and proceeding with full intensity. I am very hopeful that they can reach a positive conclusion. More broadly, regardless of the exact nature of our trading relationship with our European friends and allies, I remain very confident in the economic future of our country and the opportunities that will come our way.
I am happy to provide that information. The new national infrastructure bank will invest in projects like transport, digital infrastructure and renewable energy through a series of loans, guarantees, equity and other hybrid products. The levelling-up fund will fund what I call the infrastructure of everyday life—projects up to £20 million that can be delivered quickly—make a tangible difference to our constituents and increase the pride we feel in the places we call home.
Yesterday, Scotland’s First Minister announced her intention to award a £500 thank you payment to Scottish health and social care staff in recognition of all they have done throughout the pandemic. Powers over tax allowances, exemptions and national insurance are reserved to the UK Government, so will the Chancellor do the right thing and ensure that this festive gift of good will is not clawed back by Her Majesty’s Revenue and Customs?
As the hon. Lady should know, the income tax on these payments is actually paid to Scotland, not to Westminster. The Scottish Government have the power and the funding to gross up the payment if they wish. The UK Government have provided over £8.2 billion extra funding for the Scottish Government this year to support people, businesses and public services.
My hon. Friend is absolutely right to focus on the specific impact that he and we all, as constituency MPs, have in our constituencies. I think he knows—we have discussed this at some length—that we are always happy to look for more schemes and more suggestions, if he would like to write to me with some details of what he has in mind. He will also be aware that, as I said, I am meeting the Federation of Small Businesses, the Association of Chartered Certified Accountants and, in due course, I hope the all-party group to discuss these issues in more detail.
I am sure that the hon. Gentleman will listen carefully to what the Prime Minister and the Health Secretary have to say immediately after these questions, and I believe there is hope for all parts of our country as we fight against this virus. With regard to this dashboard, I would refer him to the document published, which contains a sectoral dashboard and, as I said, links to further information that people can find about the regional composition of their local economies, sectoral business resilience and employment outcomes.
The covid-19 winter plan, published on 23 November, sets out the Government’s plans for the coming months, and our objective is to find new and more effective ways of managing the virus to enable this route back to normality. That will be achieved through the deployment of vaccines, but also through improved medical treatments, expanding the capacity of the test and trace programme and using rapid testing to quickly identify and isolate cases. These measures will provide confidence as we approach spring that life will get back to normal.
The hon. Lady raises a good point. Obviously, the news about Arcadia and Debenhams will be deeply worrying for employees and their families, and the Government stand ready to support them. With regard to various things that are ongoing, there are negotiations between various parties in the companies at the moment, particularly with regard to pensions, and it would not be right for me to comment specifically on those, but she can rest assured that we keep an eye on the situation.
I thank my right hon. Friend for his question. Throughout the crisis, as he has acknowledged, the Government have spent over £280 billion. He referred to the self-employment income support scheme. Support for the grant has recently been increased from 55% to 80% of average trading profits from November to January, capped at £7,500 in total, and the claims window will be open until 30 November. Obviously, a range of additional support mechanisms have been put in place, including the additional restrictions grant. As my right hon. Friend the Financial Secretary said earlier, we will continue to look sympathetically and constructively at all other representations made.
I know about the difficulties that the hospitality sector is experiencing at the moment. The hon. Lady will know that the various measures she spoke about—the business rates holiday and the VAT cut—last all the way through to next spring, so they will provide support during the winter, and we have in place a grants programme that provides grants to businesses in the hospitality sector, whether they are open in tier 2 or closed, with further support provided to local authorities for discretionary support, as they see fit.
My hon. Friend is right to raise this important issue. The Treasury recognises the role that enterprise zones play in our economy. This is an area specifically of interest to me and I will be delighted to meet him to discuss it further.
First, the approach of the United Kingdom Government to these Scottish payments is exactly the same as applied recently in Wales. To further reinforce the point that I made a moment ago, while decisions on whether to exempt these payments are reserved, the Scottish Government will keep all the income tax receipts from these payments, so if they wish NHS and care workers to receive £500 net of tax, which is what they say is their wish, they can simply increase the value of the payments going to them. That is the point of substance. That is the point they do not want to engage on.
That is music to my ears. My right hon. Friend is absolutely right: this is a Government who believe in a low-tax dynamic economy. He will also appreciate that, in the midst of the crisis that we are facing, it is incumbent on the Government to provide unprecedented support to preserve the economic capacity of our country. But as soon as we get through this, I, like him, look forward to returning to that dynamic free market economy that we both passionately believe in.
I assure my right hon. Friend that I agree with her. The Government remain committed to improving health outcomes during the first 1,001 days and early childhood. At the spending review, we confirmed an additional £25.8 million to increase the value of healthy start vouchers to £4.25, in line with the recommendation of the national food strategy, to help combat child food poverty and to give children the best start in life. I am very supportive of her review into early years health and I look forward to reading her final recommendation.
As my right hon. Friend the Chancellor set out earlier, and as the Office for Budget Responsibility set out last week, the total package of support comes to over £280 billion. In the spending review last week we also signalled further support as part of our covid response, with an additional £55 billion next year. Of course my right hon. Friend continues to keep under review the specific support to the charity sector, but as he set out in his earlier response, a comprehensive package of support has already been allocated. We will of course keep that under review.
My right hon. Friend will know that pubs in tier 2 areas such as York will be hit particularly hard by the Government’s requirement to serve alcohol only with a meal. Given that pubs were already struggling prior to the pandemic, does he agree that now, more than ever, we need a fundamental reassessment of the way we tax beer and pubs?
As the Chancellor set out in the Budget, we are undertaking a comprehensive alcohol duty review, which will provide an opportunity to look at this issue in depth. My hon. Friend will also be aware that in six of the last seven Budgets the Government have cut or frozen beer duty, meaning that it is now at its lowest level for 30 years, but as part of our wider support package we will obviously keep that under review.