The Chancellor of the Exchequer was asked—
Support for Business
Last week’s Budget set out an ambitious package to support business, enterprise and innovation: the super-deduction, new relief to incentivise investment, a reduction in business rates and investment in infrastructure, innovation and skills to drive future growth. This was a Budget that backed businesses across the United Kingdom.
Business rates are broken. Business owners on Boston Road and The Broadway in Southall in my constituency do not want hypocritical answers. They want the system fixed to support smaller businesses and help them to thrive. What will the Chancellor do to help them?
Last week’s Budget set out a £1.7 billion tax cut for many small and medium-sized businesses across the UK. It will mean that retail, hospitality and leisure businesses will see a 50% discount in their business rates next year, up to the value of £110,000 each. That will, of course, benefit many of the shops in Southall that the hon. Gentleman mentioned, and hopefully I can do my bit by visiting to buy my Diwali mithai later this week.
The Chancellor will know that Bracknell has successfully reinvigorated its town centre and continues to be a great place to do business. Noting that Bracknell and neighbouring Wokingham have one of the lowest centrally funded budgets in the country from central Government, will he please reassure me that east Berkshire will not be passed by when it comes to levelling-up funding?
I can assure my hon. Friend that, whether through the levelling up fund, the community ownership fund or the community renewal fund, this Government have ambitions to level up across the entire United Kingdom. With regard to the local government funding he asks about, last week’s spending review set out £1.6 billion over the year of additional cash grant, the precise allocation of which will be set out in due course by my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities in the local government finance settlement.
I wish the Chancellor and my hon. Friend the Member for Ealing, Southall (Mr Sharma) a very happy Diwali. As well as all the tax rises on income and business that the Chancellor has announced in the past six months, buried in the Budget Red Book is a plan for a stealth tax on the self-employed of £1.7 billion over the next few years. After the past 18 months, in which many self-employed people have had no help at all, and when they are already being hit with the other tax rises he has announced, why are the self-employed now being hit with this extra tax rise, which he did not even mention in his Budget speech last week?
There were no extra taxes for the self-employed in last week’s Budget; the right hon. Gentleman may be referring to a timing difference that was reflected in the Budget scorecard of previously announced policies. With regard to the self-employed, he should take a moment to reflect on the fact that this Government provided almost £30 billion of support to millions of self-employed people throughout the crisis, and I am very glad that we did so.
May I first thank the Chancellor for the steps in the Budget to help retail, hospitality and leisure businesses? They have gone down very well in my constituency, where those businesses are important, were hit hard during in the pandemic and were grateful for the support they got. People have commented to me that the most useful thing he can do is to focus on getting the public finances in order, as he spoke about in the latter part of his speech, so that we get taxes on a downward path as we go through this Parliament. That is the best fiscal way to help businesses to prosper in the future.
As always, my right hon. Friend makes an excellent point, and I thank him for the eloquent speech he made on this topic last week. I wholeheartedly agree with him. My intention and goal over the rest of this Parliament is to reduce taxes, and we both know that the best way to create growth and prosperity in this country is to unleash the entrepreneurial innovation of our private businesses.
A happy Diwali to the Chancellor and all who are celebrating. Hospitality and tourism businesses face a tough winter, with rising fuel, staffing and supply costs. While the Scottish Government, to their credit, have brought in 100% rates relief, the Chancellor’s proposals of a few pence off a pint are small comfort in comparison. A greater help would be maintaining the 12.5% value added tax rate right through next year, not putting it back up to 20% in the spring. Will he bring forward proposals to do that and to support our tourism and hospitality businesses in the Finance Bill?
The reduced rate of VAT was put in place to support the hospitality industry during coronavirus. It extends all the way to next spring; it does not step up until next March, as the hon. Lady pointed out. As she also pointed out, the Government are putting in place business rates support to help businesses in that industry—as I said previously, up to £110,000 for each business next year through a 50% discount on their business rates, with Barnett consequentials flowing to Scotland as a result.
Brewers have gone through a really challenging time throughout the pandemic, so the Chancellor’s announcement of a reduction in the draft beer duty rate was extremely welcome. Keith and Dave Bott, owners of Titanic Brewery, want to pass on their thanks to the Chancellor directly and hope that he can come and enjoy the Bulls Head in Burslem to celebrate this fantastic achievement.
I thank my hon. Friend for the kind invitation, which he also sent me by phone. I look forward to accepting it soon and to celebrating Stoke’s success in not one, not two but three levelling-up fund bids.
Supply Chain Issues
Current stresses on supply chains are a consequence of global factors; as economies around the world recover, demand is outstripping supply. Where it makes sense, we are taking action to support UK supply chains, such as increasing the supply of lorry drivers to help the haulage sector meet demand for deliveries.
Last week’s National Audit Office report on supply chain finance highlighted that huge contracts involving Greensill Capital, signed off by the Treasury, provided no benefits to the NHS. Does the Minister accept the NAO report, and will she ensure that in the future, contracts are properly awarded to avoid this kind of insidious lobbying?
I am sure that the Government will be responding to the NAO report in due course, but I can assure the hon. Member that the Treasury works very hard with the Department of Health and Social Care to make sure that funding for the NHS, which we are increasing substantially, goes to good use and improves care for patients.
“energy price rises…increased evidence of supply bottlenecks …shortages in key occupations”.
Those are not my words but those of the Office for Budget Responsibility, which has issued a clear warning that the Government’s supply chain chaos will weigh on the recovery beyond its current forecast. Can the Minister help businesses and families prepare by explaining how much this chaos will cost the country this year?
I thank the hon. Member for her question. I do not agree with the picture that she paints. As I said earlier, there are global factors affecting challenges to the supply chain. We are providing support where it is appropriate. Specifically on energy costs, customers are already supported by the energy price cap, and we are providing £500 million extra help to households that need it during this winter.
The run-up to the festive period is a busy and crucial time for many businesses. They simply cannot afford delays in getting goods to warehouses from our ports, yet that is exactly what the logistics industry is warning that the shortage of heavy goods vehicle drivers is causing. Can the Minister guarantee that no presents will be missing from under the tree this Christmas because of her Government’s complete failure to plan ahead?
We are indeed taking steps to support the haulage sector, where there is a long-running situation with vacancies for HGV drivers. The action we have taken includes making available 5,000 temporary visas for the short term, increasing the number of tests available so that there is greater capacity for new drivers to take tests, changing cabotage restrictions, and funding improved facilities for drivers. In the longer term, we need to see both better pay and better conditions for lorry drivers.
Distributional analysis published at the Budget and spending review last week shows that in 2024-25, tax, welfare and spending decisions made since the spending round two years ago will have benefited the poorest house- holds most as a percentage of income. This Government believe that work is the best route out of poverty. That is why the Government are investing £6 billion in labour market support over the next three years.
Analysis of the Chancellor’s Budget and tax and spending plans for the next six years shows that they will cost women an additional £48 billion over that period. That is a staggering amount of money to be taken from women, and it is in contrast to the planned tax cuts for banks. Is that why the Government have failed to produce an equality impact assessment for this Budget, as they are required to—because the Chancellor knows that his tax choices are totally unfair?
The hon. Lady must have missed a number of measures announced by the Chancellor in the Budget last week in which significant investment was made to support families through the household recovery fund and support for women in particular to get back into the labour market, alongside a whole range of other interventions.
One issue concerning me at the moment is the lack of access to cash in the north of my constituency, which suffers from significant degrees of inequality. I was pleased to be at the opening of Kingshurst post office, which will restore some cash services, but the issue remains a problem as retail banks reduce their estate. Does my hon. Friend agree that shared banking hubs are a good way forward? Will he highlight to the House what work is being done to increase access to cash?
Banking hubs will absolutely be a part of the solution, alongside a whole range of other interventions. The Government have committed to legislate on this matter, but in the meantime, I am very hopeful that industry will come forward with meaningful proposals for a range of options to deal with the declining use of cash and ensure access is available everywhere.
The colossal economic inequality facing rural communities is something that I hope the Government take seriously. Is the Minister aware of the collapse of local housing in communities such as mine—and indeed in the Chancellor’s next-door constituency—into the second-home and holiday-let markets? Following the Welsh Assembly Government’s example, will the Minister look at doubling council tax on second-home properties, so that communities such as mine do not lose their local populations and become riddled with ghost towns?
The Government are looking at tightening up the rules around second homes and council tax. We would be very happy to engage with the hon. Gentleman on the matter.
NHS Trusts: Capital Spending
It has just been announced, through the spending review, that the NHS will receive: over £12 billion of capital funding for investment in and maintenance of the NHS estate; £5.9 billion for diagnostics, technology and elective recovery; £4.2 billion for at least 70 hospital upgrades and 40 new hospitals; and funding to eradicate mental health dormitories. That is on top of £500 million of additional capital funding given for the second half of this year to help tackle the elective backlog. It means that NHS capital budgets will have increased by over 8% year-on-year above inflation since the start of the Parliament.
I welcome the funding for the new hospitals programme, and highlight to the Minister that the Queen Elizabeth Hospital in King’s Lynn, with 200 props holding up its structurally deficient roof, has a compelling case to be one of the new schemes. Given the inevitable need to rebuild the Queen Elizabeth Hospital, does my right hon. Friend agree that it is far better to have a properly funded new hospital using modern methods of construction, rather than its being an unplanned cost, with emergency funding constantly being needed to prop up its failing building?
I welcome my hon. Friend’s clear and obvious passion for improving the lives of his constituents. As well as committing £3.7 billion to make progress on the 40 hospitals named last year, the Government have committed to fund a further eight new hospitals by 2030. The process for selecting those eight is being led by the Department of Health and Social Care and will be based on a range of criteria, including clinical need and deliverability. I encourage my hon. Friend to engage in that process, but I am happy to have any further discussions that would be useful.
I thank the excellent Front Bench team for a brilliant Budget which benefited every member of my constituency. I know the Treasury team cares passionately about delivering value for taxpayers. When it comes to significant capital spend for NHS projects, such as the Shropshire plan to build a state of the art critical care unit on the Welsh border, where costs have escalated from £312 million to £560 million, will my right hon. Friend say who is responsible for ensuring value for money and how they are held to account? Can he also assure me that no more cash will be allocated to that project until a ringfenced sum is allocated for accident and emergency care in Telford?
I thank my hon. Friend for her kind words about the Budget. I agree: it was a major fiscal event, one which puts the country on a strong path for continued growth. She is absolutely right to highlight the importance of delivering value for money. That is certainly something I take very seriously. It is, obviously, a shared responsibility across Government. In terms of the specific concerns she raises about that case, I urge her to speak to colleagues at the Department of Health and Social Care about the right hospital configuration for Shropshire. Again, I am always happy to have any conversations that are useful.
I am pleased that the Minister mentioned the opportunity to provide eight additional rebuilds of hospitals, because Stepping Hill Hospital has served the people of Stockport and surrounding areas well since it was built in 1905. However, all hospital buildings reach the end of their useful lives and, with a £40 million maintenance bill, that one certainly has. The council and the foundation trust have submitted ambitious plans to rebuild the hospital on a new site in the town centre, moving it to a more accessible location with state-of-the-art facilities and helping to regenerate the centre of Stockport. This is a win-win, so will the Minister look favourably on these plans?
The hon. Gentleman makes a passionate case for Stockport and the health facilities there. Obviously, we will always look at these proposals seriously, as will Departments including the Department of Health and Social Care. Although I cannot comment on this proposal specifically, not having had sight of it in detail, I am always happy to have conversations with him.
Levelling up is this Government’s defining mission; it is a golden thread running through this Budget and spending review. We are creating the right conditions for businesses to grow and giving people the right skills to succeed. We believe that the place where someone grows up should never limit their prospects.
This Government are rightly committed to levelling up all parts of the United Kingdom, including Scotland. Improving transport links by extending the Borders railway in my constituency from Tweedbank to Hawick, Newcastleton and on to Carlisle would be a very good way of improving the economic opportunities for people living in those communities. Will the Minister confirm that the UK Government support the extension of the Borders railway as part of the levelling-up agenda?
I commend my hon. Friend for his forthright campaign for the extension of the Borders railway. I reassure him that the Department for Transport and Transport Scotland are discussing the options to extend the railway, and, as I think he knows, the £350 million Borderlands inclusive growth deal includes up to £5 million to assess feasibility.
My constituency contains Gatwick airport and, by many measures, has been one of the most negatively affected by the covid-19 pandemic. Will my hon. Friend say how levelling up will support my constituents to recover from the pandemic?
I know my hon. Friend’s Crawley constituency well and I recognise the importance of aviation to livelihoods there. I am sure that he will welcome the extension of the airport and ground operations support scheme that the Chancellor announced to help airports such as Gatwick to recover from covid. We have also provided £180 million in covid loan schemes to support businesses in Crawley and, as he knows, Crawley has already received £21 million through the towns fund.
First, may I put on record my thanks to the Chancellor for announcing that Radcliffe will receive £20 million from the levelling-up fund to regenerate the town centre, with new leisure facilities and a space for adult learning and new business? Following that extra funding and the previously announced new high school for Radcliffe, does the Minister agree that the Government are committed to creating new opportunities for young people so that they have the best chance to get on in life and fulfil their potential?
I congratulate my hon. Friend, because his constituency is indeed receiving £20 million from the levelling-up fund to deliver a new civic hub in Radcliffe, which will improve access to adult education while freeing up vital space for a new secondary school. As I am sure he saw in the Budget and spending review last week, we are fully committed to providing people with the skills that they need to succeed in life.
My constituency is officially one of the most economically deprived constituencies in the country. If the rhetoric of levelling up is going to be a reality, the bid from Leeds City Council to upgrade and redevelop Fearnville sports centre to turn it into Fearnville wellbeing centre is exactly the kind of bid that should be agreed. Local people were therefore shocked when, the day after the Budget, the leader of Leeds City Council received a letter from the Government turning down the bid. The Chancellor is sitting on the Front Bench; will he step forward now and agree to meet me, the leader of Leeds City Council, James Lewis, and a delegation of local residents with a view to approving the council’s bid for the upgrade of Fearnville sports centre?
I thank the hon. Member for his question, which gives me the opportunity to remind him that his area is receiving hundreds of millions of pounds of investment in transport infrastructure. We look forward to receiving further bids for future rounds of the levelling-up fund, for instance. We are delighted to invest in constituencies such as his.
The Exchequer Secretary says that levelling up is the defining mission of this Government, yet if we look at the spending review priority outcomes and metrics, we can see that across the Department for Business, Energy and Industrial Strategy, the Department for Levelling Up, Housing and Communities and the Treasury, there is just one metric on which to judge the Government:
“Economic performance of all functional economic areas relative to their trend growth rates”.
That is all that they are being measured on, so will she be specific? By how much does she expect to close the economic gap by the end of this Parliament?
I thank the hon. Member for her interest in our objective to level up across the whole United Kingdom. As she repeated, it is the defining mission of this Government; as she can see, it is the golden thread running through the spending review and the Budget, with steps taken and investment made across Government to support levelling up across all our constituencies.
The English metro Mayors submitted levelling-up fund bids—I declare an interest—but only one was successful. The South Yorkshire bid was well crafted and focused on improvements to our bus services that would have supported the levelling up and net zero agendas. Will the bids be looked at again as part of a second round?
South Yorkshire will receive a share of the £5.7 billion for transport for the region. Overall, as the hon. Member will know and as he will have heard when he attended our debate yesterday afternoon, support for levelling up and investment have been received by constituencies all around the country and represented by hon. Members across the House. There will be further rounds for levelling-up funds to put in for.
Young People: High-skilled Jobs
Through our plan for jobs, nearly 95,000 young people so far have started a kickstart job; we have extended that scheme to March 2022. More than 100,000 apprentices, of whom 75% were under 25 years old, have been hired under our new incentive payments. More than 17,000 young people have started a traineeship, and we have provided funding for 24,000 traineeships a year at the spending review.
Many of the manufacturers that I have visited recently in my constituency, including Don-Bur and IAE, have told me about the challenges that they face when recruiting for engineering roles. Will my right hon. Friend update the House on the Government’s work to encourage more young people into those highly skilled roles and attract more apprenticeships to Stoke-on-Trent?
My hon. Friend is always a fantastic champion for Stoke and the wider community. There are 145 employer-designed apprenticeship standards that relate to engineering and manufacturing roles. At the spending review, we announced that funding for apprenticeships will increase to £2.7 billion by 2024-25. We are also continuing to improve the system for employers. That includes an enhanced recruitment service for small and medium-sized enterprises, supporting the use of flexible training models, and a new return-on-investment tool so that employers can see the benefits that apprentices create in their business.
We all welcome the fact that nearly 100,000 young people across the country have already started a job through the kickstart scheme, including 20,000 in London. Does my right hon. Friend agree that by extending the scheme until March next year, we are giving more young people the opportunity to develop the skills, confidence and experience that they need to get into high-skilled, high-wage and long-term sustainable jobs?
My right hon. Friend is absolutely right. Kickstart is providing valuable jobs and work experience to thousands of young people. As of last week, nearly 95,000 young people had started a kickstart job, compared with 56,000 young people at the equivalent point for the last Labour Government’s future jobs fund. That shows that it is a very successful programme. With the current pace of starts, we are confident that earlier this month, 100,000 young people will have started a kickstart job.
Education is central to highly skilled jobs. This week, a report by the all-party parliamentary university group, which I chair, showed that young people from the most disadvantaged backgrounds most understand the value of a university education. Will the Chief Secretary celebrate the work of universities across the country and perhaps suggest to some of his colleagues that they stop devaluing courses by describing them as of low value?
The hon. Gentleman is right to champion the university sector. We in this country are fortunate in having such a fantastic set of universities, and it is important for young people to have the opportunity to enrol on courses that will meaningfully improve their life chances and career prospects. However, it is also important to balance a strong offer for the university sector with an equally strong vocational offer, and we are keen to strike that balance through the new T-levels and our investment in skills—which was a defining theme of this Budget and spending review—so that whatever young people decide to do, they have a strong and credible route to employment and success.
Scotland leads the world in the development of wave and tidal technologies. The expansion of that sector could create fantastic chances for more young people to secure more highly skilled jobs, and could set them up for possible worldwide opportunities. However, if the sector is to expand, it will need a ring-fenced pot of money in the forthcoming contracts for difference auction. It is believed that the Treasury blocked that concept. Will the Chief Secretary meet me to discuss how changes could be made that would allow the sector to bid and be successful in scaling itself up?
The hon. Gentleman has referred to the contracts for difference mechanism, which has been hugely successful in helping to drive the improved economics of technologies including offshore wind. I think that we as a country should be very proud of that, especially in the week of COP.
There is no doubt that there are exciting opportunities for young people. I think that the Department with which the hon. Gentleman would do best to engage on that is the Department for Business, Energy and Industrial Strategy, but I am always happy to have any conversations that would be useful in this regard.
Net Zero Emissions
As 120 world leaders gather in Glasgow today, the hon. Member for Greenwich and Woolwich (Matthew Pennycook) asks a very pertinent question. Our net zero strategy outlines measures to enable us to make the transition to a green and sustainable future. As for fiscal measures, the Budget and spending review commit us to £30 billion of public investment towards net zero.
There is an obvious and pressing need for all fiscal announcements to be fully aligned with our country’s net zero target. To that end, will the Minister commit herself to at least the publication of the estimated emissions impact of decisions in future Budgets and spending reviews?
The hon. Member will know that in our Budget we set out a number of measures to enable us to make the transition to a net zero world. We have made announcements relating to transport and warmer, greener buildings as well as energy and industry, and of course the Treasury always considers the impact in relation to net zero targets.
The Chancellor claims to want to tackle climate change and improve air quality through measures including the decarbonising of transport. If he is serious, this week of COP26 presents him with a great opportunity to commit himself to the electrification of the East West Rail line from day one to avoid the need for diesel locomotives and the future costs of retrofitting. Will he make that commitment today?
The hon. Gentleman has raised the important issues of electrification and the importance of making our transport green. As he will have seen, the Budget provided research and development funding to commercialise low and zero emissions technologies. I would be happy to talk to him about the local issue he raised.
I thank the Chancellor and the Treasury team for the significant levelling-up funds awarded to my constituency in the Budget last week. Hydrogen will be key to net zero, and one project that will be able to benefit from that investment is Riversimple, a hydrogen fuel cell car manufacturer in Llandrindod Wells. So that we can reach our net zero targets as early as possible, may I urge the Minister to visit Llandod, meet representatives of Riversimple, learn about what they do, and above all give us the chance to say thank you in person?
I am very pleased that my hon. Friend’s constituency has benefited and is taking part in the progress towards net zero. I should be happy to visit her there.
In his Budget statement last week, the Chancellor did not use the word “climate'” once. On the biggest issue of our time, he had nothing to say.
As well as deciding to cut domestic air passenger duty, which will lead to 400,000 more domestic flights a year, the Chancellor failed to invest in public transport. He is subsidising those who can already afford to take domestic flights, while putting up taxes on ordinary people. How on earth does he think that this sends the right message as the COP26 summit begins? Is not the reality that he is flying in completely the wrong direction when it comes to tackling climate change?
I am sure the hon. Lady will have seen the net zero strategy, which was published the week before the Budget. I am sure she will also know about the significant progress that the Chancellor has made on bringing other countries together to increase the international effort on climate finance. Yesterday, we set out our commitment to increase our international climate finance by £1 billion by 2025, on top of the £11 billion that we have already announced. The Chancellor, together with other Finance Ministers, is making sure that we help to reduce to net zero emissions through a number of measures. I am very happy to—
Order. I call Alison Thewliss.
COP26 is under way in my constituency, and the Scottish Government have set an ambitious target to reach net zero by 2045. In contrast, the Minister has completely failed to justify the cut to air passenger duty on internal flights while allowing the already eye-watering price of train tickets to rise again at the turn of the year. This is no pro-Union policy, as the Government like to pretend, because 62% of Scots think that cutting APD is entirely the wrong priority. So, in this week of COP, will the Minister do her bit for the planet and scrap this climate-damaging policy once and for all?
I am grateful to have this opportunity to address the issue of air passenger duty. The hon. Member will know that, as well as cutting the duty on domestic flights, we have increased taxation on long-haul flights. She will also know that domestic flights are contributing less than 1% of the UK’s carbon emissions.
The fiscal rules announced at Budget will ensure that the public finances remain on a sustainable path and support a strong economic recovery. The Government will borrow only to invest in future growth, so that future generations are not unfairly burdened, and I am pleased to say that the Office for Budget Responsibility’s analysis shows that the Government’s fiscal plan is working.
I welcome the new fiscal rules set out by my right hon. Friend in his Budget last week, which will mean that the Government borrow only to invest and that they get the debt falling again by 2024. Does he agree that, unlike the Labour party, which has no plan to deliver responsible public finances, these rules show how it is only the Conservatives who can be trusted to manage our public finances responsibly, avoiding higher interest rates and even higher taxes in the future?
My hon. Friend is absolutely right. The best foundation for our success as a country is a strong economy and responsible public finances. In contrast to the Labour party, which comes out with unfunded, reckless promises that would lead to our debt rising uncontrollably, it is this Government, and only this Government, who can be trusted to manage the nation’s economy responsibly.
Given the commitments that the Prime Minister is making at the climate circus in Glasgow this week, how can the Chancellor possibly say that the public finances will be managed effectively when the huge costs of net zero are not even published by the Treasury, let alone known by the public? We are already seeing taxes increasing to pay for the huge infrastructure changes that reaching net zero is going to entail.
I very much appreciate the right hon. Gentleman’s concern about the cost of transitioning to net zero. The Government are also mindful of those costs, and the net zero strategy, which my right hon. Friend the Chief Secretary to the Treasury mentioned earlier, sets out a comprehensive approach to transitioning, backed up by £30 billion of investment. Indeed, as a result of the spending review and the Budget, the Northern Ireland Executive will receive on average about £1.5 billion a year in Barnett consequentials to help to fund priorities as required.
Plan for Jobs
Some 1.6 million people have moved into work having received support from work coaches, and hundreds of thousands of jobseekers have been supported by our other Plan for Jobs programmes, such as kickstart. It is clear that this plan is working; unemployment is now expected to peak at less than half of what was initially predicted.
Unemployment in West Berkshire has fallen in every month since April, in no small part thanks to the apprenticeship levy and the kickstart scheme. However, among the over-55s who lost their job in the pandemic the picture is more mixed. Can my hon. Friend set out what the next stage of the Plan for Jobs will do to target that group, particularly given their risk of long-term unemployment?
Yes, I can. My hon. Friend is right; unemployment is at 3.5% in her constituency, as against the 5% average. On people aged 50 to 64 who unfortunately lose their job and find a return to work less likely, this spending review announced an enhanced 50-plus offer worth more than £20 million to ensure that that cohort of the workforce receive that support to remain in work and benefit from living those fuller working lives. That is in addition to the other interventions across the whole of the working age group.
Right now, in this country, about 1 million children are growing up in long-term workless households. Does my hon. Friend agree that the measures the Chancellor took in the Budget last week to boost the national minimum wage and the work allowance, and to lower the universal credit withdrawal rate when people move into work, mean that we have the best opportunity in more than a generation to really bear down on long-term unemployment and improve the life chances of children growing up in homes where there is no role model of someone going out to work every day?
I agree entirely with my right hon. Friend, who has been a champion in this area, throughout his experience in government and in his work now as Chair of the Select Committee on Welsh Affairs. In addition to what he has set out, we responded to the call to raise the national living wage. It may interest him to know that the April 2022 increase will mean that a full-time worker’s annual salary will have increased by more than £5,000 since the national living wage was introduced, when he was in government, in April 2016.
I recently visited the newly opened jobcentre in Knowle to support people back to work, and I have previously been chair of the all-party group on apprenticeships. I cannot fathom why the Government are abolishing BTECs, which are a crucial bridge for young people in Bristol South. Has the Treasury done an assessment of abolishing BTECs, and will the Government reconsider?
The hon. Lady will know of the Government’s investment in T-levels and the additional investment last week in apprenticeships, as well as a number of other interventions that the Chancellor has worked tirelessly with employers’ organisations and trade unions on to develop the workforce and opportunities over the past 18 months.
Wages: Lowest-income Households
We are increasing the national living wage to £9.50 an hour from April 2022. We are also cutting the universal credit taper rate from 63p to 55p. Those measures will increase the incomes of millions of people and support the lowest-income households.
I thank my right hon. and learned Friend for that statement. I strongly welcome the increase in the national living wage to £9.50 and the cut to the UC taper rate. Those are strong work incentives, which will help people to keep more of their money. However, given that not everybody will read the Budget, may I ask what her strategy is to make sure that those who can benefit from these changes will know that they have taken place?
I thank my hon. Friend for his support. He will agree that the best way to support people is by supporting them into work and helping them to progress once they are in work. He makes an important point about communications. The Government run an annual public communications campaign to inform workers and employers of the change to the minimum wage rates. Her Majesty’s Revenue and Customs also has a dedicated team who actively provide information to individuals and employers on minimum wages, and the UC changes will also be reflected in the claimants’ statements once they are in effect.
All those announcements are, of course, welcome for low-earning households in which somebody has a job, but none of them will deliver a single penny into the pockets of the very lowest-income households in which nobody is able to get a job. They are being hit by a £1,000 a year cut in universal credit. What is there in the Budget that will reinstate that £1,000 cut for the very lowest-income households on these islands?
We want to encourage as many people as possible into jobs. The Chancellor has put forward a plan for jobs, with a number of work programmes to ensure that we get both young people and the over-50s into work. Crucially, through the restart scheme we will get people off universal credit and into jobs. We also recognise that some people cannot work, which is why six weeks ago the Chancellor announced £500 million to help those who need our support, to be distributed through local authorities.
Last week’s Budget delivered a stronger economy for the British people, with stronger public finances; support for business; stronger public services; investment in infrastructure, innovation and skills to drive future growth; and a significant tax cut for the lowest-paid, because this will always be a Government who support and reward work.
My constituent Peter Phillips fell victim to the loan charge in 2019 and settled before 30 September 2020. HMRC advised him, like many others, that that was the right thing to do. In effect, those who settled before the Morse review did not get the benefit of the changes that were implemented: my constituent paid more than someone who disclosed nothing to HMRC. Does my right hon. Friend think that was in the spirit of the Morse review? Has HMRC got it wrong?
It is obviously difficult for me to comment on the case of a particular individual. The previous Chancellor, my right hon. Friend the Member for Bromsgrove (Sajid Javid), asked Lord Morse to conduct an independent review and the Government accepted and implemented the vast majority of its recommendations. People who settled early had the benefit of certainty from their settlement, but my hon. Friend should write to the Financial Secretary to the Treasury and we will ensure that we look at that case, as he requests.
According to the Office for Budget Responsibility, the Government’s supply chain chaos, woefully inadequate post-Brexit planning and a lack of HGV drivers have contributed to higher inflation. The cost of the weekly shop is already going up and up, as the Chancellor will have heard from shoppers in Bury last week. Does he have any idea of how much the average weekly supermarket shop is expected to increase in the next year for a typical family?
We are cognisant of and aware that there is price inflation; indeed, last week’s Budget addressed that and explained to the British people some of the global factors that are behind the rise in prices and are not unique to this country. As I said then, where this Government can act, we will. Whether it is the interventions for HGV drivers that my hon. Friend the Exchequer Secretary to the Treasury set out, the £0.5 billion household support fund or, indeed, the freezing of fuel duty, this Government are doing what they can to help with the cost of living.
Let me help the Chancellor with the answer to that question. The typical family shop is likely to go up by £180 more next year. It is not just food prices that are rising: gas and electricity bills are already up by £139 and they are only going to go up more. The Chancellor had the opportunity in the Budget to help people with their gas and electricity bills by reducing VAT to 0% through the winter months—something that Labour has called for and that the Prime Minister backed when he was campaigning to leave the European Union. Who should the public blame for VAT on heating bills not being cut: the Prime Minister, for not keeping his word, or the Chancellor, for choosing to cut taxes for bankers instead?
With regard to a VAT cut for fuel, perhaps I should point out to the hon. Lady some of the remarks from independent commentators about what that would do. The Institute for Fiscal Studies said that the benefit would accrue “to higher-income households.” The Resolution Foundation said a VAT cut
“would not be targeted and would be quite expensive”.
Tax Research UK said:
“This cut will not help the poorest much…this plan is a subsidy to the best-off, not the least well off.”
Instead, we have provided £0.5 billion, targeted at those who need our help. The hon. Lady mentioned £108; the household support fund will be able to provide £150 to between 2 million and 3 million of the most vulnerable families in our country. Indeed, the national living wage is going up next year, which will ensure a £1,000 increase for someone who works full time on the national living wage, and because of the cut to the universal credit taper a single mother with two kids who works full time and rents will be £1,200 better off.
First, may I put on record my thanks to my hon. Friend, who raised this issue with me some months ago in the run-up to the spending review? I hope that he and his communities are pleased with the funding that was allocated, thanks to his and other interventions. I am of course prepared to work with him and the Secretary of State for Business, Energy and Industrial Strategy to consider all relevant proposals and assess the right options for the taxpayer in this country.
We did have a measure in last week’s Budget to support the hospitality sector with its recovery, and that is the £1.7 billion cut to business rates next year. That represents the largest single-year cut to business rates in more than 30 years outside of the coronavirus. It provides a 50% discount to hospitality businesses, which I know are important to our local communities. I am sad that the hon. Member did not raise the not one but two levelling-up fund bids that Liverpool enjoyed last week, which I know will also help to regenerate parts of the city and provide improved transport connections to benefit local businesses.
I am happy to provide my hon. Friend with that reassurance and I hope that his council engages constructively with him, as so many others have and have seen the benefits of that in last week’s announcements. We will open round 2 in due course and it will most likely launch no later than the spring. I can tell him also that we have no plans to change the current way that we assess the priority categorisations, so High Peak should remain as it was.
Does the Chancellor agree with the Conservative party donor, Mohamed Amersi, who once claimed that the Tories were operating an access capitalism scheme for their major donors, and described corruption as a “heinous crime”, but who was later seen to have been part of a £162 million bribe to the daughter of Islam Karimov, the awful former president of Uzbekistan? If so, can he look at this and bring forward the response to the Pandora papers, particularly the Registration of Overseas Entities Bill?
The Government are committed to making the UK a hostile place for illicit finance and economic crime and ensuring that all donations to political parties comply with the legislation that the Labour party enacted in Government. We have taken tough action through our No Safe Havens strategy to ensure that the correct UK tax is paid. Our landmark 2019 economic crime plan builds on that, and we will continue to work on these matters.
I know that my hon. Friend has paid close attention to this issue, which obviously has a particular impact on his constituency. He will know that the current Dartford crossing is one of the most congested pinch points in the entire strategic road network, which is why the Thames crossing development is part of the Department for Transport’s plans. We also recognise that it needs to be brought about in a way that maximises the benefits and mitigates the cost to local communities and businesses. The commitment does include an obligation to create tens of thousands of new jobs. I understand that National Highways has recently launched a consultation, in which I know my hon. Friend and his communities will be engaged.
In reforming domestic air passenger duty, the Chancellor could have done something really clever; he could have incentivised the use of low-carbon forms of transport domestically, and in areas where those do not exist, mitigated the impact with a best alternative. Instead, he has done something that is making travel relatively more expensive for those low-carbon alternatives. How on earth, in the week of COP26, is this contributing to the Government’s net zero efforts?
As has been pointed out about three times today, alongside the cut in domestic air passenger duty, we introduced a new ultra-long-haul band with a higher rate. The net effect on carbon emissions of those two things is at least a wash, and one independent forecaster said that it would actually reduce carbon emissions. That comes alongside significant investment of £180 million to incentivise sustainable aviation fuel, and billions more for electric transportation for consumers.
The Government are focused on delivering more homes where they are most urgently needed, but we need the right infrastructure in place to facilitate this. Many of the Government’s core housing supply programmes, including an additional £1.5 billion announced at the spending review, focus on precisely that point. Recent reforms to the NHS capital regime, some of which have been legislated for through the current Health and Care Bill, will further improve the system, including through better integration between the NHS, local government and care providers.
In an earlier answer, the Chancellor confirmed that the levelling-up fund round 2 bids would be some time in the spring. Many Members across the House want to engage in the process, as does Bridgend County Borough Council, which covers the majority of my Ogmore seat. However, it is difficult to plan if the Treasury will not confirm the date of the conclusion of the round 2 bidding process. May I press the Chancellor to tell us more than just spring next year, because spring does tend to be an awfully long time when the Treasury are making decisions?
I am glad that there is widespread support for the levelling-up fund, and we are keen to work with all Members. I say spring because we want to ensure that we quickly learn the lessons from this round and incorporate them into future rounds. However, I assure the hon. Gentleman that our desire is to get on with this, because we want these projects to be delivered so that our communities can start to see the benefits as soon as possible.
I know that my hon. Friend will have campaigned hard for the funds that have come through. We will continue to support people across the House and in her constituency to level up.
Rather than talk about competitive bids for funding, could we talk for a moment about mainstream council finances? We know that this Budget will significantly shift the burden to local authorities and require a significant rise in council tax, which people can ill afford. We also know that councils’ finances have not fully recovered and they have not been fully compensated. What is the Chancellor doing to talk to local councils about the pressures that they are facing?
I actually did engage with representatives from local authorities in the run-up to the spending review. Last week’s spending review outlined an additional £1.6 billion a year of cash grant for local authorities, which will ensure that local government core spending power will rise at about 3% a year in real terms over the spending review period; that is historically high. It has been warmly welcomed by local councils up and down the country, and will ensure that council tax increases can be kept at more moderate levels.
I congratulate my hon. Friend and fellow Members representing Stoke-on-Trent on the £56 million their city was awarded in the first round of the levelling-up fund, winning not one but three bids to fund regeneration projects across the city, delivering new homes, community facilities, and office and hospitality space. She makes an important point about funding grassroots community capacity. I assure her that the UK shared prosperity fund, which is worth over £2.6 billion, will allocate funding across the UK. Further details of the fund will be set out later this year.
The women-run Acton firm Fashionizer, which makes uniforms for hotels, diversified into mask manufacturing during the pandemic. The firm is now getting back on its feet, but the order book is just a third of what it was, so those working there ask the Chancellor if he could please extend the rate relief for the hospitality industry to those who supply hospitality, including food and laundry services, some of them exclusively. They have given me a few of their masks for you, Mr Speaker, for the Chancellor and for anyone who wants one. I think a few of the hon. Members on the back row of the Conservative Benches could do with them.
I commend those at the hon. Lady’s business for what they have done through the pandemic and beyond with the manufacture of masks. We have moved out of crisis phase now, so our interventions to support the economy are broader in scale, but I am confident that the measures we are taking to invest in infrastructure, innovation and skills will lead to economic growth and benefit her businesses, not just the one she mentioned.
I sincerely agree with my hon. Friend and thank him for his support. We are overhauling the UK’s outdated alcohol duty rules—the biggest simplification for 140 years—and taking a common-sense approach. Drinks will be taxed in accordance with their strength, encouraging responsible drinking, tackling the problems caused by cheap high-strength drinks, and supporting our pubs and our hospitality sector.
The Chancellor promised the aviation sector a bespoke support package before breaking his word. Instead these businesses will have to make use of other support schemes, including time to pay. What does he say to those businesses now hit by tens or hundreds of thousands of pounds in interest charges by HMRC when the sector is quite clearly still very badly affected by the pandemic?
Obviously it would not be right for me to comment on the individual circumstances of any business, but HMRC’s time to pay service has supported tens of thousands of businesses through the crisis with flexible repayment periods. Similarly, the bounce back loan scheme introduced by my hon. Friend the Economic Secretary comes with a pay-as-you-go option to ensure that businesses can settle on a payment plan and stretch out repayment in a way that suits their cash flow.
My pubs and brewers are pleased with the reduction in beer duty, but may we have clarification on keg size, as my small brewers ship their beer in different sizes, including 20-litre pins? May we also have an indication of when the changes to the small brewers relief will be announced, ideally removing the 2,000-hectolitre limit and the cliff-edge at the 5,000-hectolitre limit?
We are delighted that we are introducing the draft relief to support the on trade for people purchasing drinks in pubs and hospitality venues. We will consult on the details, including keg size. We will also bring forward the technical changes to small brewers relief, which my hon. Friend asks about.
The pretence has to stop. The Budget was climate-illiterate, with just £7.8 billion of new money given to climate and nature mitigation to reach the 2024 target, when £62.9 billion is required. How will the Chancellor close that gap, or is the Prime Minister’s performance at COP26 simply a façade?
The hon. Lady is not doing justice to what the Government have committed to. We have the £30 billion net zero strategy just the week before this fiscal event, and clearly we have had a number of announcements during COP already, including today’s on forests. That is clear evidence of how this Government are moving to ensure we double down on our international commitments and show the rest of the world the way to deliver on net zero.