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Topical Questions

Treasury – in the House of Commons on 24th March 2020.

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Photo of Joy Morrissey Joy Morrissey Conservative, Beaconsfield

If he will make a statement on his departmental responsibilities.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

We are facing an unprecedented challenge as a country, as a Government and as a society. The spread of the coronavirus has precipitated the extraordinary but necessary actions taken by this Government over the past week to protect people’s health and livelihoods and the economy we all rely on. There will be challenging times ahead, and despite the significant economic interventions that we have put in place, we will not be able to protect every single job or save every single business, but I am confident that the measures we have put in place will provide support to millions of people and businesses and ensure that we do get through this, get through it together, and emerge on the other side both stronger and more united.

Photo of Joy Morrissey Joy Morrissey Conservative, Beaconsfield

The start-up loan programme has been hugely successful in getting thousands of new businesses off the ground, particularly in my constituency of Beaconsfield. Does my right hon. Friend agree that the announcement that the programme will be extended is hugely welcome news for entrepreneurs right across the country?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is a champion for entrepreneurship in her constituency, and rightly so. The start-up loan programme is an excellent programme, providing grants of £25,000 for budding entrepreneurs. It has been operational for some years now and has provided almost 70,000 loans, putting to work more than half a billion pounds. It is absolutely right that, as we think about our future coming through the coronavirus, it will be the entrepreneurs of tomorrow who will help to create new jobs and drive the prosperity that we will all want to see.[This section has been corrected on 21 April 2020, column 1MC — read correction]

Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer

May I again welcome much of what the Chancellor is doing, and say that we wish to work with him as positively as we possibly can in this very difficult period? I just wish to return to the issue of zero-hours workers. The Chancellor said very clearly that this applies to all those who are on PAYE, and I welcome that, but the point that we have been making is that many of these zero-hours contract workers—in fact, most of them—are not on PAYE. They are called limb (b) workers, so the scheme does not apply to them. I understand that he is doing his best and I understand the complications, but he has also said that for zero-hours workers, employers may compensate on the basis of average hours worked. The unions in this field representing those workers have urged that this should be mandatory and applied to all zero-hours and variable-hours workers based on average earnings over the previous weeks. That is exactly how those workers’ holiday pay is calculated at the moment, and it is an accurate reflection of what they earn. We need some urgent action for this sizeable group of workers. There are at least nearly a million zero-hours workers, perhaps a million more.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

As we are putting in place the detailed guidance for the scheme, we are actively considering the question of how best to average the earnings of people in this situation. I very much take on board the suggestion that the right hon. Gentleman has made, and I know that my team are engaging with those unions as we speak to try to get the details right.

Photo of John Baron John Baron Conservative, Basildon and Billericay

I commend the Chancellor and his team for the robust policy response that we have seen to this crisis so far, but may I ask them to continue to focus laser-like on the issue of cash flow, which is particularly important to smaller businesses, particularly important to the workforce, and particularly important to the vulnerable groups in society? That issue of cash flow is probably the most important when it comes to determining employment, which is important to everyone in this Chamber and to the country at large.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is absolutely right about the importance of cash flow, which is why we have targeted our interventions specifically at smaller businesses by providing extra cash flow support. We have done so through the £10,000 grant to every business in receipt of small business rate or rural rate relief and, indeed, through the deferral of VAT, which starts from today for the quarter. As my right hon. Friend the Financial Secretary to the Treasury said earlier, that represents more than £35 billion, or 1.5% of GDP-worth of tax deferral, providing immediate cash-flow support. We have done the same thing for self-assessment payments that are due in the coming months and have also, as of yesterday, launched a business interruption loan scheme, which my hon. Friend has done fantastic work developing. It will provide 12-month interest-free loans to small businesses, again, to help provide them with the liquidity that they need to get through this.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth

I acknowledge that the Government are dealing with an incredible number of challenges at this time and pay tribute on behalf of all MPs to the work that has been done by Ministers, by those on the Front Benches and by the people behind the scenes who are supporting them in this work.

The financial challenges of families with children have not yet been specifically addressed, so will the Treasury listen to the Child Poverty Action Group and work with the Department for Work and Pensions on a fairly simple solution that will put money directly into the pockets of families with children, which is temporarily to increase child benefit?

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

I am very grateful to the hon. Lady for the suggestion, and we will certainly look closely at the Child Poverty Action Group’s recommendation.

Photo of Simon Baynes Simon Baynes Conservative, Clwyd South

On behalf of my constituents in Clwyd South, may I commend the Treasury team for its hard and speedy work over the past couple of weeks? Will my right hon. Friend confirm that this Government will stand behind businesses, small and large, in Clwyd South and elsewhere in Wales and the UK as the crisis progresses?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my hon. Friend for his comments and pay tribute to the work that he is doing to represent his constituents and make sure that his local businesses get the support that they need. I hope that his businesses welcome the various interventions that we have provided in terms of cash flow support, tax relief deferrals, and subsidised loans to help them get through this difficult period. If he has further ideas that he thinks we should consider, I would be very happy to talk to him further.

Photo of Kevan Jones Kevan Jones Labour, North Durham

Supply teachers play a vital role in our schools. Many thousands, including my constituent Ellie Atkinson, have found themselves out of work, so may I urge the Treasury to look at a way of supporting these vital workers, either with direct financial support or by ensuring that they can actually work in the schools that are being kept open?

Photo of Steve Barclay Steve Barclay The Chief Secretary to the Treasury

The right hon. Gentleman will know that school budgets have been allocated, so the schools already have that money to spend; that will not change. The announcement that the Chancellor has made about the PAYE system is about supporting people through that mechanism. If the right hon. Gentleman has other proposals, I am happy to engage with him to discuss them further.

Photo of Nicola Richards Nicola Richards Conservative, West Bromwich East

I welcome my right hon. Friend’s world-leading package of support to businesses. There are many charities and community care providers in West Bromwich East, including Sandwell Community Caring Trust, which are all working extremely hard to protect the vulnerable. I thank them, and all the teachers and frontline staff in my constituency. Will he confirm that all charities that pay through PAYE will be eligible for the scheme and relief package?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my hon. Friend for her support, and join her in paying tribute to Sandwell Community Caring Trust, which we will be relying on through this difficult period. I can confirm that charities are eligible for the job retention support programme. Further to that, we have allocated extra funding to the Ministry of Housing, Communities and Local Government to provide money to local charitable or caring organisations, especially to help those we are attempting to shield—the most vulnerable—in order to protect them against the effects of the coronavirus.

Photo of John Spellar John Spellar Labour, Warley

Yesterday in the Chamber, I and my right hon. Friend Liam Byrne raised the question of escalating prices in local shops and concerns about profiteering. We understand that the Competition and Markets Authority may be looking into this issue, but may I ask the Minister to urge it very rapidly to look at where this is taking place? Is it local shops, wholesalers or cash and carry, or suppliers? Is it even to do with the international market in terms of perishable goods? This is a matter of real concern. Once the Government have found out where the problem is, will they bring forward measures to crack down on this profiteering?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The right hon. Gentleman makes a very reasonable point, and sets out a range of issues. The Government will be looking into this, and I will liaise with my colleagues in the Department for Business, Energy and Industrial Strategy to ensure that they are focusing on all the dimensions of the problem that he has outlined.

Photo of Desmond Swayne Desmond Swayne Conservative, New Forest West

The Chancellor has been more creative and accommodating than his equivalents in any other jurisdiction. Setting aside the question of fairness, how practical is it to use historical tax data to try to impute a wage equivalent for the self-employed?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I thank my right hon. Friend for his comments. It is certainly possible to use those historical returns. They are a year and a half out of date, so they will be necessarily imperfect. They also do not provide an easy way to distinguish between those who are deserving of support and whose incomes are being affected by what is happening, and those who are much wealthier and whose incomes are potentially increasing currently, but they do provide a basis and a universe to look at.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

When I mentioned earlier that the universal credit system was overwhelmed, the Minister may not quite have taken on board the point I was raising. A self-employed worker sent me a screenshot of their attempts to use the system yesterday; 33,383 people were ahead of them in the queue to use the claims section of the website. Unless this is resolved, people who need money right now—limited though that money is under universal credit—simply will not be able to get hold of it through the system.

Photo of Steve Barclay Steve Barclay The Chief Secretary to the Treasury

The hon. Gentleman raises an important point about the pressure on the Department for Work and Pensions at this time. That is a key reason why the design of the schemes that we have been looking at and that have been put forward by the Chancellor do not add complexity and pressure on the DWP. We have been actively working on identifying where we can free up and reprioritise resource in DWP to assist with this issue. I have been discussing the matter with the Secretary of State for Work and Pensions, and working closely with her on it.

Photo of Henry Smith Henry Smith Conservative, Crawley

Obviously, airports and airlines are particularly adversely affected by the covid-19 situation.

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My hon. Friend is right, especially given his constituency, to highlight the importance of airlines and airports. They have been particularly impacted by what is happening. I am in active dialogue with the Secretary of State for Transport and expect to write soon on that matter.

Photo of Neale Hanvey Neale Hanvey Independent, Kirkcaldy and Cowdenbeath

In Kirkcaldy and Cowdenbeath and other constituencies, public service workers, not bankers or nuclear weapons, will get us through this crisis. We must therefore change our focus. Will the Chancellor consider whether the nurses, doctors and other public service workers, who will be doing double shifts and working extra hours to get us through, can get tax relief on those extra hours so that they are properly rewarded and recognised for their tremendous efforts?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

We pay tribute to our public sector workers, particularly those who are on the frontline of the NHS as we speak. We have said that we will make any and all funding available to the NHS to provide and support that workforce. That is exactly what we are doing, as my right hon. Friend the Chief Secretary outlined earlier. In the Budget, we specifically changed the taper relief, which was causing hours challenges for senior doctors and GPs. That was a significant fiscal intervention—we are providing more than £2 billion of tax relief to ensure that there is no disincentive for those senior clinicians to provide the extra work at this time.

Photo of Tobias Ellwood Tobias Ellwood Chair, Defence Committee, Chair, Defence Committee, Chair, Defence Sub-Committee, Chair, Defence Sub-Committee

The economic interventions that the Chancellor spoke about are greatly welcome in Bournemouth East. Will he join me in paying tribute to the armed forces for what they are doing and what they will do? We should all recognise that that is in addition to their day job of keeping the nation safe. What will happen in the spending review? Does my right hon. Friend agree that it is important that there is additional capacity for our armed forces so that they can deal with the threats that continue to exist, but also have the ability to step forward to help the nation in times of crisis?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

My right hon. Friend is absolutely right to highlight the importance of our armed services, and I join him in paying tribute to them for what they are doing, not just to keep us safe every day, but right now when we are calling on them to help us meet this public health emergency. As we speak, they are doing extraordinary work to help our healthcare system to respond to what is coming. We recognise that, and it will be recognised when we think about funding for the armed services not just today, but in the future.

Photo of Wes Streeting Wes Streeting Labour, Ilford North

One newspaper is already reporting that the Chancellor will implement an income protection scheme for the self-employed and make an announcement in the next 24 hours. I must say I got a slightly longer timescale from the Chancellor’s earlier reply, when he talked about the end of April. To come back to the point about reassurance, will he give some real reassurance now to those anxious self-employed people across the country that an announcement will be made very shortly?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

We hope to have something to say very shortly. Implementation will take longer for the reasons I outlined, when a good point was made about capacity, whether at HMRC or DWP, to deliver brand-new schemes. However, in terms of saying what we plan to do, hopefully we can do that relatively shortly. Implementation will take longer because of the clear delivery challenges that the scheme would pose.

Photo of Jacob Young Jacob Young Conservative, Redcar

I thank my right hon. Friend and the Treasury team for all their work to help people through this crisis. Will my right hon. Friend outline when employers can access the scheme for job retention scheme and furloughed workers?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

Detailed guidance is available. Further guidance will be provided and our aim is to build the new scheme so that it is operational by the end of April. That is a challenge. We are already working night and day to construct something from scratch, but claims will be allowed to be backdated to 1 March so that businesses have the security of knowing that the cash-flow rebate will be coming. As I have said, the aim is to have the scheme up and running so that the April payroll can be reimbursed through it.

Photo of Chris Matheson Chris Matheson Shadow Minister (Cabinet Office)

One of the problems with this crisis is that we do not know how long it is going to last. I have businesses in my constituency—events companies, conference companies and sporting companies—that have long lead-in times to organise their events, but they cannot cancel them yet and thereby claim insurance because there is no Government guidance. Do the Government have any plans to give guidance, particularly to the insurance companies and events companies, that will perhaps say, “No events for the next six months”?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

We are working closely with the insurance industry, and obviously events companies are underpinned by contractual obligations. We established that if they have cover relevant to non-specified diseases, the announcements by the Prime Minister and the Chancellor have triggered those policies to be paid out, but I am happy to look at any specific cases that individual Members want to bring to me, which I can take up with industry representatives.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

In the wake of the last economic crisis, when we needed the banks to stand on the side of small businesses, too often they did not, and many of us have seen too many examples of small businesses being bullied into bankruptcy. What can my right hon. Friend the Chancellor say about the posture he wants to see from the banks at this time?

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Chancellor and I have had dialogue with individual heads of high street banks. I have been speaking to the head of UK Finance this morning and will be convening a meeting of bank representatives later today. We anticipate that the banks should be taking the most sympathetic forbearance measures possible, and we have set out very clearly, as my right hon. Friend the Chancellor did, that the loan scheme is interest-free for the first 12 months, with no fees or repayment penalties. I expect the banks to step up to the mark, as I know they will. We have to remember that many of the people actually delivering this service in high street branches or in call centres are not very well paid and are working flat-out to deliver a key service to our nation at this time.

Photo of David Linden David Linden Shadow SNP Spokesperson (Housing, Communities and Local Government)

The message from the Prime Minister last night for our constituents to stay at home could not have been clearer, but many of our constituents who are staying at home will have increased energy bills as a result. Jamie Stone is co-ordinating a cross-party letter to the Government asking for a reduction in VAT on energy bills. Are they willing to look favourably upon that to support our constituents, who will have higher energy bills as a result of staying at home?

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

We are certainly very happy to look at whatever letter the hon. Gentleman or his colleagues on a cross-party basis may wish to present.

Photo of Stuart Anderson Stuart Anderson Conservative, Wolverhampton South West

I want to follow on from my right hon. and gallant Friend Mr Ellwood and talk about our great armed forces. I expressed my delight at the budget of £10 million identified for veterans’ mental health. Will the Chancellor confirm that that will remain a priority, as the problem does not go away?

Photo of Steve Barclay Steve Barclay The Chief Secretary to the Treasury

I am happy to give that assurance. I know my hon. Friend is a champion—rightly so—of our armed forces and speaks with great experience and authority on that. He will be aware of a number of measures that my right hon. Friend the Chancellor has announced. That is one of them, and we stand by it.

Photo of Kevin Brennan Kevin Brennan Shadow Minister (Digital, Culture, Media and Sport) (Arts and Heritage)

A couple of times in the context of the self-employed, the Chancellor has mentioned wealthy people whose incomes are increasing. That is not who we are talking about. We are talking about people who have lost their entire income overnight. Will he please provide some more reassurance that it is his intention to provide help to those people? Does he intend to say how he will do that very soon and say to the banks in the meantime that they should be extending credit on a free basis, on the basis of what he has promised, so that people can get on with their lives?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The hon. Gentleman illustrates exactly the issue with such a scheme. Looking at historical tax return data from a year and a half ago gives absolutely no guide as to whether someone today who is self-employed is prosperous, and indeed that their income may be increasing versus someone, who is not. Of course I am sympathetic to those whose situation is being adversely affected by what is going on. The issue is one of finding a way to target help at them, rather than having something that provides blanket cash subsidies to 5 million people, many of whom will not need it, which will end up costing all our constituents on modest incomes a considerable amount. It is about finding a way to target support for those who most need it, and that is what is requiring time and thought.

Photo of Mark Pritchard Mark Pritchard Conservative, The Wrekin

Will the Chancellor join me in thanking Shropshire Council and the hard-working people at Telford and Wrekin Council? Cash flow is becoming a real issue for many local councils, with many having to borrow. Could he encourage his officials in the Treasury to be a bit more flexible as to where finance can come from and the use of reserves?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

I am happy to look at specific suggestions. I pay tribute not only to my hon. Friend’s council but to all councils for the sterling work they are doing in delivering our grant schemes to many of their small local businesses. We are in dialogue already with the Ministry of Housing, Communities and Local Government, to ensure that councils’ cash-flow needs are adequately met. There are things we are doing actively in terms of the timing of the various grant payments we make, to ease some of the near-term cash-flow pressures.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

Can the Chancellor clarify whether the emergency cash grant scheme is intended to help per shop for businesses with more than one premise in different towns, or is it just for the business as a whole?

Photo of Rishi Sunak Rishi Sunak The Chancellor of the Exchequer

The detailed eligibility criteria are online and will be provided by local authorities. The grants of £10,000 are done on a per premise basis for businesses that are in receipt of small business rate relief and rural rate relief. There are larger grants for those in the retail, leisure and hospitality sector of up to £25,000. The Business Secretary has written already to local authorities, which are, as we speak, writing to businesses that are eligible for those grants to seek their bank details and start making cash payments as soon as is practically possible.