The Chancellor of the Exchequer was asked—
Loan Charge: Bankruptcy
Good morning to you, Mr Speaker. It is great to be in a Chamber that is 100% full strength after so many months. If I may make a personal note without undue deference, Mr Speaker, I will say that I thoroughly appreciated your remarks about standards within the Chamber.
To date, Her Majesty’s Revenue and Customs has not initiated insolvency proceedings against any taxpayer for a loan charge debt. No estimate can be provided for the number of people who have fallen into debt or who have been declared bankrupt and are subject to the loan charge because, where debts arise, HMRC is not always the only creditor. Some individuals are declared bankrupt as a result of a non-HMRC debt and some may choose to enter insolvency themselves based on their overall financial position.
We know that there are many, many thousands of nurses, social workers and other public sector workers who have been caught up in the loan charge. They took work via agencies that basically told them, “Sign here or you don’t get the work.” Checking to see whether they would be liable for the loan charge was not an option. Last week, the Yorkshire Post reported that a number of former services personnel had been affected and that one is feeling suicidal as a direct result. What does the Minister say to this veteran and the thousands of other public servants whose lives have been turned upside down by this retrospective taxation?
I thank the hon. Lady for her question. Taxation is often a difficult matter for the relatively small number of individuals who may be affected by particular pressures. Of course the Government recognise and understand that, but it is nevertheless the case—it is indeed a foundational principle of the tax system—that people should be responsible for their own tax returns. If I may, I would like to refer the hon. Lady to the very wise words of the former shadow Chancellor, the hon. Member for Oxford East (Anneliese Dodds), who said in 2018 that
“we would obviously welcome tightening in the area of disguised remuneration schemes…We are concerned that the measures in the Bill do not go far enough…There should be no excuse”—
these are her words—
“for people not to be aware of the situation”.––[Official Report, Finance (No. 2) Public Bill Committee, 9 January 2018; c. 30.]
I am afraid that she was right about that.
The Conservative Government’s approach to the loan charge means that ordinary people who are victims of mis-selling are suffering financial ruin and personal harm. Ministers will have heard some harrowing accounts of people pushed to the very brink and worse, some even tragically taking their own lives. This cannot be what the Government envisaged and a new approach is urgently needed. Will the Treasury now review the loan charge scheme and the approach of HMRC to prevent further devastating consequences?
As I have said, both the Government and Her Majesty’s Revenue and Customs take these cases extremely seriously, which is why HMRC has put in place extra care and support for people who may be affected by tax issues of this and other kinds. The fact remains that we have had a review. I might refer the hon. Gentleman to the words of his colleague, the hon. Member for Ilford North (Wes Streeting), who said of Sir Amyas Morse who did the review that it was
“a thorough piece of work…we thank him…He has done a great service to Parliament and to the wider public debate.––[Official Report, Finance Public Bill Committee, 4 June 2020; c. 33.]
He was right about that and the Labour party has been right not to have opposed this policy at any point during its passage through Parliament.
The problem that Members have on both sides of this House is that ordinary people were duped into something and it has effectively become a retrospective piece of legislation. I thought the way that the shadow Minister, the hon. Member for Ealing North (James Murray), approached this was very reasonable. HMRC is not taking the right approach. Perhaps the Government could look at that again.
I thank my hon. Friend for his question. I have mentioned the extra care and support that HMRC has put in place. I have mentioned the extremely careful approach that it has taken with people who may be facing the loan charge. As he will be aware, it has not initiated insolvency proceedings against any taxpayer for a loan charge debt and that in itself is emblematic of the care and attention that it is taking with this subject.
It is not enough for the Minister to say that people had to take responsibility for their own tax affairs when the information that they were given by HMRC was that there was nothing wrong with these schemes initially, when HMRC passed and signed off tax years for people, and when the head of HMRC has admitted that, in recent months, he had repeatedly tried—this was the outcome of a freedom of information request—to obtain legal analysis to understand the strength of a claim with “very little success”. There is not even a legal standing for this. How then can the Minister say that it is right to pursue people for things that they were led into, and, indeed, for payments that HMRC was regularising by allowing contractors to use as a means of paying their employees?
The right hon. Gentleman raises a whole bunch of questions. Let me address them. There were some contractors working through agencies for HMRC. Where it was discovered that they had used disguised remuneration, those relationships were ended and strong measures have been put in place to prevent recurrence. That is an unfortunate feature of the extended way in which these contract arrangements sometimes work. I do not think that there is any evidence that HMRC has signed off or positively approved the use of any disguised remuneration scheme. If the right hon. Gentleman has an example, he is welcome to send it to me. The right hon. Gentleman will be aware that the chief executive of HMRC has specifically written to the loan charge and taxpayer fairness all-party parliamentary group to make it perfectly clear that it has taken those remarks out of context and that what he was doing—as every chief executive of a public agency should do—was putting his own officials under some pressure to provide the justification needed, and rightly so.
Her Majesty’s Treasury analysis published alongside Budget ’21 has shown that policy interventions in response to covid-19 have, on average, supported the poorest working households most as a proportion of pre-pandemic income.
The Government’s plan to increase national insurance will clearly unfairly impact the living standards of young people and the low paid. That is in stark contrast to the Scottish Government’s free education, bus travel for under-25s and the Scottish child payment. Will the right hon. Gentleman confirm how many Ministers spoke against this move at Cabinet today and whether this included the Scottish Secretary?
I would have thought that, having sought additional powers, the hon. Gentleman would be more interested in reminding the House how his own Government are using the powers that they have. The key issue is that in many areas they are choosing not to use their tax powers—for example, to top up universal credit. He should focus on the alliance that his party has formed with the Greens, which is bad for business, bad for the economy, bad for the oil and gas industry, and counterproductive to growth.
In 2016, the Tories promised that fuel bills would be lower for everyone on leaving the EU. The reality is that fuel bills are increasing while they make the heartless cut to universal credit. In order to tackle fuel poverty, will the Minister use the net zero review to cut VAT on energy efficiency products, keep new nuclear off electricity bills, provide direct funding for heat decarbonisation and sort out the unfair grid charges on Scottish renewables?
Well, I think we should look at what my right hon. Friend the Chancellor has done. I touched a moment ago on how the covid measures have protected the poorest working households the most. Alongside that, the Budget measures on tax, welfare and spending decisions made since 2019 have, on average, benefited all households this year, with the poorest gaining the most as a percentage of net income. That is the approach that my right hon. Friend the Chancellor has taken and it is one that the Scottish Government should follow.
According to Save the Children, more than 3 million children living in low-income households across the United Kingdom are likely to be affected by the £20 universal credit cut, with half of claimants saying that they will face significant financial impacts as a result and one in seven worrying about affording food. The Joseph Rowntree Foundation says that the cut will push 500,000 people below the poverty line. Will the Minister explain how this squares with the Government’s so-called levelling-up agenda?
A key way to tackle poverty is to get people into work and then skill them up in their jobs. That is what we have set out through the plan for jobs, and that plan is working. Ultimately, if that is the priority of the Scottish Government, why are they not using the powers they have to prioritise it?
Does my right hon. Friend agree that it is difficult to justify raising national insurance to fund social care for the predominantly elderly, when the impact of that tax rise would fall mainly on young people and those who are earning little in the workforce? Does he also recognise that those two groups are the very groups that have been most impacted by the economic consequences of the pandemic?
As my right hon. Friend knows, the Prime Minister will make a statement on this matter shortly, but what he and I would agree on is that the best way is to grow the economy, drive productivity, get people into work and skill them up through work. That is what the plan for jobs is doing, alongside the £600 billion investment in infrastructure over the course of this Parliament as part of levelling up and our commitment to net zero. We need to grow the economy, skill up the workforce and get those who have been impacted by the pandemic back into work as quickly as possible.
I wonder if the Chief Secretary has had the opportunity to read a recent report by the Institute for Fiscal Studies that says:
“Material living standards held up surprisingly well through the pandemic…This is an astonishing outcome given the scale of economic disruption”.
My hon. Friend is absolutely right. The package of measures that my right hon. Friend the Chancellor took improved on the economic scoring that was forecast for the pandemic, including the figure for unemployment, which will now be 2 million lower at its peak than was estimated. That package of measures has helped to prevent many of the worst outcomes that were forecast by the Office for Budget Responsibility as we went into the pandemic.
One group whose living standards have been impacted during the pandemic has been low-income individuals who have used buy now, pay later credit products to buy online. I very much welcome the Government’s announcement in the spring of regulation of this sector. Will the Minister update me on the progress being made in regulating the sector given that it is become of increasing importance, as Citizens Advice reported just last week?
When the Chancellor increased universal credit eighteen months ago, he said that he wanted
“to look back…and remember how we thought first of others and acted with decency.”
Does the Minister consider that taking £20 a week from millions of families across our country is really an act of decency?
I think that £400 billion of support in response to the covid pandemic across our public services and individual businesses shows the scale of measures that the Chancellor has put in place. On the specific issue of universal credit, we were always clear that the uplift was going to be temporary. As it was, my right hon. Friend the Chancellor extended it for a further six months. But ultimately what divides the two sides of the House is that we believe the best approach is to have a plan for jobs, to get people into work, and to upskill them in those jobs. The Opposition simply do not have a plan at all.
Let us think about what £20 a week really means. Twenty pounds a week means being able to afford to buy a coat for your children this winter. It means not having to worry about turning on the heating when the weather turns cold. Can the Minister offer any advice to families who work hard and play by the rules about how they should manage with £100 less each and every month?
As the hon. Lady knows, alongside the universal credit uplift other measures of support were given. Those are not only my words; I quote the Resolution Foundation, which has said:
“Since the crisis hit, the support schemes introduced by the Government have prevented an unprecedented collapse in GDP from turning into a living standards disaster.”
That is the package of measures put forward by the Government. That is how we have protected people’s living standards. The key is to have a plan and to get that plan working; it is, and that is helping people back into work.
My hon. Friend is right to highlight this issue, which he and I have discussed on many occasions. In July I chaired a roundtable on it across Government, and it is prioritised across Departments. We have a manifesto commitment that the Chancellor and I are committed to delivering on. As my hon. Friend knows, we have a £200 million cost to this that we need to tackle. But at the same time we also need to be true to the manifesto, which was not about tackling those on low incomes who had high pay-offs because of the way their pension benefits were structured and those proprietary claims. We need to differentiate between that and the real ill that he is concerned about, which is those on six-figure salaries who are receiving pay-offs. That is something we are prioritising.
It is a slightly odd question, because through the broad shoulders of the United Kingdom, it is Scottish jobs that have been protected through the furlough, it is Scottish businesses that have been supported through the self-employment income support scheme and it is the block grant that has provided additional funding to the Scottish Government. The oddity is that they are choosing not to use those uplifts in the Scottish grant to prioritise the things that they come down to Westminster and say they care about.
It would be good if the Minister answered the question, as well. The Prime Minister’s hike in national insurance has been roundly panned, not least by his own Back Benchers and the Chair of the Treasury Committee, the right hon. Member for Central Devon (Mel Stride). People in Scotland are already feeling the pain of a decade of Tory austerity cuts and the harms caused by Brexit, with the devastation of the £20 a week cut to universal credit still to come, none of which they voted for. Why should my constituents pay for the Prime Minister to break his manifesto pledge with a new poll tax on the poorest who can least afford it?
It may be helpful for me to remind the House of the uplift in funding that the Scottish Government have received as a result of the ability of the UK Government to act across the UK. Baseline funding of £28 billion last year with an additional £8.6 billion of funding—that is £36.6 billion in total—has increased to £40.9 billion this year, so the Scottish Government are getting additional funding. As a result of covid, they have received an additional £14.5 billion, but they are choosing not to prioritise that extra money or to use the additional powers they have on tax or welfare to target the issues they say they care about.
At the beginning of this pandemic, like most people I was really worried that unemployment would rise by millions, and I am delighted that it has peaked 2 million below what most people forecast. Unemployment, at 4.7%, is now at historic lows. Does my right hon. Friend agree that the best way to raise living standards is to get those without jobs into jobs and, for those who already have jobs, to give them the training and skills they need so that they can get higher-paid jobs? That is exactly what the Government are doing.
I very much agree with my hon. Friend. It is as a result of those measures that unemployment has now fallen for six months in a row and that the OBR is forecasting a peak of 5% to 6%, compared with the previous forecast of 12%. As he rightly says, the peak will be 2 million fewer. It is not just about those who are being helped back into work, however; it is also about the programme of apprenticeships, traineeships, jobs support and the doubling of work coaches that will then help people in work to get into the better jobs that they deserve.
Net Zero Emissions and Green Investment
The Prime Minister’s 10-point plan demonstrates our commitment to net zero. It sets out £12 billion of new Government investment in green industries. This will create and support up to 250,000 highly skilled green jobs in the UK. In addition to this £12 billion, our plan will attract up to three times as much private investment by providing regulatory certainty and robust green finance frameworks.
I am afraid I do not think that is what the report has said. What I will say is that we will be releasing many publications this autumn around net zero, not least the net zero review. This final report will be published in advance of COP26. The report will inform sectoral decarbonisation strategies and the net zero strategy, and work on those will continue to develop at pace across Whitehall.
I will ask my counterparts in the Foreign, Commonwealth and Development Office to answer the hon. Lady’s question directly—they are responsible for aid. What I will tell her is that there is a lot of stuff we are doing within our remit on international climate finance action, not least on the taskforce on nature-related financial disclosures.
Time and again, I speak with companies that want a freeport on Anglesey. I want a freeport on Anglesey, and local people want the jobs and local investment that will come with a freeport, but the Welsh Government say and do nothing. Will the Minister please urge the Welsh Government to work with me to deliver this game changer in my constituency of Ynys Môn?
I thank my hon. Friend for her letters and her continued campaigning for her constituency. We are working closely with the Welsh Government and remain committed to establishing at least one freeport in Wales as soon as possible. I encourage them to work closely with constituency MPs on that. As in England, specific locations will be chosen in a fair, open and transparent allocation process.
The Minister must recognise that climate inaction is not just a disaster for the planet but has a huge financial cost and economic consequences. We cannot dodge the critical decisions that we need to decarbonise the economy any more. How exactly will the Government hardwire our net zero targets into every decision in the upcoming spending review?
The Government have used the Green Book to mandate that policies must be developed and assessed against how well they deliver on our long-term policy aims, including net zero. We did that at spending review 2020, where guidance required Departments to include the greenhouse emissions of bids and their impact on meeting carbon budgets and net zero, and allocations to Departments were informed by that information. That is how we will continue to carry out consideration of climate impacts in fiscal policy.
I thank the Minister for her response. With more than £10 trillion of assets under management in the UK, there is scope for more green innovation investment via the venture capital sector. I therefore welcome the measures she explained and the regulatory changes being driven by the Treasury, but will she meet me to discuss a potential office for venture, similar to the new Office for Investment, which could provide a centre for expertise and growth in this area?
I thank my hon. Friend for that question. The Government recognise the important role of financial markets in supporting the UK’s transition to a net zero economy. The British Business Bank is a Government-owned economic development bank that makes finance markets for smaller businesses work more effectively, and its remit includes venture capital. I note her point about a meeting and believe that my hon. Friend the Economic Secretary is happy to meet her on this issue.
It is only 55 days until COP26 in Glasgow and households, consumers and businesses urgently need clarity and certainty about how the costs and benefits of our transition to net zero will be shared. Labour’s approach to tackling the climate crisis would have fairness at its heart, because we know that while some are planning to build personal heated swimming pools in their homes, millions of others are struggling with energy bills. The net zero review is supposed to consider fairness. At the last Treasury questions, the Chancellor told my hon. Friend the Member for Leeds West (Rachel Reeves) that the final report would
“of course be published imminently”—[Official Report, 22 June 2021; Vol. 697, c. 750.]
That was 11 weeks ago. Where is it?
As I said, the report will be published in advance of COP26, but we have published other things that the hon. Member does not seem to have heard of or read. We have set out ambitious plans about the net zero target and published the energy White Paper, the industrial decarbonisation strategy, the transport decarbonisation plan, which has not happened anywhere else in the world—we are the first country to do a transport decarbonisation plan—and a hydrogen strategy. We will publish the heat and building strategy in due course. The Government have been busy setting out plans on net zero, and we would appreciate it if Opposition parties took some time to read them.
We will put affordability and fairness at the heart of our reforms to reach net zero. Our latest estimates put the costs of net zero at under 2% of GDP—broadly similar to when we legislated for it two years ago—with scope for costs of low-carbon technologies to fall faster than expected. Most of those represent increased investment in growth markets of the future. However, I take my hon. Friend’s point. All I would say is that he should wait until the net zero review is published.
The hon. Member for Wycombe (Mr Baker) and I may not have the same views on net zero, but we share a concern about how the Government will fund it. We will see, for example, a reduction in petrol vehicles, so what will happen to the tax on them? We have also seen yet another failure recently with the green homes grant. What is the fiscal plan for making sure that net zero achieves its targets while we maintain the Exchequer balances?
I thank the hon. Lady for that question. We recognise that this is an issue under intense speculation. We will publish a strategy that will set out many of the answers to the questions she is posing. What we have said is that we will put affordability and fairness at the heart of our reforms to reach net zero. The fact is that everyone in this House agreed with us when we set that target. For example, we have put in place plans to bring in electric vehicles by 2030. These will require changes not just in how we spend, but in our tax and regulatory system. The answers will come in due course.
As chair of the all-party parliamentary group on hydrogen, may I take this opportunity to welcome the Government’s world-leading comprehensive hydrogen strategy, backed up by £105 million of public funding to unlock £4 billion of private investment by 2030? Does the Minister agree with me that this is how we will build back better and create more jobs in places such as Teesside?
I thank my hon. Friend for that question. I do agree with him: building back better and building back greener are at the heart of this Government’s strategy. I thank him for raising those points, which will benefit Teesside and the north-east in general.
At the weekend, a young activist called Fatima challenged the Chancellor, asking why the Treasury is blocking action on the climate crisis. He replied that the Treasury has committed £12 billion of new money to the 10-point plan, but even that is not true, as he knows, and the President of COP26 has said that actually only a paltry £4 billion is new money. When will the Treasury start committing serious money to the green transition, in the region of the £85 billion that the TUC has said is necessary to put into green investment so that we go into COP26 as climate leaders, not climate laggards?
I will tell the hon. Lady what the Treasury is doing. We are issuing £15 billion of green bonds over the next year, and launching a world-first green savings bond ahead of COP26 to help finance the Government’s green projects. We set up the UK Infrastructure Bank to invest in net zero, backed by £12 billion of capital, which will also help to unlock more than £40 billion of overall investment in infrastructure. We are committing £11.6 billion in international climate finance over the next five years to help developing countries tackle climate change. The Budget also announced three UK-wide competitions that are part of the £1 billion net zero innovation portfolio. We have the towns deal, which is helping people create new green spaces, build back greener, create sustainable transport routes and repurpose empty shops. The fact is that the Treasury is doing everything it can to support the transition to net zero.
Helping Young People into Work: Covid-19
It is absolutely right that we remain relentlessly focused on helping young people into work, and our plan for jobs does exactly that with a range of initiatives. I would just draw colleagues’ attention to the fantastic youth offer that our jobcentres are rolling out, providing 13 weeks of intensive tailored support for those young people who enter universal credit and creating 140 dedicated youth hubs across the country.
In Bury, Ramsbottom and Tottington, the Government’s plan for jobs is working, saving jobs and getting people back into employment. As chair of the all-party parliamentary group on youth employment, may I ask my right hon. Friend to update the House specifically on how schemes such as kickstart are helping young people with employment and training opportunities throughout the country?
I thank my hon. Friend for all the work he does as chair of the APPG on youth employment, and I thank him and his colleagues for their advice as we have developed these initiatives. He is right to highlight kickstart. This is a signature initiative of this Government, providing Government-funded, high-quality jobs for young people at risk of long-term unemployment. It has got off to a fantastic start, with 50,000 kickstarters already having started and thousands more to come.
That initial response is helpful, and of course I commend the Chancellor and his Treasury colleagues for their financial support to some businesses over the last 18 months, and I realise important announcements from the Treasury and the Prime Minister are imminent. However, in a city such as Lincoln with such a vibrant hospitality sector, the cumulative impact of successive lockdowns has hit my constituents hard, especially young people, and my right hon. Friend knows that they are disproportionately employed in those businesses that are forced to close. Does the Chancellor agree that we must do everything possible to keep the economy open so that instead of paying young people not to work, we focus on creating well-paid jobs for them?
My hon. Friend is absolutely right to highlight the importance of hospitality in employing young people, which is why, together with our VAT cut for that sector and indeed £16 billion of business rates reductions, we have helped support all those jobs. He should also know that employers do not pay employers national insurance on those young people under the age of 21, nor on most apprentices up to the age of 25, demonstrating our support to those employers to keep young people in work.
When I was a very young MP, a Conservative Prime Minister introduced a windfall profit tax on the banks. When will this Administration and this Chancellor of the Exchequer have the imagination and leadership to introduce a windfall profit tax on those who have done very well over the last few years, and put it into green apprenticeships, green training and green skills, and do it now?
Talking about young people and financial services, I was recently in Glasgow talking about young people starting exactly what the hon. Gentleman described: new apprenticeships in the financial services industry, growing in Glasgow, supported by this Government who have put more money behind apprenticeships than any previous Government.
I am hearing from colleges that fewer level 1 and level 2 students are going to college as they are going straight into work and that is to be commended, but we know that having a level 3 increases people’s earnings potential in the long term and therefore opportunities to obtain that level 3 must be available to those young people as they get older. How can they achieve that, however, when the Chancellor has cut the adult skills budget by half since 2010?
I point the hon. Lady to the Prime Minister’s speech on skills last year when he unveiled this Government’s lifetime skills guarantee, which delivers exactly what she is asking for. Those 10 million adults without a level 3 qualification, who she is absolutely right to highlight, will, for the first time, be able to get one, fully funded by this Government. That is a Conservative Government delivering for people, giving them the skills and opportunities they need.
The combination of the furlough scheme, the kickstart scheme and the youth offer the Chancellor has just discussed shows that his efforts are leading to the UK having one of the fastest economic recoveries in the world. Will he commit to working globally to ensure that the confidence and opportunities this brings are available globally as they increasingly are in the UK?
My right hon. Friend is absolutely right, and I want to thank him for two things. First, when he was a Minister he created traineeships, and he will be pleased to know that this Government are tripling the number of them to give young people the best possible start in life, finding new skills and opportunities. Most importantly, this year, because of his success in making sure this country had the fastest roll-out of a vaccine anywhere in the world, we are enjoying the fastest opening up and the fastest economic recovery, and I pay tribute to him for that.
The Government announced the kickstart scheme to much fanfare. However, at the moment they publish the kickstarter statistics breakdown by gender and perhaps by race, but why do they not do so by disability? Will the Chancellor rectify that?
I am always happy to look at what more we can do to improve the transparency of our statistics. However, with regard to kickstart in aggregate, I would just say that there have been 50,000 starts and, when compared with previous versions of similar schemes such as the future jobs fund under the last Labour Government, kickstart is delivering more young people into more jobs at a much faster pace and, importantly, many more of those jobs are in the private sector, not just the public sector.
New Infrastructure Investment
The Prime Minister is rightly ushering in an infrastructure revolution because infrastructure drives growth and productivity and creates jobs. We are doing that with over £100 billion of investment this year and, thanks to the efforts of the Financial Secretary to the Treasury, a world-leading UK Infrastructure Bank created and set up in Leeds.
Does my right hon. Friend agree that all parts of the country can benefit from investment in infrastructure, and that an excellent way of achieving that in my constituency, in support of the substantial housing development there, would be to approve funding for the Aylesbury link of East West Rail, which would also help to achieve our target of net zero?
My hon. Friend is absolutely right to focus on making sure that our investment reaches every part of the country, including his constituency. I am pleased to tell him that £760 million has been allocated by the Chief Secretary and the Transport Secretary to deliver East West Rail, and I understand that the Department for Transport is currently working with the East West Rail Company to figure out the best possible way to serve Aylesbury. I hope that my hon. Friend will engage with that process.
The Infrastructure Forum recently published a report that showed clearly that the super deduction is already having an impact, accelerating investment by businesses. Will my right hon. Friend join me in encouraging businesses across Grantham and Stamford to take up the relief, and does he agree that this is exactly the kind of investment that will boost jobs and level up our country?
From the Office for Budget Responsibility to the Bank of England, many people have described the super deduction as doing exactly what my hon. Friend has said, and that is why we know it is working. I recently visited BT, for example, which, because of the super deduction, is now increasing the speed of its roll-out to millions more houses and creating thousands of new jobs in the process. My hon. Friend is absolutely right, and I encourage his businesses to take up the super deduction, and, indeed, we see that; a Deloitte survey recently showed that business intentions to invest in this country are the highest they have been in years.
I am afraid that I must tell the Chancellor that his infrastructure revolution is not very noticeable in cities in the north of England, which grind to a halt at rush hour. They desperately need infrastructure investment, particularly in public transport. Can he tell the House when he last met our city region Mayors in the north of England, and what his plans are for fiscal reform that will help them invest in public transport infrastructure?
My entire team meet the regional Mayors all the time, and of course we will do so in the run-up to the spending review and the Budget. I agree with the hon. Lady that intra-city transportation is important. Unlocking the economic potential of our cities is important to driving our economic recovery. That is why last year, in my first Budget, we announced £4.2 billion for intra-city transport settlements for our largest several cities outside London so that they enjoy the same long-term funding as London and can invest in exactly the types of schemes that she describes.
That investment in infrastructure does not get to the south Wales railway service. DFT Ministers keep announcing increased services along the main line in south Wales, which includes Pencoed in my Ogmore constituency, but no increased investment in stations, level crossings or, indeed, the track. When will the Chancellor get a grip and start investing in much-needed railway infrastructure in south Wales?
I am not sure that I entirely recognise the aggregate picture that the hon. Gentleman presents. Rail investment over the course of this Parliament is at record levels, under CP5—control period 5—and then CP6, to give the technical terms. I am very happy to take away the specific schemes. He will understand that those are a matter for the Welsh Government, but I am happy to facilitate with the Department for Transport as required.
I commend my right hon. Friend for his commitment to infrastructure, and I particularly welcome the UK Infrastructure Bank. Will he consider introducing an infrastructure bond so that long-term pension funds can invest in the future of this country too?
My hon. Friend is right. He has previously highlighted the importance of unlocking pension fund capital to invest in long-term assets such as infrastructure in the UK. He will know that the Prime Minister and I wrote to pension funds just recently discussing that, and my hon. Friend the Economic Secretary is actively working on creating a long-term asset fund, a new vehicle to unlock exactly the investment that my hon. Friend the Member for Wimbledon (Stephen Hammond) wants in exactly the type of infrastructure that this country needs.
End of Universal Credit Uplift
The Government have always been clear that the £20 increase to universal credit was a temporary measure, much like furlough and our other interventions to support this country through the acute phases of this crisis, but we are not done supporting those who need our help. This Government will always be on their side, and that is why we have created our plan for jobs. On the Government side of the House, we know that the best way to help people is to give them the skills and the opportunities they need to find high-quality work, and that is what the plan for jobs is delivering.
Ending the uplift will mean £286 million less for families in Wales, and risks plunging 275,000 families into poverty. Figures from the Bevan Foundation suggest that families in Ceredigion stand to lose £5.7 million in support. What assessment has the Chancellor made of the economic impact of ending the £20 a week uplift for communities in Wales?
The hon. Gentleman talks about those in poverty. The statistics most recently published show that 200,000 fewer people are living in absolute poverty in the United Kingdom than when this Government came into office. With regard to the economic impacts, I think all colleagues in the House can see the strength in our labour market: the need for businesses to find people and the fact that this Government are giving them the skills they need to get those jobs. That is the right strategy to help people and that is the economic strategy this Government are pursuing.
While the Chancellor was pondering the colour of the tiles for his new swimming pool and the site of his new tennis court for his country mansion this summer, back in the real world 20% of my constituency of Liverpool West Derby are facing a £20 a week cut to universal credit and sleepless nights about how they will survive. Can the Chancellor tell me what assessment the Government have made of the impact of the cut, and how many of the 12,530 people in Liverpool West Derby they estimate will be forced into poverty?
I do not accept that people will be forced into poverty, because we know, and all the evidence and history tells us, that the best way to take people out of poverty is to find them high quality work. We are creating jobs at a rapid rate, with eight months of continuous growth in employment supported by this Government: traineeships, sector-based work academies, apprenticeships, kickstart. You name it, we are delivering it to help those people in Liverpool to get the skills and the jobs they need to help support their families.
Of course there are people already in work who are on universal credit, but our plan for jobs helps them too. We increased the national living wage this year by an inflation-busting amount—£350 a year to help those families. We talked earlier about the lifetime skills guarantee, about apprenticeships, about skills boot camps. Those are all ways the Government are supporting people; each one of those initiatives, by the way, is worth thousands of pounds of support. Those people will benefit from those increased skills and benefit from guaranteed new job interviews or higher wages at the end of it. That is the right strategy to help those people in work.
This week, the charity Action for Children highlighted that a street cleaner with two children in private rented accommodation is already on average £729 worse off as a result of Conservative cuts since 2010, but that will soar to over £1,700 as a result of the Chancellor’s planned cut to universal credit. So I ask the Chancellor: how exactly are families meant to manage?
Again, what we know is that children growing up in workless households are five times more likely to be in poverty than those whose parents work. That is why we are supporting their parents to get into work and why almost 800,000 fewer children are living in workless households than when this Government first came into office. That is the right way to support those families. Of course, there are other bits of our welfare system that we have maintained the generosity of, but when it comes to universal credit or employment, we on this side of the House we will support their parents into work and, crucially, with their childcare costs. Mr Speaker, we forget that 85% of childcare costs for people on universal credit are covered to support parents into work, which we know will make a difference to those children.
Over a year ago, the Government launched their plan for jobs, a comprehensive and ambitious plan to help people back into work to earn more and to gain the skills they need to succeed in the jobs of tomorrow. The latest data shows that our GDP and our economy is recovering quickly, unemployment is falling, jobs are being created, and, indeed, household incomes have been protected. All of that tells me that this Government’s plan for jobs is working.
Cutting universal credit by £20 a week will hit working families very hard. It will leave support for unemployed families at the lowest real terms level for over 30 years. It will undermine the recovery and scupper the prospects for levelling up. Does the Chancellor of the Exchequer understand why every single former Work and Pensions Secretary since 2010 has opposed his cut?
The right hon. Gentleman talks about economic recovery. We are forecast to grow faster this year than any other country in the G7. The recovery is under way. Jobs are being created, people are getting into work, wages are rising. That is the right strategy for us to pursue. Our plan is working and we will stick to it.
My right hon. Friend is right to highlight this issue, which I know is of particular importance to her and her constituency. I assure her that I have spoken to my team about it and, as part of the spending review, we will further those discussions with the Department for Education. I look forward to the Chief Secretary and she and I talking about this issue again.
The Prime Minister’s and the Chancellor’s plans to increase national insurance will hit workers and businesses hard at the worst possible time. The British Chambers of Commerce described it as a “drag anchor” on jobs growth. The Federation of Small Businesses stated:
“If this hike happens, fewer jobs will be created”.
The TUC said that it is wrong to hit young and low-paid workers while “leaving the wealthy untouched”. We agree. Will the Chancellor of the Exchequer therefore explain why he is choosing a tax on jobs rather than on other forms of income?
I am very pleased to see the Labour party finally focus on the importance of jobs in this House. We also agree that it is important to support companies to hire people, which is why there is no national insurance payable on those employing people under the age of 21, on most apprentices up to the age of 25 or on people who are going to be employed in new freeports. And, because of the steps that Conservative Governments have made to the employment allowance, 40% of all small businesses pay no employer’s national insurance at all.
You cannot have it both ways. Cutting national insurance either benefits jobs or it does not. The Chancellor told voters at the election:
“Our plans are to cut taxes for the lowest paid through cutting national insurance”.
That promise is now in flames. The Chancellor is not cutting national insurance; he is putting it up. It cannot be right that nurses and builders are set to pay hundreds of pounds more each year in national insurance, yet those getting their incomes from a large portfolio of shares, stocks and property will pay not a penny more. Labour cannot and will not support this Tory Government’s manifesto-breaking, economically damaging and unfair tax on jobs. So let me ask the Chancellor again: why will this Government not fund health and social care in a way that is fair for families and for businesses?
I will be brief, Mr Speaker. When the hon. Lady was appointed shadow Chancellor, she went out of her way to say that any policies that the Labour party put forward on her watch would be “fully costed and we will explain how they are paid for”. We have heard about uplifts to welfare. We have heard about more money for public sector pay. We have heard about opposing every difficult and responsible decision that this Government have made. We have not heard once how the Labour party will pay for anything and we know what happened last time around when it did that.
I do not know about the Chancellor, but I am sure my children would love to come and visit the zoo. I thank my hon. Friend for putting forward a bid for the levelling-up fund. As he will know, bids are currently subject to competitive assessment against objective criteria, but more generally, I think the whole House will welcome the fact that zoos are once again fully open to the public this summer. They provide a wide range of valuable benefits.
We support the UK oil and gas sector, especially as gas is a transition fuel to net zero. The sector supports 147,000 jobs directly in its supply chains. I take the point that the hon. Gentleman raises; if he would like to write to me with more detail, I think I will be able to give him more comprehensive answers.
I commend my right hon. Friend the Chancellor for all his determination to create new jobs and new investment and to upskill the workforce; I believe it is paying dividends, as we are seeing in the economy. Does he agree that further education colleges have a vital role in upskilling our workforce, both young and not so young, to get the best jobs for the future?
My right hon. Friend is absolutely right about the important role of FE colleges, which is why I was pleased in the last Budget to invest billions over this Parliament to improve the infrastructure and the quality of our FE estate. With the Prime Minister’s lifetime skills guarantee, FE colleges will be instrumental in delivering to all adults the extra qualification that they need to get better-paid jobs. My right hon. Friend is absolutely right to focus on that.
The hon. Gentleman raises a very valid point. It is right that we maximise the opportunities from domestic suppliers; my right hon. Friend the Business Secretary is focusing on that through the industrial strategy. It is also linked to targeting the seven innovation sectors funded through the significant uplift in our research and development budget.
We are working hard in Shropshire on a £500 million investment in modernising A&E services in our local hospital. There is a funding shortage; I have written to the Chancellor on the issue and would be very grateful for a response. There is nothing more important than modernising A&E services for the safety of our patients and constituents.
I know that that is a very important constituency issue, and my hon. Friend has championed it frequently. He will know that, through the long-term plan, there is a £33.9 billion uplift in core funding, in addition to the other funding through covid and other measures announced by my right hon. Friend the Chancellor. I am very happy to discuss the matter with my hon. Friend; I know that it is a key constituency issue, and he is right to focus on it.
The Chancellor referred earlier to the record amounts being invested in the rail network. May I urge him to ensure that one of the projects that he supports is an east-west freight corridor linking the Humber ports to the west coast? That would greatly maximise the benefits of freeport status; it would also aid the levelling-up agenda.
I am in no doubt about the importance and the merits of my hon. Friend’s approach to freeports, not least after an early morning meeting that he and I had—last week, I think—on that very topic. As part of the integrated rail plan, we are looking at how we link that to levelling up across the UK. He is quite right to highlight the growth and productivity opportunity that freeports offer.
That is absolutely not right. When it comes to the super deduction, what the Labour party will never understand is that we want to support businesses to create jobs. That is what the super deduction does. I just gave the hon. Gentleman the example of BT creating thousands of new jobs because of the super deduction. When it comes to education, this Govt have invested £3 billion—£800 per pupil—in helping children to catch up with lost education, on top of a record increase in schools funding, which means that per-pupil funding in real terms at the end of this Parliament will be the highest it has been in over a decade.
Jobs are the most important way of helping communities to move forward. Those who have been out of work for 12 months or more can access the restart scheme, worth nearly £3 billion. Will my right hon. Friend ensure that part of his plan is helping everyone to have proper, decent work and decent training to enable them to get the right job?
My hon. Friend is absolutely right to highlight not only the importance of restart to the long-term unemployed, but how it sits alongside the kickstart scheme, the tripling of traineeships and the boot camps for skills. That is part of a plan for jobs that is working.
This Government are proud of the record investment that we have made in our armed forces—a record settlement for the next few years to support our forces and the work that they do around the world to ensure that we can play our responsible role.
We will end on this note, I think. We have had a good debate today, but one thing is clear: the difference between us and the Labour party. We believe in supporting people into work, we believe in supporting their skills, and, crucially, we believe in our plan for jobs, because it is working.
I thank the Chancellor for his willingness to make extremely difficult decisions to fix the crisis in waiting lists in the NHS and the problems in the social care system. The Health and Social Care Committee heard this morning that we need 4,000 more doctors to tackle the backlog. Does he agree that this is about reform as well as money, particularly in respect of the way we plan our workforce?
My right hon. Friend speaks on these matters with extreme authority and experience, and I thank him for all his engagement on them with me and others. He is right to want to make sure that we have a long-term plan for people in the NHS. He will know that we are committed to delivering 50,000 more nurses and 50 million more primary care appointments, but as part of that plan we must ensure that we get the number of GPs right as well, and I look forward to working with my right hon. Friend on that.
Given that the Prime Minister and the Chancellor have already decided to break their manifesto commitment on overseas aid and are now gearing up to break their solemn manifesto promises on the tax lock and the pensions triple lock, why should any voter believe ever again that a Tory manifesto promise is worth the paper it is written on?
What people know they get from this Conservative Government is a Government who are on their side, a Government who are delivering their priorities, whether their priority is 50,000 more nurses, 20,000 more police officers, record investment in every part of our country, or having a Government who are creating jobs and prosperity wherever people live. It says in that document that this is a people’s Government, and that is what we are delivering.
I know that this Government are listening to the levelling-up agenda, especially in the north of England, and on that note I should like to suggest that the best way of getting people back into work is putting forward new initiatives. Will the Chancellor meet me shortly to talk about Eden Project North?