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Topical Questions

Volume 685: debated on Tuesday 1 December 2020

This Government’s economic priority remains the protection of jobs and people’s livelihoods. It is our relentless focus. To that end, we have committed £280 billion this year.

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—

Order. Questions have got to be short and punchy—that is the idea of topicals—to get everybody in.

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?

I stand by what I said. Those earning less than £24,000 in the public sector, 2.1 million people, or 38% of all people working in the public sector, will receive a guaranteed fixed increase of at least £250.

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.

Last week, my right hon. Friend announced the national infrastructure bank, which will be headquartered in the north of England, and a £4 billion infrastructure investment fund. Can he outline more of the details of those proposals and how, in particular, forthcoming projects will benefit my constituents in Southport? (909645)

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.

The Government’s financial support for people and businesses during the pandemic has been a lifeline, but many people have not been able to access support, such as some self-employed people, business owners, freelancers and company directors, including many in the tourism and hospitality sectors, which are so important in Cumbria and are now struggling to survive. Will the Government work to find a way to support these individuals, perhaps on a loss of income basis similar to the discretionary grants or hardship schemes that were devised for the dairy sector? (909648)

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.

During a covid briefing last week, a Health Minister suggested that the north-east is highly unlikely to be moved from tier 3 to tier 2 this side of the new year, even if there is a review in two weeks’ time. Does the Chancellor share this message of no hope for the north- east? Will he publish his secret dashboard on the economic impact of covid, and does he agree that the Government need to be honest with the hospitality sector and go much further with support to stop more businesses going bust? (909646)

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.

Carshalton and Wallington businesses, particularly pubs and restaurants, have been in touch and while they welcome the support that has been offered so far, they are concerned about having a road map to reopening and, indeed, the support over Christmas. Does the Minister anticipate, as we begin to roll out several vaccines, that we will have the road map to reopening, and will he look again at tiering restrictions, particularly in tier 2? (909649)

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.

Like so many in this House and across the country, I am very concerned by the threat to thousands of jobs triggered by the collapse of the Arcadia Group. The loss of Debenhams in Friars Walk in Newport West will have a massive impact on Newport city centre and the livelihoods of local people and their families. Will the Chancellor outline what discussions he has had about how he can give those people the support they deserve? (909647)

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.

Thank you, Mr Speaker. I thank my right hon. Friend for the financial package worth more than £150 million to support Harlow businesses and hard-working residents, but will he recognise the difficulties that are being faced by my constituents, particularly freelancers and directors of limited companies, who have been without any form of financial support—or almost any form of financial support—for eight months now? This is having a detrimental impact on my constituents’ livelihoods and mental health, so will the Minister outline what steps he is taking to ensure that these individuals, who have so far found themselves excluded from covid-19 support schemes, are able to access some significant financial assistance? (909651)

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 hear concerns from many pubs in my constituency, such as the Barmy Arms in Twickenham and the White Hart Inn in Whitton, about how on earth they are going to make it through this winter. Given that London is to be placed into tier 2, with some of its perverse rules for pubs, will the Chancellor look urgently at further extending VAT relief and business rates relief, and further grants for the sector, please? (909650)

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.

I warmly welcome the Chancellor’s renewed commitment to levelling up in last week’s spending review. Enterprise zones have a vital role to play in that levelling up. Will the Chancellor agree to meet me and some colleagues who have a particular interest in seeing a new generation of enterprise zones? (909652)

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.

Contrary to the impression given a few moments ago, it is only the United Kingdom Government who can exempt bonus payments to Scottish key workers from tax and national insurance under schedule 5 of the Scotland Act 1998. If they choose not to do so, the Treasury will get a windfall from these payments, with the consequent reduction in the Scottish block grant. So I ask again: will the Chancellor allow Scottish key workers to keep the full value of the bonus that they are being given by the Scottish Government? (909654)

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.

Does anybody in this Conservative Government still believe in a low-tax, deregulated and small-state Britain? In which case, what are they going to do about it? As they prepare for the Budget, may I suggest one that reduces, not increases taxes on entrepreneurs and wealth creators, to kick-start the economy? (909656)

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.

Does my right hon. Friend agree that the best time to invest in the emotional lifelong capacity of a human being that leads to future economic productivity is in the critical period between conception and the age of two? The Prime Minister’s levelling-up agenda will be best served by ensuring that every single baby across our United Kingdom gets the best start in life. (909657)

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.

The Chancellor provided £750 million for charities at the start of the pandemic. However, that money has been spent, and the charity sector now faces £10 billion of debt. Many organisations are due to close, and there was no mention of support in his statement last week. What additional support will he provide to save our charities and help them do their vital work? (909664)

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.