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Topical Questions

Volume 690: debated on Tuesday 9 March 2021

Last week I presented to the House a Budget to protect the jobs and livelihoods of the British people, confirming more than £400 billion of support over this year and next, ranking as one of the most comprehensive responses of any country anywhere in the world. We also set out a fair and honest plan to begin fixing our public finances while also starting the work of building our future economy.

How are the crucial EU negotiations on the memorandum of understanding on financial services progressing? Given its importance to the UK economy—by comparison, for example, with fishing—why was it not included in the overall deal?

I cannot comment on ongoing negotiations; we remain committed to a constructive dialogue with our European partners regarding the memorandum of understanding, and I can confirm that those discussions are under way. With regard to financial services, I hope that the right hon. Gentleman saw the announcement of our listings review. I thank Jonathan Hill for his excellent work. We will take forward those reforms together with the Financial Conduct Authority to ensure that the UK remains one of the most attractive places anywhere in the world for companies to raise the finance they need to empower their future growth.

The food and drink wholesalers on whom the hospitality industry depends are still excluded from business rates relief, and the additional restriction grants—which do help some of them substantially—are awarded entirely at the discretion of individual local authorities. Can that particular postcode lottery be replaced by a directive to ensure much greater consistency in awarding these vital grants? (913126)

My right hon. Friend has raised this industry with me multiple times, and he is right to do so. Although some food and drink wholesalers have been significantly impacted, others—for example, those that predominately serve the public sector—have not been, so I do not think it would be fair to provide blanket support. He talked about a postcode lottery. The other side of that coin is empowering local government and local decision making, and I believe that is the right approach. We have announced £425 million of additional discretionary support to local authorities, but I am sure that his raising the issue in the House in this way will give his local council and others the steer they need to direct support to this important industry.

In 2017 the Chancellor asked a Member of this House whether Labour’s proposed increase in corporation tax

“would make it more or less likely that international investors would want to invest here in the UK?”—[Official Report, 12 September 2017; Vol. 628, c. 218WH.]

What’s the answer, Chancellor?

I am delighted that the hon. Lady is raising the topic of corporation tax at this Budget. I feel that we have had various different versions of the Labour party policy on this topic over the past couple of weeks. What I can say is that we are honest with the British people about the challenges facing our public finances, and we have set out a fair and honest way to address those challenges. This will remain one of the most internationally competitive places anywhere in the world to invest, to grow a business and to create jobs, and this Government will always deliver on that promise.

Last week, the Chancellor said he wanted to “level with” the public. He mentioned a moment ago that he wanted to take an honest approach. Well, the head of the NHS just confirmed that he budgeted for the 2.1% pay rise that nurses expected, so we need a straight answer now from the Chancellor: why do the Conservatives believe that our nurses are worth less now than they were before the pandemic?

I pay tribute to all those working on the frontline of our NHS and other public services. They are doing a fantastic job, and that is why this Government have supported the NHS with tens of billions of pounds of extra funding through this pandemic and will continue to do so. With regard to public sector pay, we set out a policy in November, but, given the situation, we were taking a more targeted approach to public sector pay to balance fairness and to protect as many jobs as possible. The hon. Lady will know that the NHS was exempted from that policy and NHS workers will receive a pay rise next year.

This morning I spoke to a roundtable of businesses from across the country, and there was much positivity for the restart grant and the business rates holiday, which will help to open up our high streets. However, many of the businesses I speak to still speak of the need for long-term reform of the business rates system, so will my right hon. Friend update the House on the outcome of the consultation that was carried out last year and what the long-term aspiration for business rates reform is? (913127)

My hon. Friend is right to raise this important issue, as he has done with me several times on behalf of his local businesses. He is right that we are reviewing business rates. We are in the midst of that process. The next stage will be to publish all the consultation responses that we have received, which will happen shortly, and we will take forward the policy process over the course of this year. We outlined many options for potential reforms in the paper. I look forward to receiving from him some ideas on what the reforms might be. In the short term, we are providing a £6 billion tax cut in business rates, delivering a 75% discount on business rates for the vast majority of small and medium-sized businesses as they emerge from this pandemic.

Every year of delay in integrated rail improvements in the midlands and the north means a missed £5 billion boost for our economy as well as delaying an additional 150,000 jobs. The Chancellor’s Build Back Better plan promises the long-awaited integrated rail plan within three months. Will he confirm that this is an absolute maximum, and will he or one of his Ministers meet me and regional businesses to hear more about our exciting plans for our community? (913125)

This Government are committed to record amounts of investment in infrastructure, both road and rail, as we heard from my right hon. Friend the Financial Secretary earlier. The Budget announced upgrades for several stations in and around the midlands after representations that we heard from the fantastic Mayor, Andy Street, about the needs of his area. We remain committed to publishing the integrated rail plan in due course.

My right hon. Friend has rightly been open with the House and the public about the scale of the challenge to the public finances, but on a point of detail, further to the assumptions in the Red Book, does his Department plan to undertake dynamic scoring of the changes to corporation akin to the previous detailed CGE—computable general equilibrium —modelling since 2010, and will this be published in full? (913128)

What a fantastically niche question from my hon. Friend, and how delighted I am to be able to answer it. He will know that scoring is a matter for the OBR. As the Budget policy costings in the Budget 2021 document set out, the costing for corporation tax has been adjusted to reflect behavioural responses to an increase in the rate of corporation tax. It is important to be clear that dynamic scoring can include a number of potential behavioural responses, such as adjustments to reflect the impact on the incentive to incorporate, on profit shifting, and on investment. If he is so minded, he can find further detail on page 196 of the OBR’s “Economic and fiscal outlook”.

As some students return to campus this week, those studying in Northern Ireland will each receive £500 support. The Welsh Government have provided hardship funding equivalent to £300 per student. In Scotland, it is £80. For those studying in England, hardship funds equate to just £36, so does the Chancellor not accept the case for equal support across the UK? Students have lost vital income from part-time jobs, paid rent on unused accommodation and faced other costs, so will he meet the all-party parliamentary group for students to discuss our recommendations for hardship support and funding to make up for missed learning opportunities? (913130)

I am always happy to meet the hon. Gentleman and discuss that matter in more detail. As he will recognise, one of the features of the Budget was the number of UK-wide measures, but at the same time he is quite right to point to the additional £2.4 billion of Barnett consequential funding that was allocated to the devolved Administrations, which has enabled them to apply further support as a result of the fiscal strength that is offered by the UK Treasury. I am of course happy to discuss the specific point with him in more detail.

My right hon. Friend the Chancellor said the day after the comprehensive spending review that the Government were looking at when they will bring forward legislation on the 0.7% of gross national income target. Can he update us? What is the Government’s timescale for bringing forward the legislative proposals to reduce the annual target of spending 0.7% of GNI on aid to 0.5%? (913129)

The Foreign Secretary is continuing to look very carefully at the legislative requirements and will set out further detail in due course on how the Government intend to proceed.

If the Government are unwilling to support the licensed trade through varying duty rates, there is another fiscal policy to sustain hard-pressed pubs in our communities. Italy has reduced VAT and alcohol sales in pubs and restaurants. Should that not be replicated here, sustaining public revenue while supporting the consumption of alcohol on supervised premises and maintaining community assets in our towns and villages? (913131)

The hon. Gentleman will know we are carrying out an alcohol duty review that will look at all these decisions in the round, and I am very happy to speak to him in more detail specifically about any particular schemes or requests that he has.

If every working adult in Wolverhampton spent £5 a week extra with local businesses such as Mode Menswear and Tony’s Deli, it would boost the local economy by around £780,000 a week. What is the Chancellor doing to ensure that local independent shops and city centre businesses can bounce back from covid-19 in Wolverhampton? (913132)

The Government are supporting these businesses through new restart grants—a one-off cash grant of up to £6,000 per business premises for non-essential retailers in England—and up to £18,000 for hospitality and leisure businesses. They will also benefit from a five-month extension of the coronavirus job retention scheme, a further 12 months’ relief from business rates and a new UK-wide recovery loan scheme. Tony’s Deli, which my hon. Friend mentioned, and other businesses serving hot food can also enjoy a 12-month VAT cut at 5% until the end of September, and at 12.5% until the end of March.

Earlier this week, there was an attempt by the Health Secretary to justify the incredibly insulting 1% pay offer to our nurses by contrasting it with the Government-imposed pay freeze on our heroic essential key workers. That is a pay freeze on 2.5 million public servants. Can the Chancellor confirm when he will recognise their worth, do the right thing and announce the lifting of the pay freeze? (913133)

A majority of those working in the public sector will see an increase in their pay this forthcoming year as a result of our pay policy. Importantly, those earning less than the median UK salary will receive a £250 increase in their pay, because we want to protect those on the lowest incomes. Even at a difficult time, that is what this Government are committed to doing.

Treasury Ministers are no doubt aware of my support for a brand-new university for Milton Keynes, focused on science, technology, engineering and mathematics and digital skills, so vital for our future economy. I wonder, though, whether they are aware that we are already home to the Open University, which is a pioneer of modular learning and is upskilling and reskilling—important for our future economy. The Budget last week announced support for further education and skills. Will that apply to institutions like the Open University? (913135)

We are committed to improving skills in the economy and levelling up productivity across England. That will be achieved through our lifetime skills guarantee and further reforms, which will create jobs and opportunity across the country, supporting us to build back better from the coronavirus pandemic. We will provide further detail and a full conclusion to the review of post-18 education and funding at the next comprehensive spending review. I thank my hon. Friend and the Open University for their engagement on this so far.

The disgraceful 1% pay rise for NHS workers is really a pay cut when inflation is factored in. The Prime Minister claims that it is all we can afford. The Government had no problem finding £37 billion for the private test and trace system, an extra £16 billion for the military budget, or hundreds of millions of pounds in dodgy covid contracts for the Health Secretary’s WhatsApp contacts. NHS workers have seen their pay fall by more than 10% in real terms in the past decade, so instead of handing out fortunes to mates and donors, will the Chancellor heed the calls of trade unions and NHS staff and give them the pay rise that they deserve, which is 15% to make up for a decade of lost pay? (913134)

With respect, the hon. Lady is simply wrong on the facts with her question. Under the Agenda for Change three-year award, the average increase this year was 2.5%, not the figure she alluded to. But of course, the Government have asked the pay review body to consider a number of factors and, as is normal practice, the Department of Health and Social Care has set out what is affordable within its budgets.

The Government recently confirmed the first eight sites to be awarded freeport status. That will provide great opportunities for prosperity in those areas. In my home constituency of Blyth Valley we have the only deep-water port in Northumberland, with investments in offshore wind, such as at the Catapult, as well as Britishvolt with the only gigaplant in the UK. What assessment has my hon. Friend made of granting a second round of bidding for areas such as Blyth that were not successful on this occasion? (913136)

Freeports will be national hubs for international trade, innovation and commerce and they will regenerate communities across the UK. The Ministry for Housing, Communities and Local Government led a fair, open and transparent selection process to determine successful freeport locations in England. Unfortunately, as with any competitive process, there will always be those that are unsuccessful, and I am afraid there are no plans to designate other freeports in England. Freeports are part of a wider package of UK Government support, which invests in skills, infrastructure and innovation at local, regional and national levels. As part of that package, Blyth was awarded £11 million through the future high streets fund in December and is also one of 101 towns eligible for up to £25 million funding from the towns fund.

With Doncaster missing out on its freeport bid, what other incentives does my hon. Friend believe there are for businesses to locate in the town? (913140)

The Government are committed to encouraging business investment in Doncaster and its surrounding area, and at the Budget we confirmed £23 million funding for Goldthorpe’s town deal—just due west of the town—and that will boost economic growth and encourage business investment in the area. MHCLG is currently assessing the remaining 49 towns fund bids, including those from Doncaster and Stainforth; we will make further announcements on those in due course.

I am suspending the House for a few minutes to enable the necessary arrangements for the next business to be made.

Sitting suspended.