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Volume 685: debated on Tuesday 1 December 2020

The Chancellor of the Exchequer was asked—

Universal Basic Income

Whether he has had discussions with Cabinet colleagues on the potential merits of introducing a universal basic income to support economic recovery following the covid-19 outbreak. (909584)

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

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

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

“difficult to see how”—

a universal basic income—

“would substantially alleviate poverty”,

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

Ineligibility for Covid-19 Financial Support

What representations he has received from organisations representing people who are ineligible for covid-19 financial support schemes; and if he will make a statement. (909585)

What representations he has received from organisations representing people who are ineligible for covid-19 financial support schemes; and if he will make a statement. (909587)

What representations he has received from organisations representing people who are ineligible for covid-19 financial support schemes; and if he will make a statement. (909606)

What representations he has received from organisations representing people who are ineligible for covid-19 financial support schemes; and if he will make a statement. (909613)

What representations he has received from organisations representing people who are ineligible for covid-19 financial support schemes; and if he will make a statement. (909616)

Before I start, I know that Members from around the House will join me in commemorating World AIDS Day and the many organisations that make this day happen. As we remember those we have lost to HIV and AIDS, we also remind ourselves of the need for further action. I am proud that this Conservative Government’s policy is to end new HIV transmission by 2030—a commitment reaffirmed today at the launch of the HIV commission.

Throughout this crisis, the Government’s economic priority has been to protect jobs, livelihoods, businesses and public services, and we have spent more than £280 billion in doing so.

Given that the Chancellor has accepted that the job retention scheme and the self-employed income support scheme need to be in place until March, does he think it is right that those who have fallen through the gaps in those schemes—highlighted by the Federation of Small Businesses—will have been without support for an entire year by then? Why have Ministers not had the decency to meet groups such as ExcludedUK?

My right hon. Friend the Financial Secretary is meeting that group and other Members, and I and other members of my team have met various representatives of the self-employed and other employed people who would like to make representations. It is fair to say that I do not agree with the idea that those people have been excluded: the Government have provided support in many different ways to many people in different circumstances. We remain committed to that support throughout this crisis.

Surely the Chancellor can understand that these people do not have any money—they have not benefited from the Government schemes that Members from all parties welcome. How can it be that the Musicians’ Union, ExcludedUK, the FSB and various other organisations and trade unions can be wrong, and that the people who have not benefited from the schemes can be wrong, and the Chancellor can be right? Why does he not accept that he has made a mistake and introduce additional funding to support those people who have been excluded from the schemes?

I am not making the point that every single person can access every single scheme that the Government have put in place. That is not what I am saying; everyone will have different circumstances. What I am saying is that across the suite there is a range of support—a sum total of £280 billion-worth—designed to protect businesses, the employed, the self-employed and public services. Indeed, councils have been given large amounts of funding—billions of pounds—to help those in their communities who need it most, and they are well placed to make those decisions.

In the summer, one of my constituents opened a new bar in a previously thriving area, but she shut it on 23 October as we went into tier 3. She paid her workers for that week, but she could not get furlough support until 1 November because, as hers was a new business, her staff were not eligible for registration with the previous scheme. She is just one of many who the Chancellor will know have fallen through the gaps in his support schemes. Will he recognise the problem, act to close the loopholes and provide the support that is needed, particularly in the hospitality sector and its supply chain?

The hon. Gentleman mentioned support for the hospitality sector and bars; he will of course know that support has been provided through initiatives such as the business rates holiday, which I am sure his constituent benefited from for this entire year up until the point she was struggling, as well as the cash grants for businesses earlier in the crisis, the VAT discount, eat out to help out and the further support provided to local authorities to support the supply chain. There is a significant amount of resource to help businesses like that of the hon. Gentleman’s constituent, which I know have had an extremely difficult time.

I was recently contacted by David and Alice, a couple with four young children. They are both directors of Around the Box Limited, but have seen their income slashed this year as a result of the pandemic. Around the Box sells boxes of puzzles and games to encourage families to laugh and connect. I trust the Chancellor will agree that such companies, which bring joy to families in times of real hardship, should be protected. Why, therefore, have my constituents, David and Alice, along with millions of people like them, been excluded from all Government support and left to fend for themselves?

I feel very bad for David and Alice with the difficult situation that they are facing. However, I am sure that their small business, like a million other small companies across the country, has been able to benefit, I hope, from the bounce back loan programme, one of the most successful small business loan programmes that we have seen throughout this crisis. It has provided tens of billions of pounds to a million small and medium-sized businesses—up to £50,000—to help exactly those companies to get through this difficult time.

While the Government have provided support for creative institutions through the culture recovery fund, they are running the risk of losing our world-renowned elite west end musicians who are excluded from financial support due to being freelancers or limited companies. We risk losing these elite skills altogether and damage to the industry would have a negative impact on the ability of young musicians from working-class towns such as Luton being able to pursue a career in music.

Considering the sector provides more than £5 billion to our economy, can the Chancellor update the House on what barriers remain to getting support to musicians?

There is no barrier to support for anyone to access any of the various things that we have put in place. I am glad that the hon. Lady mentioned the culture recovery fund. At £1.5 billion, it is something that I do not believe any other country has done at such a scale, coupled to which is our further support for the creative arts and the film and TV production industry, which my right hon. Friend the Financial Secretary to the Treasury will be talking about later. We agree that this is an important sector and we want to ensure that it can get back to work.

I would never accuse the Chancellor of misleading the House, but he certainly seems to have misled “Good Morning Britain” when he told viewers that he had spoken to, and had back and forth with, representatives of excluded groups. Those groups are clear that he has not. Will he apologise for the oversight and make amends by meeting MPs and representatives of all groups that have been denied financial support?

I know that my right hon. Friend the Financial Secretary to the Treasury is meeting with that particular group. In that interview, I was making a general point about the fact that I and my team had met with various representatives of those who are self-employed. It is something that we did right at the beginning of this crisis as we looked to design the self-employed scheme and we have continued to do so throughout.

We all understand that it was hard back in March to get every detail right on Government support schemes, but nine months on, why does the Chancellor still have absolutely nothing new to say to those millions of people right across our country who have been shut out from support since the beginning?

Perhaps the hon. Lady could let me know whether she thinks that it is right to target support on those who are majority self-employed. She refers to the millions of people, but, as I have explained from this Dispatch Box, 1.5 million of the 5 million people who file self-employed tax returns are not majority self-employed; they earn the majority of their income from things such as employment, which means that they can access, for example, the furlough scheme. That was a decision that was made because we are targeting support in a certain way and we do not know what individuals are doing. By the way, the principle of our decision was supported by every organisation that I spoke to as we designed the scheme. Indeed, they were all supportive of a much higher threshold—a less generous threshold—than the one that we ultimately used, which was a majority of 50%. They were all supportive of something higher— 60%. Rest assured, Mr Speaker, that those who are in that category have median self-employment earnings of between £2,000 and £3,000; it is not the primary source of their income. At that level, all the various other things that we have done will be of some help to them.

Fiscal Policy: Household Income (Scotland)

What recent discussions he has had with his Scottish counterpart on the effect of his Department’s fiscal policy on household income in Scotland. (909586)

What recent discussions he has had with his Scottish counterpart on the effect of his Department’s fiscal policy on household income in Scotland. (909590)

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

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

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

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

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

Bounce Back Loan Scheme

As of 15 November, the bounce back loan scheme has supported nearly 1.4 million businesses with facilities totalling over £42 billion. This includes the extra amounts received from our bounce back loans, which have been topped up to a higher amount, providing further help to businesses that are in need of monetary support.

The scheme has been a huge success, but according to research by the all-party parliamentary group on fair business banking and Funding Xchange, about 250,000 businesses were locked out of the scheme because they banked with non-bank lenders and the banks that have liquidity to provide funds in this way either closed to new customers or have no appointments left until the end of January, when the scheme closes. What action is my hon. Friend taking to address this very important issue?

The Government cannot force lenders to open to new bank customers for bounce back loans, but we have repeatedly encouraged lenders to open when it is operationally possible for them to do so. Indeed, nine lenders have managed to open to new customers for a period, and two are currently open, although for limited services. Their efforts, combined with the fact that accredited lenders account for a very high proportion of business in personal current accounts, mean that the vast majority of businesses should be able to get a bounce back loan through their existing relationship. Following the decision by the Chancellor to extend the scheme to 31 January, there are now two and a half months left to apply for a loan, after which we will be introducing a new guarantee scheme.

This weekend, we will mark Small Business Saturday, when we all have the opportunity to praise the work of the fantastic small businesses that contribute so much to our local economies and have been through a tough time this year. Bounce back loans have helped small businesses, but because of the ongoing pandemic, they have, by definition, also left some businesses with debts that they may not be able to pay. What is the Government’s estimate of the likely rate of default on bounce back loans, and what further support can the Government give to small businesses whose trading conditions will continue to be severely impaired for months to come?

The right hon. Gentleman rightly praises the work of small businesses up and down the country, and I echo his sentiments. He asks about the provision we have made for the future of bounce back loans. Those who have taken out the loans will not be starting to repay, because there is an interest-free period until May next year. Indeed, we have decided to extend the time to pay for up to 10 years. Clearly, we keep these matters under review and are very sensitised to the burdens that small businesses face. That is why, as the Chancellor said earlier, we have introduced a number of measures in addition to the bounce back loans to support small businesses at this time.

The Minister talked about the default issues on the loans but also about extended payback. Has he or the Treasury done a calculation about whether that will reduce the up to 80% expected potential for default on the payback of these loans, which obviously businesses need but will hit taxpayers very dearly?

There have been a range of estimates due to the considerable challenges in verifying data. What I would say is that our priority has been to protect as many businesses and jobs throughout with this intervention. We have always considered the fraud risks and the need to maintain a sense that the loans need to be paid back, but the Cabinet Office and the British Business Bank are continuing to work on that mitigation strategy, where we have a mandatory system to detect multiple applications. The default risk is an evolving picture that we will keep very close to.

Aviation Sector: Financial Support

What recent financial support his Department has provided to the aviation sector; and if he will make a statement. (909589)

It is great to see you in the Chair, Mr Speaker. I thank my right hon. Friend for his very constructive engagement with the Government on this important issue. The Government have recently announced, as he will be aware, a package of financial support for English airports and ground handlers. This support, which will shore up jobs and reinforce local economies, will be equivalent to the business rates liabilities of each business up to a maximum of £8 million per site. It has been warmly welcomed by the Airport Operators Association.

I thank the Minister for that additional support for regional airports, which is very welcome, but the steps taken by the Government generally to move a small distance towards reopening the aviation sector last week go nowhere near what is needed. We face a situation in January when the Brexit transition period will be open, but our principal airports and our principal aviation links to key business centres around the world will effectively still be closed. I urge the Chancellor and the Minister to use every influence they have in government to get that dealt with and at least to get airport testing and what is necessary available on those key strategic routes.

My right hon. Friend is absolutely right to focus on testing. As he will be aware, the “test to release” regime combines a much shorter self-isolation period with a real focus on public health. As he will also know from the global travel taskforce report, we as a country are continuing to explore pre-departure testing with partner countries on a bilateral basis, including different models by which that might be delivered.

Covid-19: Public Finances

The economic impacts of coronavirus and the substantial fiscal support provided have meant a necessary increase in our deficit and debt levels this year. That is the right thing to do to combat the pandemic, but once the economic recovery begins and uncertainty recedes, we will return our public finances to a sustainable and strong position.

There are reports that the Treasury has created an economic impact analysis, providing significant detail on the effect of coronavirus across the various sectors of the economy. For each sector, this analysis allocates red, amber and green ratings for revenue, jobs and financial stability. Given the vote tonight, may I ask my right hon. Friend why that analysis has not been published?

My right hon. Friend will have seen the analysis we did publish, which talked specifically about sectoral impact. In the document, there were specific links to the various places that people can find GVA and employment by sector and, indeed, the financial resilience of local businesses at some stages by sector and by region. It is that analysis, as we have said, that will determine the particular economic impact in an area. That information is all provided in the report for people to look at.

Self-Employed People: Covid-19 Support

What steps his Department is taking to support self-employed people affected by the covid-19 outbreak. (909593)

What steps his Department is taking to support self-employed people affected by the covid-19 outbreak. (909604)

As my hon. Friend the Member for Kensington (Felicity Buchan) will be aware, the Government have taken unprecedented steps to support the self-employed during this crisis, and that includes through the self-employment income support scheme, which has been extended up to April, with details of the third grant published last week.

Many self-employed people are at the forefront of innovation and start-ups. Can my right hon. Friend tell me what the Treasury is doing to support innovation as we look to rebuild our economy?

My hon. Friend is absolutely right about the importance of innovation. She will be delighted to know that the Government are protecting innovators and start-ups from the impact of covid through almost £900 million of future fund loans to date, £79 million for innovation loans as well as other grants, and that comes on top of more than £5 billion of support through research and development tax credits claimed for 2018-19 so far, which support more than £35 billion of R&D expenditure.

I thank my right hon. Friend for all he has done so far to support the self-employed, but will he keep an open mind when it comes to future support? As he will be aware, millions have benefited from the schemes he has introduced, but there is a minority who have not. As the pandemic is lasting longer than we had imagined, will he look again at what else can be done for those who have had no income for nine months?

I should make it perfectly clear to my hon. Friend, as the Chancellor has, that we take these points extremely seriously. We have been given many different suggestions over the past few months for ways in which we could accommodate these concerns. We have looked at them very closely, and so far we have struggled to find one that meets the need to avoid the fraud risk that bedevils this concern. I responded last week to the latest request to meet from the Federation of Small Businesses, the Association of Chartered Certified Accountants and Forgotten Ltd to explore the latest of these schemes. I have also said that I would be happy to meet the all-party parliamentary group, alongside ExcludedUK, to address these questions.

When will the recently announced increase in the coronavirus business interruption loan scheme term from six to 10 years come into effect? That is of particular importance to businesses that have been hard hit by the crisis, such as the wedding venue and hospitality sectors in Clwyd South and elsewhere in the UK.

We of course recognise the concerns that my hon. Friend raises. We should be clear that the purpose of this extension is not simply to allow borrowers to request a 10-year term. It is that the guarantee offered by the Government on these schemes should be extended up to 10 years where lenders deem that a forbearance tool that borrowers may need and benefit from. My colleagues are working at pace with the British Business Bank to implement the policy in line with state aid rules.

Does my right hon. Friend accept that self-employed people and freelancers—many of whom are formed as limited companies, not because they choose to but because they are required to do so by the agencies or contractors they work for or by insurers—continue to fall through the net? Would it not be a good idea for him to meet directly some of those who work in these sectors? I suspect that many of those who advise him in the Treasury have no understanding of how self-employment actually works.

As my hon. Friend will be aware, I have a history of being closely involved with the performing arts sector. As I have indicated, I will be meeting many of the groups representing people in this situation. He should be aware that, in addition to the £1.57 billion culture recovery fund, the Government have put in place the film and TV insurance scheme, to which more than 150 applications have been made so far. The Government do and continue to take these issues extremely seriously.

The situation for the self-employed is especially difficult in areas with additional restrictions and for those working in the hardest hit sectors. The Government’s additional restrictions grant must go further in areas that have been in restrictions for longer. What plans do the Government have to improve this situation?

The hon. Lady will be aware that we have backdated business grants to address some of these concerns. It is also worth mentioning that the third phase alone of the self-employed scheme is expected to cost more than £7 billion. As the Chancellor said, it is part of a wider package of support that we are trying to give to businesses and individuals affected by the crisis.

Hydrogen Technology: Fiscal Support

What fiscal steps he is taking to support investment in (a) hydrogen fuel cell usage in the automotive industry and (b) the UK’s hydrogen economy; and if he will make a statement. (909594)

The Government are supporting the development of the early fuel cell electric vehicle market through the £23 million hydrogen for transport programme. The spending review confirmed an automotive transformation fund to help industry transition to low-carbon vehicles. At the spending review, the Chancellor also announced £240 million over the next four years to support the aim of 5 GW of low-carbon hydrogen by 2030.

I thank my hon. Friend for her answer. The West Midlands Rail Executive and I are both very keen to re-establish passenger traffic on the Lichfield to Burton railway line, which currently is used just for freight traffic—it would stop, too, at the National Memorial Arboretum. The plan is that the locomotives will be powered by hydrogen fuel cells. Does my hon. Friend not agree with me that the levelling up fund would be ideal for that project?

My hon. Friend is, as ever, a great champion for his local area. I understand that Transport for West Midlands, in partnership with Staffordshire Council and the local rail executive, has already engaged with the Restoring Your Railway fund. Regarding the specific proposal he is referencing, the Department for Transport has announced that there will be a further round of bidding for the fund. Other aspects of the proposal might be eligible for support from the £4 billion levelling- up fund; the Government will set out more details on eligibility in due course.

Disguised Remuneration Schemes: HMRC Contractors

Her Majesty’s Revenue and Customs are aware of 15 contractors who have used disguised remuneration schemes while engaged either by the department or by Revenue and Customs Digital Technology Services. In each of the cases, the contractors were engaged via an agency or a company providing this service. It is important to be clear that Revenue and Customs does not engage in or enter into disguised remuneration schemes. It is possible for a contractor providing services to HMRC to use a disguised scheme without the department’s knowledge or by participation through a third party.

I am amazed at the Minister’s answer—that firms can use methods of payment that HMRC then declares to be illegal and that no checks have been done by HMRC on those contractors. Does he not accept that it is unfair to put the burden on taxpayers who first of all entered into payments through disguised remuneration because we were forced to do so, and who declared that on tax returns which HMRC did not challenge, yet HMRC is now telling us that it did not even check that contractors it employed were paying in that way? How many of these contractors have HMRC actually pursued for forcing employees to use schemes that have been deemed illegal?

I think the right hon. Gentleman is slightly unclear on this. HMRC takes careful steps to ensure that the people whom it deals with as agencies employ on a proper and appropriate basis. When, in very rare cases among hundreds and hundreds of contractors in a fast-moving market, it may become clear that someone has in fact been hired under such a scheme, it takes immediate steps to end that relationship and then to follow up, of course, and to pursue as may be required under law. If he is concerned about the interests of taxpayers, may I remind him that many of the people who benefit from disguised remuneration have not been paying tax, from which our public services benefit, and it is those taxpayers whose interests we are also seeking to protect.

Loan Charge: Support

Revenue and Customs has been clear on its commitment to support all taxpayers who might need help paying their loan charge liabilities. Where someone cannot afford to pay in full on time, it will seek to agree payment by instalments. Revenue and Customs has a dedicated helpline for those seeking to leave avoidance schemes, and the disguised remuneration and debt management teams are trained to identify taxpayers who may need extra help and support, and to refer them, if necessary, to outside organisations for support.

As my right hon. Friend rightly recognises, there are a number of people who cannot pay the amount either in full at the beginning or in instalments. Given that HMRC has now recognised that many of these people were victims of mis-selling, is it not time to have another review of the people who have been mis-sold these schemes, and would it not be right and appropriate for those who mis-sold the schemes to make some contribution to those demands?

As my hon. Friend will be aware, a long and detailed review process has been conducted by Sir Amyas Morse. It is, of course, the individual’s responsibility to ensure the accuracy of their tax returns and to understand the consequences of their decisions, although of course the Government very much sympathise with people who have been caught in that position. My hon. Friend may have noticed that we have been taking very vigorous action against promoters of tax avoidance schemes—most recently, in an announcement we made last week, HMRC and the Advertising Standards Authority are getting together to crack down on misleading promoting of tax avoidance schemes.

Following the loan charge review, the Government promised in March that this year would bring both legislation and the announcement of additional policy measures against those who promote tax avoidance schemes. As neither has happened, will the Minister confirm when the promised changes will become law?

Support for Businesses: Covid-19

What fiscal steps his Department is taking to support businesses affected by the covid-19 outbreak. (909598)

The Government recognise the extreme disruption that the pandemic has caused to business, employment and the nation’s economy, and our goal remains to protect people’s jobs and livelihoods. That is why we have provided one of the most comprehensive and generous packages of support, worth £280 billion.

I commend the Treasury on what it is doing at the moment to support businesses across the UK. Is the Treasury willing to extend the VAT cut to the hospitality, leisure and personal care sectors, and will it perhaps encourage businesses to pass on that VAT saving to consumers?

The temporary reduced rate of VAT was introduced on 15 July to support the cash flow and viability of more than 150,000 businesses and protect 2.4 million jobs in the hospitality and tourism sectors, and it will run now until 31 March next year. This obviously comes at a considerable cost to the Exchequer, and while we keep all taxes under review, there are no plans to extend it further. Although the Government want businesses to pass on the benefit to customers if they can, obviously decisions on prices are ultimately for businesses rather than the Government.

Legacy Benefits: Universal Credit

What assessment he has made of the economic effect of increasing legacy benefits by £20 per week in line with the recent increase to the standard universal credit allowance. (909599)

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

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

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

Support for People on Low Incomes: Covid-19

The Government’s approach throughout the pandemic has been to try to support all families, but especially those on low incomes. We have announced a £30 billion plan for jobs to help people back into work, alongside wider measures including the furlough schemes, plus catch-up funding for schools and a substantial increase to the welfare safety net for this year, but it is important to say too that the Government are also supporting the lowest paid by increasing the national living wage to £8.91 and providing a minimum £250 pay increase for public sector workers earning less than £24,000 a year.

I welcome the national living wage and minimum wage rates going up in April despite the difficult economic backdrop. Does my right hon. Friend agree, however, that what happens to people on low incomes is not just about what Government do? It is also about what employers do, and we need them to provide good work with the right number of hours and the right skills and progression strategies, because that is what will help people on low incomes to earn more.

I certainly agree with my hon. Friend that it is important to focus on skills, and of course that is what the plan for jobs does. Our goal is to try to make sure that everyone, at whatever stage of life, has the opportunity and encouragement to improve their position in employment, and of course we also want employers to support them in doing that. It is well known that supportive and encouraging employers ultimately have more productive workforces because of the extra engagement they get. That is why the Department for Work and Pensions launched the in-work progression commission in order to try to understand better what those barriers to advancement might be and how they can be overcome both by the support of Government and by changes to the way in which employers develop and encourage staff.

In addition to the extra support provided during this pandemic, as my right hon. Friend has already said, the introduction of a national living wage and changes to the tax system have ensured that the lowest paid are up to £6,000 per year better off under this Government. Does he agree that protecting those people who are in work but on low incomes must remain an absolute priority for this Government when difficult decisions have to be made at the Budget?

We certainly, of course, share the view that it is important—very important—to protect the low-paid. The purpose of supporting them through the national living wage was precisely in order to raise their incomes, and that increase is worth some £345 a year for a full-time worker. However, it is also important to say that the Government remain fully committed to their longer-term target for the national living wage, which will make an enormous contribution itself towards ending low pay in the UK, and that is before, as I have mentioned, the support we are giving to 2.1 million public sector workers earning less than £24,000 a year.

Loan Charge: HMRC Settlement

How many and what proportion of people who have had settlement discussions with HMRC on the loan charge have reached a settlement. (909601)

About 11,000 employers and individuals settled their use of disguised remuneration schemes between Budget 2016 and 31 March 2020. As I indicated earlier, HMRC is currently preparing a report to Parliament on the implementation of the recommendations of the independent loan charge review, and that is due imminently. The report will include figures up to the 30 September 2020 deadline for taxpayers who settled their use of disguised remuneration tax avoidance schemes.

I thank my right hon. Friend for his answer. In circumstances where process failings, errors and delays on the part of HMRC effectively denied people the possibility of settling their claims by 30 September, will he commit to offering an extended settlement period to allow individuals the chance to settle their debts?

As my hon. Friend will know, the settlement date has already been extended by eight months. That was a very important recognition of the impact of covid and has given individuals the chance to settle their schemes. He should also be aware that we do not merely seek to support those who are settling; we are also taking robust action against promoters and other enablers of tax avoidance schemes.

Net Zero Carbon Economy

What steps he is taking to ensure that his fiscal policy incentivises environmentally positive behaviour. (909607)

The Chancellor’s announcement at the spending review will help us meet our net zero 2050 target by providing the right incentives for individuals and businesses. The spending review commits £12 billion of public investment, kick-starting our transition to net zero and boosting the UK’s global leadership on green infrastructure and technologies ahead of COP26 next year. It also included funding that will encourage protection of the natural environment, including for planting trees, restoring peatland, creating natural habitats and investing in national parks.

A robust carbon price is essential to achieving a net zero carbon economy, yet despite the transition period ending in just 30 days’ time, companies still have no precise idea what will replace the EU emissions trading system, which the UK will cease to participate in at that point. The House has already passed the legislation required to establish a stand-alone UK ETS, but there is no sign of the order necessary to fully implement a UK-wide carbon tax. With just 12 sitting days remaining, can the Minister confirm that the Government have determined that a stand-alone UK ETS is the fall-back option for 1 January and that the Treasury has abandoned a carbon emissions tax?

The hon. Gentleman will know that this has been the subject of negotiations, which are still ongoing. We legislated for a UK-linked ETS as well as a carbon emissions tax, and we will be announcing shortly which of those options we will be taking. We know that a UK-linked ETS is the preferred option at the moment, and that is the one that we are currently hoping we will be able to negotiate for during this period.

Everyone in the House knows that the Chancellor of Exchequer does not like green waffle, so may I challenge the Front-Bench team to stop the rhetoric and start producing policies? We already have an Agriculture Act that says we should have public money for public good; what about public money for environmental good? Let us have the taxation—the systems—that they have already introduced in the Nordic countries, but for goodness’ sake let us get on with it.

The hon. Gentleman asks an interesting question and I believe we are getting on with it. The Prime Minister’s 10-point plan, announced just two weeks ago, outlines quite a lot of that. If the hon. Gentleman is talking about the costs, he should look at the announcement we made about the net zero interim review, which will be coming out before the end of the year. That will look at the options for a balance of contributions between households, businesses and the taxpayer, and how to maximise economic growth opportunities from the transition to net zero.

Topical Questions

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.