New Clause 19 - Taxation of coronavirus support payments

Finance Bill – in the House of Commons at 1:37 pm on 2nd July 2020.

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‘(1) Schedule (Taxation of coronavirus support payments) makes provision about the taxation of coronavirus support payments.

(2) In this section, and in that Schedule, “coronavirus support payment” means a payment made (whether before or after the passing of this Act) under any of the following schemes—

(a) the coronavirus job retention scheme;

(b) the self-employment income support scheme;

(c) any other scheme that is the subject of a direction given under section 76 of the Coronavirus Act 2020 (functions of Her Majesty’s Revenue and Customs in relation to coronavirus or coronavirus disease);

(d) the coronavirus statutory sick pay rebate scheme;

(e) a coronavirus business support grant scheme;

(f) any scheme specified or described in regulations made under this section by the Treasury.

(3) The Treasury may by regulations make provision about the application of Schedule (Taxation of coronavirus support payments) to a scheme falling within subsection (2)(c) to (f) (including provision modifying paragraph 8 of that Schedule so that it applies to payments made under a coronavirus business support grant scheme).

(4) Regulations under this section may make provision about coronavirus support payments made before (as well as after) the making of the regulations.

(5) In this section, and in that Schedule—

“coronavirus” and “coronavirus disease” have the meaning they have in the Coronavirus Act 2020 (see section 1 of that Act);

“coronavirus business support grant scheme” means any scheme (whether announced or operating before or after the passing of this Act), other than a scheme within subsection (2)(a) to (d), under which a public authority makes grants to businesses with the object of providing support to those businesses in connection with any effect or anticipated effect (direct or indirect) of coronavirus or coronavirus disease;

“the coronavirus job retention scheme” means the scheme (as it has effect from time to time) that is the subject of the direction given by the Treasury on 15 April 2020 under section 76 of the Coronavirus Act 2020;

“the coronavirus statutory sick pay rebate scheme” means the scheme (as it has effect from time to time) given effect to by the Statutory Sick Pay (Coronavirus) (Funding of Employers’ Liabilities) Regulations 2020 (S.I. 2020/512);

“employment-related scheme” means the coronavirus job retention scheme or the coronavirus statutory sick pay rebate scheme;

“the self-employment income support scheme” means the scheme (as it has effect from time to time) that is the subject of the direction given by the Treasury on 30 April 2020 under section 76 of the Coronavirus Act 2020.

(6) Examples of coronavirus business support grant schemes as at 24 June 2020 include—

(a) the small business grant fund that is the subject of the guidance about that scheme and the retail, hospitality and leisure grant fund published by the Department for Business, Energy & Industrial Strategy on 1 April 2020;

(b) the retail, hospitality and leisure grant fund that is the subject of that guidance;

(c) the local authority discretionary grants fund that is the subject of the guidance about that scheme published by the Department for Business, Energy & Industrial Strategy on 13 May 2020;

(d) the schemes corresponding to the small business grant fund, retail and hospitality grant fund and local authority discretionary grants fund in Scotland, Wales and Northern Ireland.”—(Jesse Norman.)

This new clause introduces Schedule (Taxation of coronavirus support payments) and provides for definitions of the various coronavirus related support schemes to which it applies. It also allows for secondary legislation to specify further schemes to which the Schedule will apply, as well as to modify the effect of the Schedule in relation to particular schemes.

Brought up, and read the First time.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

With this it will be convenient to discuss the following:

Government new clause 20—Protected pension age of members re-employed as a result of coronavirus.

Government new clause 21—Modifications of the statutory residence test in connection with coronavirus.

Government new clause 22—Future Fund: EIS and SEIS relief. Government new clause 23—Interest on unpaid tax in case of disaster etc of national significance.

Government new clause 24—Exceptional circumstances preventing disposal of interest in three year period.

Government new clause 25—HGV road user levy. Government new clause 32—Enterprise management incentives: disqualifying events. Government new schedule 1—Taxation of coronavirus support payments.

New clause 29—Review of impact of Act on poverty—

‘(1) The Chancellor of the Exchequer must conduct an assessment of the impact of this Act on poverty and lay this before the House of Commons within six months of Royal Assent.

(2) This assessment must consider—

(a) the impact on absolute poverty,

(b) the impact on relative poverty, and

(c) whether such a study should in future be a regular duty of the Office for Budget Responsibility.’

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on poverty and consider whether the OBR should conduct such assessments as a regular duty.

New clause 10—Impact of provisions of the Act on child poverty—

‘(1) The Chancellor of the Exchequer must review the impact of the provisions of this Act on child poverty and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider the impact on—

(a) households at different levels of income,

(b) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,

(c) different parts of the United Kingdom and different regions of England, and

(d) levels of relative and absolute child poverty in the United Kingdom.

(3) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.’

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on child poverty.

New clause 3—Review of changes to capital allowances—

‘(1) The Chancellor of the Exchequer must review the effect of the changes to chargeable gains with respect to corporate capital losses in this Act in each part of the United Kingdom and each region of England and lay a report of that review before the House of Commons within two months of the passing of this Act.

(2) A review under this section must consider the effects of the changes on—

(a) business investment

(b) employment, and

(c) productivity.

(3) A review under this section must consider the effects in the current and each of the subsequent four financial years.

(4) The review must also estimate the effects on the changes in the event of each of the following—

(a) the UK leaves the EU withdrawal transition period without a negotiated comprehensive free trade agreement,

(b) the UK leaves the EU withdrawal transition period with a negotiated agreement, and remains in the single market and customs union, or

(c) the UK leaves the EU withdrawal transition period with a negotiated comprehensive free trade agreement, and does not remain in the single market and customs union.

(5) The review must also estimate the effects on the changes if the UK signs a free trade agreement with the United States.

(6) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause requires a review of the impact on investment, employment and productivity of the changes to chargeable gains with respect to corporate capital losses over time; in the event of a free trade agreement with the USA; and in the event of leaving the EU without a trade agreement, with an agreement to retain single market and customs union membership, or with a trade agreement that does not include single market and customs union membership.

New clause 6—General anti-abuse rule: review of effect on tax revenues—

‘(1) The Chancellor of the Exchequer must review the effects on tax revenues of section 99 and Schedule 14 and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) The review under sub-paragraph (1) must consider—

(a) the expected change in corporation and income tax paid attributable to the provisions in this Schedule; and

(b) an estimate of any change, attributable to the provisions in this Schedule, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.

(3) The review under subparagraph (2)(b) must consider taxes payable by the owners and employees of Scottish Limited Partnerships.’

This new clause would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of Clause 99 and Schedule 14, and in particular on the taxes payable by owners and employees of Scottish Limited Partnerships.

New clause 7—Call-off stock arrangements: sectoral review of impact—

‘(1) The Chancellor of the Exchequer must make an assessment of the impact of section 79 on the sectors listed in (2) below and lay a report of that assessment before the House of Commons within six months of the passing of this Act.

(2) The sectors to be assessed under (1) are—

(a) leisure,

(b) retail,

(c) hospitality,

(d) tourism,

(e) financial services,

(f) business services,

(g) health/life/medical services,

(h) haulage/logistics,

(i) aviation,

(j) transport,

(k) professional sport,

(l) oil and gas,

(m) universities, and

(n) fairs.’

This new clause would require the Government to report on the effect of Clause 79 on a number of business sectors.

New clause 8—Review of effects on measures in Act of certain changes in migration levels—

‘(1) The Chancellor of the Exchequer must review the effects on the provisions of this Act of migration in each of the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.

(2) Those scenarios are that—

(a) the UK leaves the EU withdrawal transition period without a negotiated future trade agreement,

(b) the UK leaves the EU withdrawal transition period following a negotiated future trade agreement, and remains in the single market and customs union, and

(c) the UK leaves the EU withdrawal transition period following a negotiated trade agreement, and does not remain in the single market and customs union.

(3) In respect of each of those scenarios the review must consider separately the effects of—

(a) migration by EU nationals, and

(b) migration by non-EU nationals.

(4) In respect of each of those scenarios the review must consider separately the effects on the measures in each part of the United Kingdom and each region of England.

(5) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.’

This new clause would require a Government review of the effects on measures in the Bill of certain changes in migration levels.

New clause 9—Review of effects on migration of measures in Act—

‘(1) The Chancellor of the Exchequer must review the effects on migration of the provisions of this Act in each of the scenarios in subsection (2) and lay a report of that review before the House of Commons within one month of the passing of this Act.

(2) Those scenarios are that—

(a) the UK leaves the EU withdrawal transition period without a negotiated future trade agreement

(b) the UK leaves the EU withdrawal transition period following a negotiated future trade agreement, and remains in the single market and customs union, and

(c) the UK leaves the EU withdrawal transition period following a negotiated trade agreement, and does not remain in the single market and customs union.

(3) In respect of each of those scenarios the review must consider separately the effects on—

(a) migration by EU nationals, and

(b) migration by non-EU nationals.

(4) In respect of each of those scenarios the review must consider separately the effects in each part of the United Kingdom and each region of England.

(5) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland; and “regions of England” has the same meaning as that used by the Office for National Statistics.”

This new clause would require a Government review of the effects of the measures in the Bill on migration levels.

New clause 11—Assessment of equality impact of measures in Act—

‘(1) The Chancellor of the Exchequer must lay before the House of Commons a report assessing the effects on equalities of the provisions of this Act within 12 months of the passing of this Act.

(2) The review must make a separate assessment with respect to each of the protected characteristics set out in section 4 of the Equality Act 2010.

(3) Each assessment under (2) must report separately on the effects in in each part of the United Kingdom and each region of England.

(4) In this section—

“parts of the United Kingdom” means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

“regions of England” has the same meaning as that used by the Office for National Statistics.’

This new clause would require the Chancellor of the Exchequer to review the impact of the Bill on equalities.

New clause 15—Sectoral review of impact of Act—

‘(1) The Chancellor of the Exchequer must make an assessment of the impact of this Act on the sectors listed in (2) below and lay a report of that assessment before the House of Commons within six months of Royal Assent.

(2) The sectors to be assessed under (1) are—

(a) leisure,

(b) retail,

(c) hospitality,

(d) tourism,

(e) financial services,

(f) business services,

(g) health/life/medical services,

(h) haulage/logistics,

(i) aviation,

(j) transport,

(k) professional sport,

(l) oil and gas,

(m) universities, and

(n) fairs.’

This new clause would require the Government to report on the effect of the Bill on a number of business sectors.

New clause 16—Review of effect of Act on tax revenues—

‘(1) The Chancellor of the Exchequer must review the effects on tax revenues of the Act and lay a report of that review before the House of Commons within six months of Royal Assent.

(2) The review under (1) must contain an estimate of any change attributable to the provisions in this Act in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.

(3) The estimate under (2) must report separately on taxes payable by the owners and employees of Scottish Limited Partnerships.’

This new clause would require the Chancellor of the Exchequer to review the effect on public finances, and on reducing the tax gap, of the Bill; and in particular on the taxes payable by owners and employees of Scottish Limited Partnerships.

New clause 30—Review of rates of air passenger duty—

‘(1) The provisions of section 88 shall not come into effect until the Treasury has carried out and published a review of the likely effect of changes to rates of air passenger duty on the aviation sector.

(2) The review must take into account the effects of Covid-19 on the sector.

(3) The review must be published no later than 1 October 2020.’

This new clause would require that the changes to APD in clause 88 not come into force until a review of the effect of changes to APD has been published by the Treasury.

Amendment 2, in clause 80, page 68, line 2, at end insert—

‘(3) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the Alcoholic Liquor Duties Act 1979 by this Section and lay a report of that review before the House of Commons within one year of the passing of this Act.’

This amendment would require the Government to review the impact of the proposed changes to alcohol liquor duties on public health.

Amendment 3, in clause 81, page 68, line 21, at end insert—

‘(3) The Chancellor of the Exchequer must review the expected effects on public health of the changes made to the TPDA 1979 by this Section and lay a report of that review before the House of Commons within one year of the passing of this Act.’

This amendment would require the Government to review the expected impact of the revised rates of duty on tobacco products on public health.

Amendment 4, in clause 86, page 73, line 20, after “supplies” insert “, including human breastmilk”

This amendment would ensure that vehicles carrying human breastmilk would benefit from the exemption from Vehicle Excise Duty.

Amendment 5, page 77, line 10, leave out Clause 95

Amendment 6, in clause 95, page 77, line 14, at end insert—

‘(2) The Government must lay before the House of Commons by 9 September 2020 a statement of the conditions under which it would consider it appropriate to vary rates of import duty under this Section.’

This amendment would require the Government to state the conditions under which it would consider it appropriate to vary rates of import duty in an international trade dispute.

Amendment 7, page 77, line 14, at end insert—

‘(2) No regulations under this section may be made unless a draft has been laid before and approved by a resolution of the House of Commons.’

This amendment would require the Government to seek the approval of the House before making regulations varying rates of import duty in an international trade dispute.

Amendment 8, page 77, line 14, at end insert—

‘(2) The Chancellor of the Exchequer must, no later than a month before any exercise of the power in subsection (1), lay before the House of Commons a report containing the following—

(a) an assessment of the fiscal and economic effects of the exercise of the powers in subsection (1);

(b) a comparison of those fiscal and economic effects with the effects of the UK being within the EU Customs Union;

(c) an assessment any differences in the exercise of those powers in respect of—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland; and

(d) an assessment of any differential effects in relation to the matters specified in paragraphs (a) and (b) between—

(i) England,

(ii) Scotland,

(iii) Wales, and

(iv) Northern Ireland.’

This would require a review of the economic and fiscal impact of the use of the powers in clause 95 including comparing those effects with EU Customs Union membership.

Amendment 9, in clause 96, page 77, line 26, after “tax” insert

‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 10, page 77, line 27, after “deduction”, insert

‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 11, page 78, line 11, after “tax”, insert

‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 12, page 78, line 12, after “deduction”, insert

‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 13, page 78, line 35, after “tax”, insert

‘which is due at the relevant date from the debtor and which became due in the 12 months immediately preceding that date, and/’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 14, page 78, line 36, after “deduction”, insert

‘from a payment made by the debtor in the period of 12 months immediately preceding the relevant date.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

Amendment 15, page 79, line 10, at end insert—

‘(8) The amendments made by this section do not apply to any debt secured by a floating charge in respect of monies were advanced to the debtor before 1 December 2020.’

This amendment seeks to limit the extent of HMRC’s status as a preferential creditor in insolvencies by preventing the policy from being applied retrospectively and by limiting that preference to only those taxes which became due in the 12 months before the relevant date as given in the Bill (1st December 2020).

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

The Government have tabled eight new clauses to the Bill, the majority of which are in response to the covid-19 pandemic. I would like to start by offering Members an explanation for why these new clauses are being brought forward on Report. The Government have been working very hard to combat the pandemic, as the House will know, and these measures are just a small part of a much more extensive and wide-ranging response. I am sure that colleagues across the House will appreciate that Ministers and civil servants have been working in extraordinary circumstances in the past three months. As I often do, I again pay great tribute to officials at the Treasury and Her Majesty’s Revenue and Customs. Without their work, it would not have been possible to deliver many, if any, of these aspects of this extremely comprehensive response, let alone in such a rapid timeframe as, for example, with the coronavirus job retention scheme.

We have brought forward these new clauses at the earliest possible opportunity, and for technical reasons, it is on Report. We have also been slightly limited by the fact that to table each new clause requires a new Ways and Means resolution to be agreed by the House. Report was the first amendable stage of the Bill to take place after the Government had been able to agree the necessary Ways and Means resolution on the Floor of the House. I hope the House will agree that there is a clear need for each of these new clauses to stand part of the Bill.

I will touch on each new clause briefly. New clause 19 seeks to do two things. First, it confirms that grants made under covid-related schemes—for example, the furlough scheme, the self-employment scheme, the small business grant fund, the retail, hospitality and leisure grant fund, the local authority discretionary grant fund and schemes corresponding to those grants within the devolved Administrations—are subject to tax. The new clause also includes a delegated power to add or remove further grant schemes through a statutory instrument, which provides sensible flexibility, so that the Government can continue to support the economy in their response to the pandemic.

The second part of the new clause ensures that HMRC has appropriate and proportionate compliance and enforcement powers in relation to the furlough scheme and the self-employment income support scheme. To ensure that taxpayer money is going only to those who are eligible, the new clause gives HMRC powers to recover overpayments and to impose penalties where there is deliberate non-compliance. HMRC has given a clear undertaking that these powers will not be used to penalise taxpayers who may be going through difficult times but make honest mistakes in their applications. As previously stated, the powers are designed to be proportionate, and they balance the fact that we are in unprecedented and uncertain times with the need to ensure that HMRC has sufficient powers to enforce the schemes according to eligibility criteria set out and to protect the Exchequer.

New clause 20 seeks to mitigate potential pensions impacts for those with a protected pension age returning to work to help in the battle against the pandemic. Its purpose is to provide certainty for those people by temporarily suspending rules that would otherwise see the pension income of recently retired people reduced if they were to return to work in crucial workforces at this important time. These retirees have been and will remain critical to the Government’s response to covid, and this new clause temporarily removes restrictions that might impede a flexible response.

New clause 21 temporarily relaxes the statutory residence test so that highly-skilled individuals from across the world are not discouraged from coming to the UK and helping this country to respond to the unprecedented health emergency. The actions and presence of normally non-resident individuals in the UK could have inadvertently affected their tax residence status. The measure is to be restricted, however, to ensure that it applies only between 1 March and 1 June 2020 for time spent in the UK by individuals who worked specifically on coronavirus disease-related activities in specified sectors. That time will not count towards the residence test.

I turn to new clause 22, much loved by my hon. Friend Kevin Hollinrake, who is not in his place. It modifies the current enterprise investment scheme and seed enterprise investment scheme so that individuals who made EIS and SEIS investments before a future fund investment in the same company will not lose relief on those previous investments when the future fund loan converts into shares or is repaid. As the House will know, those schemes were intended to encourage investment in smaller, higher-risk trading companies by offering tax reliefs to individual investors who subscribe for new shares in qualifying companies. The Government announced the future fund as part of its business package in response to covid-19. Current EIS and SEIS legislation means that some future fund investors who have used those schemes for previous investments in the same company might lose their reliefs, depending on how and when the loan converts. The new clause intends to ensure that those investors do not lose that relief as a result of investing in the future fund to support innovative UK companies that may have difficulty raising finance during this period.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses) 1:45 pm, 2nd July 2020

May I press the Minister on innovative companies getting a lack of support from HMRC? I have come across a case in my constituency where a very innovative British company appears to have had a lack of support from the agency. Would he look into that for me?

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

I am grateful to the hon. Gentleman for his question. As the House will be aware, HMRC is often responsive and generally extremely responsive to such issues. I will happily look at any correspondence he wants to send me, and I will ensure that there is a properly engaged response to the extent that my limited powers over HMRC permit me. I hope that will be effective.

New clause 23 enables the Treasury to specify in an order made under section 135 of the Finance Act 2008 which payments of tax and other liabilities will not attract late payment interest or surcharge as a result of being deferred by agreement during a period of national disaster or emergency. It also enables the Treasury to set specific relief periods for different deferred taxes or liabilities. As the House will know, the Government have announced an unprecedented package of economic support for businesses and individuals affected by covid. The new clause ensures that late payment interest that would normally accrue automatically where tax is paid late does not apply, supporting taxpayers further and in ways in which I am sure the whole House will support. The payment deferral for VAT that we have announced provides taxpayers with a much-needed cash flow boost. HMRC is using its existing powers as set out in the Commissioners for Revenue and Customs Act 2005 to defer those payments of tax.

New clause 24 allows a refund of the additional 3% higher rate of stamp duty where exceptional circumstances prevented the sale of the previous main residence in the three-year window within which a sale must ordinarily take place. The new clause applies to those whose refund window ended on or after 1 January 2020. It is to ensure that responsible actions taken by people do not lead to negative tax implications and that those who would otherwise have received a stamp duty land tax refund are still able to receive it, despite the pandemic.

New clause 25 suspends the heavy goods vehicle road user levy for a period of 12 months, cutting fixed operational costs to the logistics and haulage industries as the economy begins to recover from the pandemic. These industries support many other industries, and temporarily easing their financial burden will support the haulage sector, reducing fixed costs as the economy recovers over time.

I turn finally to new clause 32, which makes minor changes to the existing enterprise management incentives legislation, introducing a time-limited exception to the disqualifying event rule so that EMI option holders who can no longer meet the EMI working time requirement due only to the pandemic are not forced to forfeit their options or to exercise them earlier than planned. This has the effect of protecting employees furloughed under the coronavirus job retention scheme or who have taken unpaid leave and had their working hours reduced. The measure means that affected employees will not forfeit their options or be forced to exercise them within the statutory 90 days normally required.

Since the point of EMI schemes is to help high-growth small and medium-sized enterprises recruit and retain skilled employees by giving them tax-advantaged share options, I am sure the House will understand that the measure supports a very important sector that is also likely to be important to our recovery. The changes will be effective from 19 March to ensure that employees who were furloughed or had to reduce their hours do not lose out. I hope the House will accept the need for the new clauses in these highly uncertain and unusual times. I commend them to the House.

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

I thank the Financial Secretary for making the case for the Government’s new clauses this afternoon. Throughout the coronavirus pandemic, the Labour party has made clear as the official Opposition that we seek to work constructively with the Government in response to this unprecedented public health crisis which, as we have seen, has brought about an economic crisis to follow it. In that spirit, and to ensure the smooth passage of legislation, we have helped to expedite the progressive measures taken by the Government, and this afternoon will be no exception.

I wish to speak to new clause 29, which has been tabled in the name of my hon. Friend Anneliese Dodds, the shadow Chancellor, and other hon. and right hon. colleagues. Yesterday afternoon, I addressed the Government’s poverty of ambition on climate change. This afternoon, I want to address their poverty of ambition on tackling poverty itself.

The Conservative party has now been in government either alone or in coalition for a decade. Over the past 10 years, their record on poverty in this country and on tackling poverty in this country has been absolutely lamentable. According to the Government’s own Social Mobility Commission, 600,000 more children are now living in relative poverty than in 2012, and that is projected to increase further due to benefit changes and the obvious economic impact of covid-19. As of 20 February this year, some 14 million people were in poverty, according to the Joseph Rowntree Foundation, including 2 million pensioners and 4 million children. We know that the impacts of poverty are felt disproportion- ately among different communities. Children from black and minority ethnic groups, for example, are more likely to be in poverty, with 45% of BAME children living in poverty, as compared with 26% of children in white British families.

We believe that the Government are failing on something that should be the most basic of priorities for any Government. That is not just our view as the Opposition party; the Government’s own Social Mobility Commission has said:

“The government should be more proactive in addressing poverty overall.”

It is worth bearing in mind that behind every statistic is a child, and 30 years ago I was one of those children in the child poverty statistics, growing up on a council estate in London’s east end, sandwiched between the bright lights of the City of London and the glistening lights of what was then the blossoming London Docklands Development Corporation land, which has become Canary Wharf. Today, they are two global financial centres at the centre of our global city. In between is a vista of poverty that was bad then and remains bad now.

One of the things I find most frustrating about the experience I had growing up in a council flat in the east end in the 1980s is that I look back, and I think about the conditions of the council flat I lived in and the embarrassment of not wanting to bring friends home from school because the conditions were not ones that we were proud of. It was a source of shame and embarrassment. I think about the experience of relying on free school meals, and the stigma that arises from having to collect a dinner ticket while other children go and pay for their food quickly—and get the best food, I hasten to add, while handing over their cash. I think about the difficulties my mum had as a single mum, balancing the challenge of bringing up a child while relying on the benefits system, and having to make compromises in choosing how she spent the family budget: the choice between putting food in the fridge or some extra money in the electricity meter.

One of the things that makes me most angry is that, when I think about my experience, which I thought was bad in the 1980s, and compare it with that of children growing up in the same circumstances today, as seen in my own constituency casework, things have got worse for children in the decades following my childhood, when things ought to be getting better. Whereas I had the stability of a council flat—albeit not a nice one—and a roof over my head, children in my constituency today, and no doubt in those of so many others across the Chamber, are growing up in temporary bed-and-breakfast accommodation, being moved from pillar to post and living in substandard accommodation, with disruptive consequences for their education and their schooling, and the inability for them to form lasting friendships and for their families to build supportive networks and family relationships.

When I think about the enormous strides that were made, particularly by the last Labour Government, in tackling educational disadvantage, I think it is outrageous that, in this country in the 21st century, children still today arrive at school at the age of five with their life chances already limited and in many cases predetermined, because we failed to get early years right. Sure Start centres have closed, and the support for families is no longer there. As a result, children arrive at school, at five, less prepared than their peers from more affluent backgrounds. It makes me angry that, for all the difference made to my education through programmes under the last Labour Government and the impact they have had on children since—the London Challenge and Excellence in Cities—today children are leaving school at 16 at a time when the attainment gap between children from the most advantaged backgrounds and the least advantaged backgrounds is actually widening, and where the further education system in which many working-class young people go on to study has been described by the Government’s own Social Mobility Commission as “undervalued and underfunded”. This is at a time when the changing nature of our economy and the changing nature of the world of work make post-16 adult education delivered in further education settings more important, not less. We should be making progress, but we are in reverse gear.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses)

My hon. Friend is making an extremely powerful speech, which focuses us, as we should be, on this vital issue. Does he agree with me that a central part of the problem many families face is that the costs of food and of rent have risen so dramatically, with the impossibility of being able to afford a home? In my constituency in Reading, it is very difficult for many people to get on to the housing ladder. Many young professionals and young families are crammed into flats, which are hugely expensive. They are also suffering huge problems with the high cost of food. Does he agree with me that this is a very significant part of the problem?

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

I strongly agree with my hon. Friend, and that brings me neatly on to the next point I was about to make about employment conditions in our country. For my mum, as a single mum, it was difficult to hold down a steady, stable job and often she was reliant on temporary, casual, low-paid work to help make ends meet. Looking at the picture in the labour market—and this was pre-pandemic—even in households where one or both parents are working, children are still growing up in poverty. As my hon. Friend said, over the last decade we have seen the bills going up, but the wages failing to follow.

We have also seen labour market conditions that mean that, even when people are doing the right thing, as the vast majority of people want to do—going out to work, often with two, three or even four jobs in a week, and working all the hours God sends to try to make ends meet—they are still unable to make ends meet. It should never be the case, especially in a country with the wealth and opportunity available here, that when someone goes to work and puts in a full week’s work, at the end of the day they still do not have enough to make ends meet. Things are likely to become even more challenging in the wake of the economic fallout from coronavirus. Unemployment statistics from recent months have been not only jaw dropping but unprecedented, and the pace at which our economy has collapsed as a result of the necessary shutdown has been astonishing. I welcome and recognise the steps that the Chancellor has taken to try to protect people’s incomes, but unless he goes further than he has already announced, many people will face greater poverty and hardship later this year.

Against that bleak backdrop, I would expect any reasonable Prime Minister with the right priorities, or any Prime Minister with their heart in the right place, or the faintest understanding of what life is like for most people in this country, to make tackling poverty a top priority. This Prime Minister, however, does not even know in which direction the poverty numbers are going. I do not expect him to have instant recall of month-by-month poverty data, although if I were Prime Minister I would ensure that those numbers were on a dashboard that I looked at every morning, but he did not even know that on his watch, and that of his predecessors, child poverty in this country has been rising. I think that is negligent, but having followed him closely during his time as Mayor of London, his lack of attention to detail, and lack of grip on Government, does not come as a surprise.

That brings me to our Chancellor, who many people believe to be a more impressive political figure and leader than the Prime Minister—that is certainly the talk of the Tories in the Tea Room. It remains to be seen, however, whether this Chancellor, who says that he will do whatever it takes to get the country through the pandemic, is also prepared to do whatever it takes to tackle poverty in our country. We know it can be done; we know the difference that political leadership can make. We know what happens when a Prime Minister wakes up every day and thinks, “What can I do today to make the country a fairer, more equal and just society?”, because we saw that under the previous Labour Government.

In 1999, Tony Blair promised to end child poverty within a generation, and the Government set ambitious targets to halve child poverty by 2010, and eliminate it by 2020. When that Labour Government left office, they left to the Conservative-led Government who followed an inheritance and track record that put them on course to achieve that target. The year 2020 will be remembered in the history books as the year of the covid-19 pandemic, but it should also be remembered as the year when this country, one of the richest in the world, ought to have achieved its target to end child poverty.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 2:00 pm, 2nd July 2020

the hon. Gentleman is making a powerful speech, but he did not say whether the Blair Government hit their target of halving child poverty by 2010. Did they or not?

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

I am delighted that the Minister asked that question, because I am about to lay out, in full, the record of the previous Labour Government. According to the London School of Economics and its Centre for Analysis of Social Exclusion, by the end of the new Labour Government’s period in office, child poverty and pensioner poverty had fallen considerably, in circumstances where child poverty would have risen without those reforms, and pensioner poverty would have fallen less far. In terms of absolute poverty, child poverty fell by more than 2 million from 1997-98 to 2009-10, and pensioner poverty fell by almost 3 million in the same period. In terms of relative poverty, child poverty fell by 800,000 between 1997-98 and 2009-10, and the number of pensioners in relative poverty fell by more than 1 million in the same period.

That Labour Government oversaw an £18 billion annual increase in spending on social security for families with children, as well as an £11 billion rise in payments for pensioners by 2010. Those rises were supported by other anti-poverty policies, including Sure Start, the national minimum wage, increased childcare support, and increases in education spending, which rose from £56 billion in 1996-97, to £103 billion in 2009-10—a real-terms increase of 83%. The last Labour Government pretty much eradicated homelessness and made ending insecure housing a priority, reducing the number of households in priority need of housing from 135,000 in 2003-04 to just 40,000 in 2009. They pursued the decent homes standard to boot, ensuring that children were growing up in far better conditions than I did. That is a record to be proud of—a record of a Government who got their priorities right.

It took a celebrity footballer to get this Government to do the right thing on something as basic as ensuring that children who would otherwise have gone hungry were fed this summer. It is not just that the Government do not have their head in the right place; they do not have their heart in the right place either. Unfortunately, we cannot rely on Marcus Rashford being on speed dial to get the Prime Minister to do the right thing on every occasion, and we cannot rely on the Chancellor to do the right thing on every occasion either. That is why it is important, as we have laid out in new clause 29, that we ensure that what counts is what is measured.

New clause 29 would require the Chancellor to conduct a review of the impact of this Bill—no doubt, very soon, this Act—on poverty in the United Kingdom. As with the Government’s environmental ambitions, I doubt that this Bill will move the dial on poverty much, if at all.

The Government’s own Social Mobility Commission has asked for the Office for Budget Responsibility to conduct assessments of all the fiscal statements that it usually does, but this time to look at child poverty and anti-poverty measures in particular. I urge Ministers to look carefully at this issue again. We raised it in Committee and were not successful in persuading the Minister of the case then, but I hope that we can persuade him of the case now. If Treasury Ministers and officials know that the OBR will be looking at those numbers in the same way that it does the other numbers in its assessments of Government fiscal events, perhaps it will concentrate the minds of people in the Treasury to get their priorities right.

Next week, the Chancellor will be coming before the House to deliver an economic update. After the Prime Minister’s statement this week, I think he needs to do a lot better than his apparent boss did when making a speech that was trailed as a new deal. It was not a new deal. Its ambitions were modest and much of the content was re-announcement. It certainly was not a green new deal. Perhaps when the Chancellor here next week, he can do the opposite of the Prime Minister. The Prime Minister over-promised and under-delivered. Given the way in which the economic update has been trailed, perhaps the Chancellor can under-promise and over-deliver next week, because he has a golden opportunity in the wake of this crisis to think seriously and substantially about the way in which our economy works and whose interests it serves.

I hope that when he comes forward next week, he does so with the full Budget that the shadow Chancellor has called for—a back-to-work Budget that is focused on jobs, jobs, jobs, that can actually tackle the gross inequalities and injustices of our society, and that puts us back on track to eradicate child poverty within a generation and to eradicate poverty for everyone because, for all the challenges of the last decade and all the challenges that we are living through now, this remains one of the wealthiest countries in the world.

This also happens to be a great country that is full of opportunities for so many people—in education, industry, arts, science and imagination—but those opportunities are not available to everyone. That should keep Ministers awake at night. It keeps me awake at night. But having listened to our Prime Minister only weeks ago in this Chamber, when it comes to tackling child poverty in this country, I do wonder whether his heart is really in it at all.

Photo of Graham Brady Graham Brady Chair, Conservative Party 1922 Committee

I am grateful for the opportunity to speak to new clause 30, which stands in my name, that of my right hon. Friend Mrs May and of a former aviation Minister, as well as of other Members who understand the crucial role of the aviation sector in bringing a very large amount of employment and prosperity to our constituents—in my case I represent an area immediately adjacent to Manchester airport, and my right hon. Friend has many constituents who work at Heathrow airport—and the wider impact of the aviation sector on the British economy and the way it drives growth and opportunity in our country.

The deficiencies of air passenger duty are well known, and this is an argument that has gone on for many years. It was introduced originally under the guise of being an environmental duty or tax. In fact, it has simply been a way of driving revenue. It is, by now, the highest tax of its sort anywhere in the world. In normal times, it is a drag on the development of new routes and connections around the world and a particular problem for regional airports, which find it harder to establish those new, especially long haul routes. Crucially, air passenger duty takes no account whatever of emissions or the environmental impact of an aircraft, a class of aircraft or a flight.

New clause 30 seeks to ensure that a review should be held—and held quickly, to be published within three months, by 1 October—of the likely effect of changes in air passenger duty rates on the aviation sector. The Bill as it stands only provides the capacity for Ministers to increase rates of air passenger duty, but it is critical that we look wider than that at the possible benefits that could come from reductions or a suspension. That is particularly important, of course, in the context of the covid-19 pandemic and the Government’s response to it.

The House will know that the aviation sector, along with hospitality and leisure, is among the hardest hit sectors of all. The effect on aviation has been exacerbated by Foreign Office guidance, which still advises against all but essential overseas travel, and in the past few weeks or so by the implementation of a blanket quarantine proposal, a policy which I hope will come to an end in the very near future with the announcement of a large list of so-called air bridges, which I think the industry expects might take place tomorrow.

The effect over the last few months of both the pandemic itself and policy in relation to the pandemic has been chilling for the aviation sector. The House is well aware of the very large number of jobs that have already been lost in the aviation sector in recent weeks and months, and there is little doubt it will take a long time for aviation to come back to the state of health that it previously enjoyed. While this is by way of a probing new clause, I say to the Minister on the Treasury Bench that the real purpose of it perhaps is simply to flag the importance of this issue prior to the fiscal event or the statement that will be made next week by the Chancellor. I am sure the Minister is well aware of the principle set out by Colbert, who said:

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

The danger at the moment is that far from being an easy source of revenue for Government, air passenger duty, if it remains unreformed in the coming weeks and months, risks killing the goose rather than allowing the Government to extract the feathers.

I hope that the Chancellor will, before his statement, look seriously at the case for a temporary reduction or suspension of air passenger duty to assist the aviation sector to get back to where it should be. This is an opportunity to see the wider economic benefits that could come by achieving greater connectivity for our aviation sector, and particularly for regional airports. It would also be an opportunity to look at whether at the end of such a period of suspension an improved regime might be introduced that seeks to reward more sustainable aviation rather than simply to extract revenue for each passenger who flies.

As I draw my remarks to a close, I think of the Prime Minister’s speech earlier in the week, in which he flagged up the importance of more sustainable aviation and the Government’s drive to make sure that Britain develops the first long-haul carbon-neutral passenger aircraft. This should be an opportunity for the Government to look at a new type of air passenger duty or a new way of taxing the sector that actually rewards and encourages better performance in environmental terms—lower emissions—and therefore helps to power investment in technological advances of that sort.

I will not press new clause 32 to a vote, but I hope that Ministers will take the case seriously and bring forward proposals next week in the Chancellor’s statement.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury) 2:15 pm, 2nd July 2020

The unprecedented support that the UK Government have given to business during this crisis has been welcomed, but we feel we need a bolder and more radical approach to ensure that the recovery helps to deliver a fairer, more resilient economy, with wellbeing at its core.

Across the parties and nations of the UK, everybody’s aim in this crisis was principally to save lives, but we now face the difficult task of rebuilding the economy after the unprecedented suspension of economic activity over the past few months. There is no doubt that we will have divergent ideas as to how to achieve this, but my colleagues in the Scottish Government and on the SNP Benches here have worked as constructively as we can to produce a clear strategy for the future of Scotland’s economy. That strategy is important, because it is not good enough just to lurch from crisis to crisis. I have now been in Parliament for five years, with two elections in between, three Prime Ministers, and now a pandemic and a likely no-deal exit from the EU at the end of year. We have seen a vacuum of economic strategy from successive Conservative Governments; it is time for this Government to recognise the unique circumstances in which we find ourselves.

We need to rebuild and grow our economy, and we need a vision for what we want that to look like. This crisis has clearly deepened existing inequalities. We have to seize the opportunity to build a new kind of economy that tackles poverty and inequality at its root. Research from the New Economics Foundation has found that only 6% of the public want a return to the pre-pandemic economy. The SNP’s new clause 10 would hold the Government to account on tackling child poverty and require the Chancellor to review the impact of the Bill, because we want to ensure that the inequalities that have widened as a result of this crisis do not continue to widen. We support Labour’s new clause 10, which complements our clause.

Unfortunately, we cannot trust the UK Government to deliver on tackling inequality on their own. In the past couple of weeks, we have seen an intention to return to the punitive regime of benefit sanctions that has caused so many families misery and hardship. How are people supposed to go out to work when they may be shielding, when they may have children at home and when they may put their families at risk by going out to work? It is really quite impossible. I do not know how the Government expect people to do that. They should definitely urgently rethink the proposals on benefit sanctions.

We have seen the Government providing free school meals for children in England only after being shamed into a U-turn Marcus Rashford, and we have seen a Prime Minister more concerned about a £900 million paint job on a plane than supporting families. That gives a real indication of this Government’s priorities. The Scottish Government have taken child poverty incredibly seriously. They have set in statute their commitment—[Interruption.] They are grumbling on the Government Benches; if they would like to tell me why spending £900 million on a plane is more important than—

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury)

If Government Members want to tell me why spending £900,000 on a plane is more important than feeding children—[Interruption.] All of it is too much. All of it is unnecessary; when there are children in my constituency and constituencies throughout the country not having food to put on the table, money spent on redecorating a plane is a shame that should stain this Government.

As I was saying, the Scottish Government have taken child poverty incredibly seriously. They have set in statute the commitment to eradicate child poverty by 2030, with concrete action in the child poverty delivery plan backed by the £50 million tackling child poverty fund. Child poverty in Scotland had fallen, but it has been on the rise since the Conservatives took over in 2010. Research from the Joseph Rowntree Foundation directly attributes this rise to welfare policy. In addition, the policies outwith the control of the Scottish Government, such as no recourse to public funds, cause significant poverty among people who are working. Constituents come to my office who cannot put food on the table for their children and who are struggling to pay their bills. Some have come to my office several years in a row to apply for the Christmas presents fund that is run in Glasgow, because even though they are working, they are not entitled to the benefits that their neighbours get; two children may sit next to one another in the classroom but one will go without because one family has no recourse to public funds. The Government must rethink this, because we have seen through the coronavirus crisis that people with no recourse to public funds find it more difficult to support themselves through this time.

Photo of Wes Streeting Wes Streeting Shadow Exchequer Secretary (Treasury)

The hon. Lady is right to say that so much of the responsibility and blame for what is happening in Scotland rests on the shoulders of the decisions taken here by the Conservative Government in Westminster, but I cannot resist asking her: given that between 1999 and 2007 Labour was in government in Holyrood and Westminster, are the people of Scotland not better served when there is a Labour Government here and a Labour Government there?

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Treasury)

The hon. Gentleman seems to think that Scotland just hangs about and waits for a Labour Government, and everything is going to be fine. We would rather have Scotland’s powers in our hands than have one hand tied behind our back in this Union. So we are stuck with the policies that this Government and Parliament propose, which the people of Scotland, in many cases, have not voted for and do not want.

It is difficult to assess the impact that no recourse to public funds has on poverty in constituencies across the UK. I asked for a breakdown by constituency of the number of people with no recourse to public funds, but the Government said that that information could not be provided to me. So I cannot tell how many people in my constituency have no recourse to public funds and are struggling. It falls to the Scottish Government to try to fix some of these problems, because as soon as anything is proposed to get around no recourse to public funds, the UK Government shut it down and say it cannot happen. The Scottish Government therefore have an anti-destitution strategy for no recourse to public funds, to take a degree of responsibility for the serious situation many people face—these are our people and we want to try to help them. When that strategy comes forward, I call on the UK Government not to stand in the way of trying to support people in society who need help.

Academic research has shown that the single most effective policy to reduce child poverty in Scotland would be for universal credit payments to be increased, and the Scottish Government are using the powers we have to invest in the new Scottish child payment, which will lift 30,000 children out of poverty. With UC applications more than doubling since this time last year, we badly need sustained investment in the welfare system from the UK Government, and it is disappointing that the Prime Minister has failed to rule out a return to austerity. The UK Government’s welfare cuts are estimated to reduce social security spending in Scotland by up to £3.7 billion in 2020-21. The Scottish Government are spending more than £100 million a year to mitigate the worst of those, including by mitigating against the bedroom tax. However, as Professor Alston, the United Nations special rapporteur on extreme poverty and human rights, wrote in his report on poverty in the UK:

“Devolved administrations have tried to mitigate the worst impacts of austerity, despite experiencing significant reductions in block grant funding and constitutional limits on their ability to raise revenue. Scotland and Northern Ireland each report spending some £125 million per year to protect people from the worst impacts of austerity and, unlike the United Kingdom Government, the three devolved administrations all provide welfare funds for emergencies and hardships.

But mitigation comes at a price, and is not sustainable. The Scottish Government said it had reached the limit of what it can afford to mitigate, because every pound spent on offsetting cuts means reducing vital services.”

Professor Alston was absolutely right in that assessment.

We cannot, in any circumstances, return to the austerity of the past. The welfare state and public services have been devasted in the past 10 years, leaving our economy vulnerable. Unfortunately, we still do not know if or when a second wave of covid-19 might happen, so we must use this opportunity to build resilience, if possible. We can allow a more flexible labour market response by increasing the generosity of universal credit, which will give people the financial headroom to gain new skills to meet the changing demands of the economy.

The Chancellor said that he would do whatever it takes to protect jobs, after a recent Treasury Committee report revealed that more than 1 million people have fallen through the gaps in support schemes. At this critical stage, it is vital that the Treasury strengthens and extends the schemes to ensure a strong economic recovery from the crisis. It is extremely concerning that the Government are pushing ahead with plans to wind down support schemes, and in particular that new clause 19 will designate grants to help businesses, employers, individuals and members of partnerships affected by the coronavirus crisis as taxable income.

It is also concerning that HMRC will be given new compliance powers to enforce those rules and that that has not been effectively communicated to businesses. Any new powers granted to HMRC must be proportionate and serve to aid recovery, rather than providing a further barrier for businesses to overcome. Those concerns have been backed by tax experts, such as the Chartered Institute of Taxation, which has said that it is vital that HMRC

“take a reasonable approach to enforcement in cases where recipients of CSPs were not entitled to the amount they received…there will be cases where people have made inadvertent errors in claims which may not come to light for some time. There will be cases where the person just did not know of the requirement to notify an overpayment. It is imperative that HMRC obtain a full understanding of the facts in every case and take a proportionate and targeted approach in their compliance activity in the months ahead.”

It is extremely important that HMRC and the Government get those details right. Many businesses are already on their knees and vulnerable to further shocks. Many businesses in my constituency are struggling to deal with HMRC, with errors in reporting systems meaning that they are not entitled to the payments that other businesses have received. It is difficult to address those problems.

If businesses are left to fail as support is withdrawn, the billions of pounds that have already been spent by the Government will be money wasted. As I did in Committee, I highlight the concerns raised by the Association of Business Recovery Professionals, R3, about the plans to grant preferential status to HMRC in insolvency procedures from December, covered by our amendments 9 to 15. It and UK Finance are concerned that that will undermine business lending and make it harder to rescue businesses from administration. Many companies across the UK in recent weeks have been struggling and going into administration, so the Treasury should carefully consider whether its plans will help businesses or hasten their demise.

Countries all over the world are facing the same choices and growing levels of public debt, but if we are to recover fully from the crisis, we need to prioritise growth and wellbeing over deficit reduction. This week, the Scottish Government laid out a plan for a fiscal stimulus package of £80 billion to stimulate growth for the whole of the UK. That would be used to accelerate major investment in low-carbon energy efficiency and digital infrastructure and deliver a green new deal for UK. The value of that investment can be recognised by assessing the Government’s fiscal sustainability in terms of its public sector net worth.

It is regrettable that the UK will, of course, miss out on the European Commission’s €750 billion stimulus. That makes it even more critical that the UK Government commit to their own stimulus—a proper stimulus, not the pretendy one that was announced by the Prime Minister this week—in the wake of covid-19, such as a reduction in VAT and job guarantees for young people.

Speaking of even younger people, I make a plug for my small and uncontentious amendment 4, which seeks to clarify that human breast milk is part of the vehicle excise duty exemption for vehicles carrying blood. It would be an important signal of support and recognition from the UK Government to those operating milk banks and to the mums donating their breast milk, which helps some of the most vulnerable babies in intensive care units across the UK. Among them is the extraordinary woman who, last week, donated an astonishing 32 litres to the milk bank that covers all of Scotland.

The Scottish Government and my colleagues in Westminster have put a considerable amount of work into formulating a meaningful strategy for Scotland’s recovery and future progress in delivering inclusive growth. I sincerely hope that those policies are taken seriously by the Treasury and that we can look back on this time as a pivotal one for making progress towards a fairer and more equitable society.

Photo of Mark Jenkinson Mark Jenkinson Conservative, Workington

It is an honour and a privilege to be addressing you from these green Benches, Mr Deputy Speaker, and most unexpected for a Wukkington lad like me. It would be fair to say that neither the timing nor circumstance of my maiden speech are as I imagined, with my original timing altered by the loss of one of Workington’s great artists—a much-loved former teacher and my wife’s grandmother—followed by lockdown, and the circumstance altered by a socially distanced Chamber and our new normal in the light of coronavirus.

On that subject, I must pay tribute to the huge sacrifices that each and every one of my constituents has made to stop the spread of the virus and to the huge effort from many individuals and businesses with their contributions to local community and national efforts. If I was to look for one positive in recent months, it would be the way that so many of my constituents have stepped up to the plate to support those around them.

The scale and speed of the Government’s response to coronavirus has been unprecedented. The measures that we have seen across the grant schemes, rate relief schemes, furlough schemes and bounce-back loans have been welcomed by my constituents in Workington. There is more to do and there are lessons to be learned, but I am incredibly proud to be here today to support the Government in their efforts.

I stand here before a House that has never before so closely resembled the make-up of the country, particularly on the Conservative side, as so many of us now speak for industrial communities that Labour deserted. As the son of a binman and an office clerk, and as a former British Steel apprentice without a university education, I am testament to that change. While I never thought, growing up, that I might grace these green Benches, others seemed to. One of my secondary school science teachers, Mr Harris, once recognised in my school report—if the Prime Minister is listening—my ministerial potential. He suggested agriculture, but I am not fussy.

Not having spent a huge amount of time outside Cumbria, I wondered how I might identify fellow Cumbrians in the big city. Folklore has it that I should greet those about whom I have a suspicion they may be Cumbrian in my native dialect with, “’as thou e’er sin cuddy lowp a five barred yat?”, in the hope of eliciting the answer, “Aye, it mun a bin a gay lish cuddy else a varra la’al yat.” At the risk of destroying the ancient practice of identifying Cumbrians in exile, for those not lucky enough to hail from God’s own county of Cumbria, that is dialect for, “Have you ever seen a donkey jump a five-barred gate?”, and the response, “Yes, it must have been a very fit donkey or a very small gate.”

Alongside the promises I made to my constituents for infrastructure improvements, increases in school spending, nurses and police, and levelling up, which this Bill starts to deliver and are very much welcomed across Workington, I will take any attempt that I can to have Hansard record Cumbrian dialect for posterity!

It is customary on these occasions to talk about one’s predecessor, and I take the opportunity to thank Sue Hayman for the work that she has done in this House and across the constituency. She was, and remains, an assiduous proponent of her causes, which I understand she may have the chance to continue from the other place. I wish her well and look forward to working with her to enhance the lives of my constituents.

However, I also wish to talk about another predecessor, John Christian Curwen, the Whig MP for Carlisle—a long time before my hon. Friend representing that seat now—before he went on to win the Cumberland seat in 1826. Under Curwen, Workington was the birthplace of modern agricultural practices at his model farm. Schoose Farm is still farmed to this day. He also introduced the first recorded social insurance scheme locally, and attempted to do so nationally as an MP, nearly 100 years before Lloyd George put forward the scheme we now know as national insurance. If I can make a fraction of the impact that Curwen made on my constituency, we would be in a good place. But he was not, by his own confession, what is called “a good party man” He was one of those opinionated stalwarts whose independence found readiest expression in alignment with the Opposition. Having watched the drama in this place over the last few years from the outside, I hope for the sake of my hon. Friend Eddie Hughes and my right hon. Friend Mark Spencer that that is one of his traits I leave in the past.

It was the home of John Christian Curwen, whose picture hangs in the corridor close to your office, Mr Deputy Speaker, that brought me into politics. The destruction and subsequent decay of Workington Hall allowed over decades remains a blight on Workington. I hope to use some of my time here to bring life to what remains, which is grade I listed and partly an ancient scheduled monument.

But the town of Workington is just one of five towns in my constituency, the others being Cockermouth, a wonderful market town filled with independent traders, who have truly shown their resilience in recent years; Maryport, whose residents have accepted me so warmly into my constituency office there, and which sits on the cusp of revival thanks to this Government’s Future High Streets investment; Aspatria, where I continue to work hard to protect people’s future in the face of the proposed closure of the Sealy bed factory; and Silloth, a gem of a Victorian seaside resort that I can recommend to any hon. Members of this House.

The Workington constituency has 30 miles of coastline stretching from industrial towns to the rural villages at the end of Hadrian’s Wall. There are a number of Members of this House, and of the other place, who saw much of the constituency last year during the campaign, in all weathers. I fondly recall a video recorded by my hon. Friend Guy Opperman in the wind and rain in Westfield, as no one could hear a word coming from the mouth of a man who looked like he had been dragged from the sea. I give thanks to all the Members of this House and of the other place, to the many other friends, and to my wife and my family for the support they gave to me on my journey to this place, and continue to give me as I settle into these green Benches.

West Cumbria has led the way in many sectors over many centuries, not only with Curwen. Little Clifton gave us John “Iron Mad” Wilkinson, a protagonist of the industrial revolution who made his mark in the constituency of my hon. Friend Lucy Allan. Later, Henry Bessemer chose Workington to base his company, and we went on to send the finest steel around the world. Our rail and track products still underpin many a thriving economy.

Cockermouth gave us renowned astronomer Fearon Fallows, while next door in the constituency of my hon. Friend Trudy Harrison Eaglesfield gave us John Dalton, a pioneer of atomic theory, and Keswick’s Dr William Brownrigg discovered platinum. Borrowdale gave us graphite, and Lillyhall in my constituency became a manufacturing centre for graphite in the nuclear supply chain, and, of course, the world-beating pencils produced there today, having had a previous long history in Keswick. Today, we have various companies across the Workington constituency that produce some of the finest packaging materials in the world, used by every one of us in some way, every day.

The Workington constituency is home to some of the most beautiful places on earth and has a great tourism future ahead of it, but we are also proud of our industrial heritage and our world-beating manufacturing processes in use today. With our friends next door in Copeland, we are the home of the UK’s nuclear expertise. We stand ready to play our part in the delivery of new nuclear and in exporting that expertise around the world. The Workington constituency also has so much more to offer. With some of the highest tidal ranges in the UK—as we talk in this place of new tidal and wave energies—as the maintenance base for the Robin Rigg offshore wind farm and with the constituency set to benefit from the construction of an English-side extension, we also stand ready to play our part in truly becoming Britain’s energy coast.

Workington was a cornerstone of the industrial revolution. As we look to our future, I am sure that the Workington constituency will be at the core of the low-carbon energy revolution to come, and I am delighted to be able to be here to play my part.

Photo of Mary Foy Mary Foy Labour, City of Durham 2:30 pm, 2nd July 2020

I congratulate Mark Jenkinson on his maiden speech, and I hope that he—a newbie like me—enjoys his time in this place and is a strong voice for the people of Workington. Yesterday, I spoke in the Finance Bill debate about job creation and the importance of creating not only jobs, but secure jobs that put the needs of workers at the heart of the economy, rather than profit. It seems rather appropriate that I have the opportunity to speak in the child poverty debate today, because as we all know, the Government’s shameful record on employment and workers’ rights is one of the main drivers behind child poverty.

To be honest, I have absolutely no faith that the Government understand the issue of child poverty in any meaningful way. In the space of a month, I had the Secretary of State for Health and Social Care telling me that this Government were committed to levelling up the north-east, yet I also witnessed an equalities Minister admitting from the Dispatch Box that they had not heard of the Marmot report—essential reading when looking to tackle health inequalities. As one popular actor said in response, it is like a vicar not having heard of the Bible.

Over the last decade, Conservative Governments have systematically dismantled the progress that the last Labour Government made on child poverty. Currently, 4 million children are living in poverty, with 3 million of those living in a household where at least one person is in work. In addition to that, the Government’s Social Mobility Commission reports that there are 600,000 more children living in relative poverty than in 2012. The commission referenced the Government’s welfare changes as a key cause of this and have predicted that those changes, along with the impact of covid-19, will only increase child poverty. While the Prime Minister might be confused as to whether the Government have caused more child poverty, I am not. It is there in black and white in those appalling figures and, quite frankly, it is an utter disgrace.

In recent weeks, we have also seen the Government being forced into a U-turn on free school meals after a campaign by a leading footballer—one of the people the Health Secretary was telling to do their bit at the start of the crisis. Is it not shameful that we have a Government who have to be embarrassed into feeding hungry children? To top it all off, the Government have reintroduced benefit sanctions in the midst of a global pandemic and economic disaster. Welfare support from the Government will be essential during the coming recession, yet the Government seem more concerned with taking support away than supporting people in dire financial straits. How on earth does this help child poverty? I wish that the Government were as quick to sanction Dominic Cummings or the Secretary of State for Housing as they are to sanction vulnerable people. What is clear from these decisions is that the Government either fundamentally misunderstand the issue of child poverty or simply do not care. I would ask the Minister which it is, but I suspect it is both.

Unfortunately, this country now faces one of the biggest crises in living memory. There is a combined threat to public health and the economy, which must be tackled together. However, the Government’s tendency to view poverty as an issue with individual causes, and their ignorance of health inequalities, show that they are poorly equipped to deal with this problem. When confronted with the rise in child poverty by my right hon. Friend the Leader of the Opposition, the Prime Minister denied the extent of the issue. To bluster and deflect would be one thing, but to deny that the issue exists is deeply worrying. How can the Government be trusted to tackle the issue if they refuse to confront it and deny its existence?

Successive Conservative Governments have made the problem worse; that is not my opinion but a fact. What they must do now is admit that they were wrong and change course. A starting point would be to accept the Social Mobility Commission’s recommendation that the Treasury give the Office for Budget Responsibility the role of assessing the impact of the Government’s fiscal policies on poverty. Sadly, I fear that under this Government, child poverty will continue to rise, as they simply do not recognise that the problem exists or know how to solve it. I can only hope that they prove me wrong.

Photo of Aaron Bell Aaron Bell Conservative, Newcastle-under-Lyme

It is a pleasure to follow Mary Kelly Foy. It is also a pleasure to follow my hon. Friend Mark Jenkinson and to congratulate him on a truly excellent maiden speech. It was warm, it was witty and it was thoughtful, and I know that he will serve the people of Workington very well in this place. He, like me, represents a red wall seat. Wes Streeting, the Labour Front-Bench spokesman, spoke nostalgically and warmly about the Blair Government. Under the Blair Government, both his seat and mine had 10,000 Labour majorities or more, and perhaps the Opposition might reflect on why those voters have lost faith with Labour to solve their problems. There is poverty in my constituency; there is poverty in my hon. Friend’s constituency, but those people put their faith in the Conservative party to make their lives and their futures better.

I turn to the Bill and the amendments. It is clear that an ambitious and decisive response was demanded of the Government by the serious economic situation that we as a nation and the whole world face. The Budget debate in which I spoke back in March already feels a very long time ago for all of us, I am sure. In many ways, the world has changed a great deal since the day when my right hon. Friend the Chancellor of the Exchequer delivered his excellent first Budget to the House. I welcome these Government new clauses, which provide both relief and certainty in a number of affected areas, and I will speak a little more specifically about new clause 20 later.

In other ways, however, it is even clearer now than it was then that my right hon. Friend was ahead of the curve in the response to the challenges that we face. The Treasury has been at the forefront of the national response to the coronavirus and a leading example to the rest of the world, with its focus on protecting jobs and maintaining the capacity of our economy, while also looking after the most vulnerable in our society in all the measures taken to respond to the virus.

The extraordinary success of the coronavirus job retention schemes means that we have been paying the wages of more than 9 million people who would otherwise have been laid off or made redundant and therefore we have protected their jobs, their livelihoods and their families through this most difficult time. The Government have, in my view, risen to the challenge of protecting our economy thoughtfully, responsibly and with ambition. In my constituency of Newcastle-under-Lyme, that has meant 10,200 jobs supported through the furlough scheme and 2,600 self-employed workers supported with grants of more than £7 million. The local borough council has also supported our local businesses by distributing more than £21 million of business grants. I have received many emails from constituents asking me to pass on their thanks to the Government for the grants, the furlough scheme and all the other measures that have helped to keep them, their businesses and their families afloat through this period.

Now, as we start to leave lockdown and we reflect on the steps that are needed to recover from the economic elements of this crisis, it is important that we all remember the manifesto pledges on which Conservative Members were elected and which this Bill implements. As we begin to look to the future and the easing of lockdown, our commitment to levelling up all parts of the country should only be strengthened. In that spirit, I welcome the Prime Minister’s announcement earlier this week of a new deal, putting jobs and infrastructure at the centre of the Government’s economic growth strategy. That will build on our manifesto commitment to spread opportunity across the country and unleash the potential of the whole United Kingdom.

The £1 billion fund for school improvements will help to ensure that our schools are well maintained and provide students with safe environments that support a high-quality education. I welcome the statement given earlier today by the Education Secretary about what we can expect in September. Newcastle-under-Lyme is one of the 101 towns that were selected for a town deal, and I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a member of the town deal board. We will welcome the additional £500,000 or more to spend on local improvement projects. That will, I hope, help to support our high street at a time when it desperately needs that help.

At this point, I must highlight the ongoing concerns of the owners of pubs, bars, restaurants and cafés, and all their employees, many of whom have been in contact with me over recent months. Being able to reopen this Saturday is, of course, an exciting moment for many, and many are looking forward to it, but they still have to adapt to the new normal and that is a challenge that cannot be overestimated. Our local economies will continue to face worrying times and difficult decisions over the weeks and months ahead. We must all do we can, as individuals, to support our local businesses: shop locally, visit our markets and support our local high streets.

New clause 20 is hugely welcome. This measure would allow certain personnel to retain their protected pension rights if they are re-employed as part of the response to coronavirus. I raised this on the Floor of the House in March with my right hon. Friend the Health Secretary, because I had been contacted by a constituent who had come out of retirement to work as a nurse during the crisis and was concerned that by answering the Government’s call for help, she would lose her pension entitlement and rights. The new clause ensures fairness for her and others in her position, and I am glad to see the Government legislating to protect the brave individuals who have stepped up to help in a moment of national crisis.

In conclusion, this Finance Bill implements a Budget that not only recognises the challenges of the present, but looks to the future. The Budget and the Bill are full of ambition for our country and hope for the future. Let us not forget that our national effort in defeating coronavirus presents an opportunity for us to tackle this country’s challenges. Instead of despondency, we must focus on creating opportunity for our country. That is what this Bill aims to do, and that is why I will be supporting it.

Photo of Claudia Webbe Claudia Webbe Labour, Leicester East 2:45 pm, 2nd July 2020

It was Mahatma Gandhi, a hero to many Leicester residents, who famously said that the true measure of any society can be found in how it treats its most vulnerable members. When it comes to ensuring that vulnerable children are fed and looked after, our Government should be ashamed of themselves.

According to the Government’s own Social Mobility Commission, 600,000 more children are living in relative poverty now than in 2012. That is projected to increase further because of benefit changes and, of course, the coronavirus pandemic. In 2018, the number of children living in relative poverty rose by 100,000 to 4.2 million, or around 30% of all children. That appalling figure reflects the Government’s failure on the fundamental principle of governance: to provide for the most basic needs of our citizens.

As of February 2020, around 14 million people were in poverty in the UK. The virus may not discriminate, but our economic and social system certainly does. Children from African, Asian and minority ethnic families are nearly twice as likely to be in poverty than children in white British families. Leicester East is one of the most ethnically and culturally diverse places in the UK and has high levels of both child poverty and in-work poverty—we suffer from a perfect storm which enables the virus to have its impact.

Like many of our residents, I am deeply concerned about the recent increase in coronavirus cases in our city and the economic impact of the necessary lockdown extension. I am particularly worried about the impact that the pandemic will have on those Leicester children who are already living in conditions of unacceptable hardship. Over one in three children—42%—in Leicester East live in poverty. Nearly 6,000 households—around 14%—in Leicester East are in fuel poverty. As of April last year, the average weekly income for full-time employees in Leicester East was £420. That is £130 less than the east midlands average and £160 less than the UK average. The proportion of people claiming unemployment benefits in my constituency is also higher than the regional and national level. Do this Government believe that my constituents are somehow worth less than others? It is unacceptable that they have allowed such rank regional inequality to fester.

The worst thing about these shocking figures is that they reflect our local reality before the unprecedented coronavirus pandemic. We do not yet know the full impact of the unprecedented economic disruption caused by the virus. With widespread job losses, it is certain that it will have exacerbated hardship across Leicester and the UK. I have been helping countless local businesses and employees to stay afloat and access funding, despite the Government’s prohibitively strict guidelines. At a national and local level, we see companies such as British Airways take huge amounts of taxpayers’ money through the job retention scheme and then fire vast swathes of their workforce while imposing worse terms of employment. Too many Leicester residents have started to receive threats of redundancy at a time when the protection of workers must be prioritised. With Leicester required to maintain lockdown measures, it will be necessary for economic support to be extended and expanded. It is crucial that families in Leicester East have the material basis to stay safe and stay alive during the continued lockdown.

The Government’s callousness is demonstrated by the fact that benefit sanctions have been resumed at a time when we face an unprecedented period of economic hardship. For people forced to endure severe levels of hardship and such insecurity, it is impossible to comply, at times, with the Government’s guidance on self-isolation and social distancing. It is a moral imperative and in the public interest of everyone in our community that the basic needs of all residents are met. The cruelty of this Government over the last decade has transformed the Department for Work and Pensions into a symbol of fear. The coronavirus pandemic has further demonstrated the need for universal welfare support that will be there to help and support people, not punish and police them.

Even before the coronavirus hit, the Government had presided over a decade in which they cut essential services for the people of Leicester East while providing tax cuts for the wealthy, in which they allowed poverty and homelessness to rise in my constituency and across the country, and in which they sought to sow divisions as they facilitated the transfer of wealth from the poorest to the richest. The Government must act now to prevent the further impoverishment of working people and their families during the pandemic. They must start treating the widespread poverty of our children as the national scandal that it is. This virus has demonstrated that we have a moral duty to ensure that everyone in Leicester and across the country is protected. That means that, after the crisis, we can no longer live in a society that is defined by extreme inequality and in which it is commonplace for our children to go to bed hungry.

Photo of Andrew Griffith Andrew Griffith Conservative, Arundel and South Downs

It is a pleasure to follow the passion of Claudia Webbe. Our thoughts are with her and her constituents at this difficult time. It is a particular pleasure, if I may say so, to follow my hon. Friend Mark Jenkinson. He made us wait for his maiden contribution because of the difficult circumstances that we are in, but we are absolutely delighted that it was worth the wait. Workington has gained an important and well respected voice in this House.

I am speaking today in support of my hon. Friend Sir Graham Brady and of new clause 30, which requests that the Treasury review the level of air passenger duty. I am doing so on behalf of the 645 individual constituents from Arundel and South Downs who have signed the parliamentary petition on support for the aviation industry. They work for firms such as British Airways, Virgin and TUI, and in the extended Gatwick supply chain in West Sussex. As we know, aviation has taken the full force of the economic impact of the covid-19 crisis; it has been devastated by border closures and the calamitous drop in passenger demand. Going into the pandemic, our aviation sector was world-leading in terms of growth, jobs and competitiveness, but that is now at real risk. Research from the International Air Transport Association shows that the UK will be the worst revenue-hit country in Europe, facing a £29 billion revenue loss and with more than 660,000 jobs at risk. There are many aspects of this crisis that my right hon. Friend the Minister cannot help with, and I shall raise those another day, but one practical thing that he could do is to remove or mitigate the headwind of air passenger duty and help hard-pressed families to return to the air.

I know that the Financial Secretary does not share this affliction, but some falsely believe that air passenger duty is an environmental measure. That is manifestly not the case. It is levied on passenger numbers, so that an inefficient empty plane pays less than an efficient full one. It bears no relation to how modern an aircraft is or to the fuel efficiency with which it is being flown. Also, it does not take into account the fact that, to the extent that it disincentivises flight, the alternative for many passengers may be a long and polluting car journey. This is particularly true of domestic aviation. In any case, aviation accounts for barely 2% of human-induced global emissions, and in February this year, UK aviation committed to being net carbon zero by 2050. That is the first national net zero aviation commitment anywhere in the world.

This is a sector on the verge of exciting and disruptive change. We are at the dawn of what is called the third era of aviation, which will bring quieter and cleaner transport to the skies. Electrification will have as profound an impact as the replacement of the piston engine by gas turbines. British businesses such as Rolls-Royce are leaders in this field, providing engines to the first generation of all-electric planes, which are being certified for use by the Federal Aviation Administration right now. Air passenger duty is not a large source of revenue for the Treasury. At the best of times, before this crisis, it was expected to account for just 0.5% of all receipts, but with our busiest airport, Heathrow, reporting flights at just 3% of their normal levels in April, the revenue from APD this year and next will in any case be paltry. I conclude by humbly putting the proposition to the Minister that he may never again have such an affordable opportunity to help a vital British industry, to enhance his own formidable reputation on the Government Benches, to strengthen the Union by supporting domestic flights and to simplify the tax system than he does in accepting new clause 30.

Photo of Matt Western Matt Western Opposition Whip (Commons) 3:00 pm, 2nd July 2020

It is a pleasure to follow Andrew Griffith. I spoke in the debate on the Budget delivered on 11 March, which for all of us seems like a lifetime ago, such has been the impact of covid-19 on us socially and on our health but also on our communities and, profoundly, on our economy. That is one reason why I wanted to speak, although perhaps some of my comments are more relevant to yesterday’s debate.

We were told that covid-19 would not discriminate and that all of us would be impacted equally, but, as we have seen, we are witnessing a further widening of inequality by virtue of this terrible crisis. We now know that its impacts are different according to the nature of someone’s employment, where they live and so on. It reminds me of what happened from 2010 onwards, post the financial crash, when we were told we were all in it together. Of course, that was never the case. Those who had wealth and capital prospered. Look at the wealth of the top 100 people in this country and how it grew exponentially in the past decade, and how inequality widened so considerably. That has to be our great fear: the mistakes of the period from 2010 onwards will be repeated now. The warm words are not enough. We have to address this. We must recognise the sacrifice and contributions made by everyone across our society, irrespective of what people do. It does not matter whether they work in finance in the City or whatever; it is not enough. We all make a contribution. We all have a part to play in our society and in our economy.

In my constituency, there are just under 2,000 children living in relative poverty. Many people think it is a wealthy, prosperous community, but that is one in nine of all children. When it comes to energy poverty, one in 11 households lives in such poverty. We have no quality social housing being built at scale: something like nine social rent council homes have been built since 2010, and an average of 90 social rent homes have been built a year for the past five years. That is inequality. The children of this next generation will not enjoy the same benefits as that those of us who grew up in the 70s and elsewhere. We had a right and an opportunity to quality housing, to an education and to good job prospects. We are now seeing the beginning of unemployment rocketing.

I want to cover what is missing from the Finance Bill, given the drastic change in the economic picture. With prosperity, we can address inequality, but it is a choice. In particular, the support we now need from the Treasury for the automotive industry, which is so important to my constituency, is to protect jobs and get the Warwick and Leamington economy back on its feet. Covid-19 has had a huge impact on my constituency, as it has everywhere else, but of course the effects vary.

I have spoken with a wide range of businesses that have required the financial support offered by Government, which has been broadly welcomed, albeit there have been some huge gaps in the support for directors of small limited companies and others. In Warwick district—that is not entirely the same as the constituency—16,900 people had been placed on furlough. Many of them will be in the sectors hardest hit, such as hospitality, retail, leisure and tourism, and many are the lowest paid workers in my constituency, who will be at the start of their working lives. I have great concerns about what will happen once employer contributions to the job retention scheme are phased out entirely. The claimant count in my constituency has already shot up by 129% since March to over 3,000 people, and the figure will only go higher as the JRS is wound down. I urge the Government to consider extending the scheme for those sectors that are being badly impacted by the virus, until we can remove social distancing measures. The Leader of the Opposition also asked for this at PMQs yesterday.

Even with furlough still in place, people in my constituency are already losing well paid, skilled jobs in our precious automotive industry. Just last month, Jaguar Land Rover announced that it will be cutting 1,000 jobs and Aston Martin announced 500 job losses. With UK sales down 97% in the past two months, the sector has effectively had to cease production for three months, yet companies have often found that they do not qualify for the Government-backed loans. Demand for vehicles has understandably fallen off a cliff, and those businesses are going to need a lot of support to get back on their feet.

Along with colleagues on the all-party parliamentary group on electric vehicles, I have written to the Chancellor and the Business Secretary in my role as chair of that group to ask them urgently to discuss a stimulus package for the sector. I hope they will respond to that letter soon. There is an opportunity not only to protect skilled manufacturing jobs—the kind that we are desperate to attract and retain in this country—but to drive the industry towards a greener future. I know that the industry is desperate for the Government to work with it in that regard.

We need Government intervention because it is vital to managing transition. I very much hope that we will hear some positive words from the Chancellor next week. I therefore welcome the reforms to vehicle excise duty in the Bill and the £500 million for electric vehicle charging infrastructure announced at the Budget, but we must be much bolder if we are to make electric vehicles and other alternative fuel vehicles a good choice for consumers as has been done in other markets. By way of example, Norway has been the most successful country in achieving EV market penetration. The support from the Government there provides reduced road tax, free municipal parking and VAT exemption. This approach makes the total cost of ownership less than for dirtier, more polluting vehicles. We need 30,000 charging points in the UK—three times the amount we have now—and the investment to make it happen.

When the Prime Minister talks about trying to get the economy back on its feet, the phrase “build, build, build” is wrong for me. We must make, make, make and invest, invest, invest in our infrastructure, including in EV charging points and getting more alternative energy sources into our grids in order to build a cleaner and better future. As it happens, I travel by electric bike and would encourage everyone to take shorter journeys using this mode of transport, but we must make it cheaper for consumers to do so. Such grants and benefits can really help to stimulate new sectors. I urge the Government to consider doing this next week.

I urge Treasury Ministers to look again at how the Government can use our taxation system to incentivise the purchase and uptake of new, cleaner internal combustion engine vehicles; to support our automotive industry to get firing on all cylinders again; to look at alternative fuels, electric vehicles and hydrogen vehicles; and to think about how we can really progress and drive the sector forward. The Government must have the sector at the front of their mind before any financial statement delivered next week that is designed to protect jobs. Without urgent action and action at scale, we risk losing this sector forever.

Photo of Sarah Olney Sarah Olney Liberal Democrat Spokesperson (International Trade), Liberal Democrat Spokesperson (Business, Energy and Industrial Strategy)

I congratulate Mark Jenkinson on his maiden speech and warmly welcome him to his place. I shall attempt to tune my Surrey ears to his Cumbrian dialect, and I very much look forward to hearing more from him.

I want to take this opportunity to ask the Government, in their response to the coronavirus and all the challenges that are still to come, to focus particularly on two priorities when making their decisions about how to allocate resources to meet this enormous challenge. The first is to focus on the interests of our children and young people. It would have been unthinkable at any other time for an entire generation of schoolchildren to have missed a whole term and a half of schooling. Among all the justifiable anxiety about infection rates, testing, PPE and reopening the economy, the needs of our children seem to have been somewhat sidelined.

I welcome the Secretary of State’s statement earlier today about reopening schools in September. Like the rest of the House, I fervently hope that infection rates continue to decline to facilitate this. I would like to see a wholesale commitment from this Government to overcoming the educational deficit that has resulted from the shutdown. We already know how much of an attainment gap opens up between different groups of children over the summer holidays, and we can only imagine how much more pronounced that this will have become after half a year’s worth of missed schooling. I urge the Government to allocate generous resources to schools so that they may invest in the additional staffing and resources that they need to meet the needs of all children who have been disadvantaged.

I would also like to see a commitment to more diverse forms of learning to help engage young people who have become alienated from traditional forms of learning over their time away. Music, drama, sport, and open-air learning can all help children to re-engage with their education and will also help to revive employment sectors that have been damaged by the shutdown.

Beyond education, we have a cohort of school leavers who are attempting to enter employment at the worst possible time. If we are not to doom this cohort to a lifetime of missed opportunities, we must act now to provide them with the employment opportunities where they can build real skills and lay the foundations for a meaningful working life. In that spirit, I welcome the aspiration in the Prime Minister’s speech to build, build, build, as I recognise that this will provide opportunities for high-skilled jobs and apprenticeships. However, I ask that the Government include a real commitment to retraining career changers to help people who have lost their jobs in this pandemic to find work among the new opportunities that these projects will provide.

I note that the sectors the Prime Minister promises to provide funding for are areas of employment that are typically masculine. I urge the Government to redouble their efforts to engage young women and female career changers in training for careers in construction and engineering if those are the sectors where employment is due most quickly to recover. We know that child poverty is most effectively overcome when women are in work and earning a good wage, supported by affordable childcare.

On that note, I draw the Government’s attention to the financial precariousness of both our pre-school providers and our universities. Every one of these institutions that is forced to close or scale back activity as a result of the pandemic is a narrowing of opportunities for our children and young people, and every effort should be made to support these sectors. While I am on this point, I should like to take the opportunity to raise the issue of travel in London for those under-18. For many years, it has been free for under-18s to travel on Transport for London services, and that has opened up to all of them a much wider range of opportunities—education, cultural, sporting and social. As part of the package that the Government put in place to bail out Transport for London earlier this summer, they specified that that travel offering for the under-18s had to be scrapped. In support of that decision, they cited the fact that young people use buses only for short journeys that they would otherwise walk. I have obtained from the Minister the evidence for that assertion, and it came from a report published some years ago that concluded that free travel for under-18s had an overwhelmingly positive impact on young people’s social and educational lives. I urge the Government to prioritise young people in this recovery and to make a start by scrapping this restriction on their travel.

The second area that I call on the Government to prioritise as we plan our future beyond this pandemic is the environment. I was really disappointed not to hear a greater emphasis on the progress towards our net-zero carbon targets in the Prime Minister’s speech. This is a fantastic opportunity to implement carbon-free and low-carbon standards into our construction of new homes and into our transport systems. We can also take this opportunity to specify new standards for biodiversity, water quality and air quality and to redouble our efforts to increase the proportion of our energy that comes from renewable sources. I particularly encourage the Government to think not just about new buildings, but about bringing existing buildings up to 21st-century standards. Committing to a programme of retrofitting insulation to our ageing homes, especially those belonging to low-income families, can provide skilled employment opportunities and help us to make substantial progress towards our net-zero carbon goals.

There are so many other challenges that this Government will need to face over the next few months and so many calls on taxpayers’ money, but I want to see the Government establish clear strategic priorities for their future spending, and I would like those priorities to be our children, our young people and our environment.

Photo of Rachel Hopkins Rachel Hopkins Labour, Luton South

After a decade of austerity, which has seen an assault on people’s living standards and our social security system, child poverty is at a disgracefully high level, and the Bill will not work towards tackling the root causes. I am speaking in support of Labour’s new clause 29, which would ensure that the Government review the impact of the Bill on poverty, and I commend my hon. Friend on the Front Bench for his opening remarks and others on this side of the House for the passion and understanding with which they have spoken.

As a result of a decade of austerity and despite crippling cuts to its own budget, Luton’s Labour council recognises what will improve lives and has quite simply set ending poverty in our town as its key strategy. Rightly, although sadly, it is putting tackling poverty and improving wellbeing at the heart of all its policy-making. Poverty cannot be an afterthought. The Government will not eradicate poverty unless they entrench a commitment to tackling it in their economic policy. We are the sixth wealthiest country in the world, but almost one in three children are in poverty. End Child Poverty’s latest figures show that 46% of children in my constituency of Luton South are living in poverty. In Dallow and Biscot wards, this figure rises to 65% and 67% respectively. Both wards have a large black, Asian and minority ethnic population, which evidences the Social Mobility Commission’s research that states that those groups are more likely to be in poverty.

Since that research, Government statistics show that the number of young people and children living below the breadline has continued to rise across the country. The Social Mobility Commission has stated that Ministers have delivered on only 23% of their proposals relating to social mobility since 2013. This week, in the same week that more redundancies have been announced in my constituency, Luton Foodbank has put out a special plea for emergency donations to meet rising demand and depleted stocks. Local charity the Level Trust continues to provide our children with shoes, coats and recycled school uniform, yet the Government do nothing.

The Government have not taken seriously the shameful level of poverty at the heart of our communities that is trapping families and their children in cycles of struggle. The Institute for Fiscal Studies forecast that the number of those in child poverty will rise to 5.2 million by 2022, and the Social Mobility Commission states that this rise is not due to forces beyond the Government’s control, but instead is partially a result of planned benefit changes. That projection was before the coronavirus outbreak, which we now know has forced people and families into immense financial hardship. That is exactly why poverty impact assessments must be entrenched in economic policy making. No Government should be able to shirk their responsibility to support those in poverty to move out of it.

The Government’s response to child poverty during the coronavirus crisis has exacerbated the social injustice. The Government pushed to end access to free school meals for vulnerable children over the summer period, and if it were not for Marcus Rashford’s campaign—which this side of the House supported—the Government would have increased the hardship of families by allowing over a million children to go hungry this summer.

This week, the Government announced that they will reintroduce conditionality and sanctioning into the social security system, at a time when unemployment has risen, job vacancies are dropping, schools are not back open and people still need to shield. The severe reduction in support without a strategy to help people back into work will penalise families and their children for the struggling job market and force them into poverty. The Conservative Government have created an economy where work does not lift people out of poverty. Increases in child poverty and working age poverty have coincided with increasing employment. Working families are unable to make ends meet. It is hypocritical of the Government to profess that they want to tackle child poverty when they choose not to confront the structural causes of poverty, such as low pay, high living costs and a broken social safety net.

The Finance Bill will not confront the scourge of child poverty, but new clause 29 would ensure that the Government considered how their policies impact those in poverty. To tackle the unprecedented impact that this crisis is having on society’s most vulnerable families and children, the Government should introduce a full Budget next week that includes social security reforms such as suspending the benefit cap, abolishing the two-child limit in universal credit and tax credit, removing the £16,000 universal credit saving limit, converting universal credit loans into grants, and uprating legacy benefits to match the increase in universal credit. By raising the social security net’s floor and legislating to tackle the structural causes of poverty such as insecure work and high living costs, we could eradicate child poverty in our country. There are no excuses for inaction or delay. No child should grow up with the hardship of poverty, and the Government must entrench tackling poverty into their economic strategy.

Photo of Fleur Anderson Fleur Anderson Labour, Putney 3:15 pm, 2nd July 2020

I congratulate Mark Jenkinson on his maiden speech and on taking his place in the House.

I am honoured to be able to give a speech today that will be arguing for the correct place of focusing on child poverty in all our legislation. If we do otherwise, we will fail the very people we should be serving. I stand here to represent a mother whom I met last year. I went to her house to support her children and she told me in passing about the one lightbulb they have in their house. I asked, “One lightbulb, why is that?”. They moved it around from room to room so that her children would not inadvertently be able to switch on and use more electricity, because they could not afford to light up more than one room at a time. That was a stark reminder to me about the child poverty levels we have in this country.

New clause 29 would mandate the Government to look at the effect of this Finance Bill on the basis of its impact on poverty and on inequalities—on relative poverty. To measure the success of the Bill, we need to carry out a review within six months and consider whether future studies should be carried out regularly by the OBR. I may be able to pre-empt the Minister’s response to this new clause. He may well say that it is unnecessary and that impact assessments will be carried out, but if those are not public and are not regularly carried out, the Government are marking their own homework on this. When it comes to measures that may make people poorer, that is not acceptable and we need a public report. The Government’s own Social Mobility Commission says in its “Monitoring social mobility” report, published this year:

“Too often also there is little transparency concerning the impact spending decisions have on poverty. The Treasury has made some efforts in this direction, but has so far declined to give the Office for Budget Responsibility (OBR) a proper role to monitor this. There should be more independent scrutiny to help ensure policy interventions across Whitehall genuinely support the most disadvantaged groups.”

The Government must be more strategic in their recovery from coronavirus than they have been in handling the crisis. They cannot take a hands-off approach, as they have done in the past decade towards child poverty. The cost of inaction, in terms of supporting the economy and reversing growing poverty levels, will be far greater than the cost of action. This really matters in London, which has the highest rate of child poverty of any English region, with 700,000 children—37% of all children in London—living in relative poverty, after housing costs are taken into account. In my borough of Wandsworth, 36% of children live in poverty. Although poverty rates are higher for everyone in London than they are nationally, this gap is larger for children than for any other group. Two thirds of children living in poverty in the UK are in working households or where at least one adult is in work, and they will be very impacted by the measures in this Bill, so we should record it.

When the UN’s special rapporteur Philip Alston produced his report on extreme poverty and human rights in Britain in 2018, long before coronavirus came along, he found that the UK Government’s policies had led to

“the systematic immiseration of millions across Great Britain”.

He also saw the disproportionate impact on women, saying:

“If you got a group of misogynists in a room and said how can we make this system work for men and not for women they would not have come up with too many ideas that are not already in place”.

We cannot continue with this kind of policy making.

Following drastic changes in Government economic policy beginning in 2010, the two preceding decades of progress in tackling child and pensioner poverty have begun to unravel, and poverty is on the rise. This Bill must not add to that. Under the previous Labour Government, child poverty was going down, but the latest figures from the Child Poverty Action Group show that 4.1 million children live in poverty in the UK; 47% of children living in lone parent families are in poverty; and 70% of children growing up in poverty live in working families. This is going in the wrong direction, as 5.2 million children are expected to be in poverty by 2022. Under this Government, we are heading towards having half of our children being poor in 21st century Britain. That would be not only a disgrace but a social calamity and economic disaster rolled into one.

On Tuesday, the regional director of Public Health England, Professor Kevin Fenton, warned a meeting of the London health board that the coronavirus has worsened stark and pervasive inequalities in London. A growing bank of national evidence shows that the virus has hit older people, poorer communities, men, and black, Asian, and minority ethnic Londoners the hardest. Some of those groups are also likely to be impacted by the wider social and economic consequences of the outbreak. According to Professor Fenton:

“These inequalities are stark, they’re pervasive and they are a call to action for the system moving forward to ensure that we do not go back to where we were…but we redouble and enhance our efforts to address these widening inequalities.”

Given those shocking figures, the worrying direction of travel, and the limiting daily impact on so many people’s lives, any new Bill that does not bake in an assessment of its impact on the lives of the poorest people in our country is set up to fail, and it will fail all those people and children in this country who we should be serving the most.

Photo of Ruth Jones Ruth Jones Labour, Newport West

It is a pleasure to bring up the rear in this important debate—last, but hopefully not least—and I commend the hon. Member for Workington (Mark Jenkinson) for his maiden speech. Labour Members obviously mourn the loss of his predecessor, but we trust that the hon. Gentleman will speak up for Cumbria as strongly as she did.

I wish to touch on three important areas that I think the Government should keep in mind as we look to rebuild our economy, and as communities across the UK get used to our new normal. We must remember that this is a recovery from the first wave of covid-19, and events in Leicester and elsewhere in England show how sensitive the evolving situation continues to be. A key component of any recovery effort is public sector pay, and the way we treat those who go above and beyond for us. Our workers deserve to be paid properly, and we must pledge to do that now. Last week there was a debate in this House about how we can acknowledge and support those workers in the NHS who give their lives to keep us, our families and our constituents alive and healthy. The answer to how we show our appreciation, and when we do it, is simple: we should pay people what they deserve. I hope that the Chancellor’s statement next week will lay out the building blocks to enable that to happen.

Newport is one of the most diverse parts of Wales, and I am proud of our city and its diversity. It is, however, a matter of deep regret that our cherished diversity has seen us on the frontline in the fight against the devastating impact of covid-19 on black and minority ethnic communities. A report commissioned by the Welsh Labour Government under First Minister Mark Drakeford was published recently, and it rightly calls for action to tackle the structural and systematic racism that may have contributed to the higher than average death rate in BME communities. Addressing those structural inequalities must be integral to the economic recovery for which our city is crying out.

In a city such as Newport—it will be the same in many other cities across the UK—we know at first hand how vital BME communities are for our collective prosperity. It really is as simple as that. We know that BME workers are more likely to be in low-paid jobs with little of the protection needed to stay safe and secure, and so the funding and delivery of PPE, and other protection, must be a priority for this Conservative Government.

One real, tangible thing that Ministers could do is follow the lead of the Welsh Labour Government, who have made provision for a comprehensive risk assessment that supports people from BME backgrounds in the NHS and social care sector in Wales. That works for my constituents in Newport West, and it should be rolled out in England too. For our welfare system, there is a need for common sense and decency to be at the heart of our economic recovery. That is vital to ensure that we do what the Blair and Brown Labour Governments did, which was to take millions of children out of poverty.

A few weeks ago, we saw a Manchester United player shame this Tory Prime Minister and his Ministers into ensuring that free school meals would be provided throughout the summer in England. I say to new Tory Back Benchers, many of whom are auditioning for places on the Treasury Bench: we will not forget the tweets, the press releases and the speeches in this Chamber explaining why free school meals for children in England were not possible, and neither will the people who were affected. I am proud to say that, in Wales, we take our responsibility to our children seriously. We did not need to be shamed into action; the Welsh Labour Government know how crucial it is that we give our children nutritional and accessible meals. As such, we guaranteed that free school meals will be available to Welsh children throughout the summer, because it is the right thing to do.

Tackling child poverty is also achieved by ensuring that there is a secure and realistic safety net for families in all parts of the country. It says a lot that the priority for Ministers has been to reintroduce benefit sanctions, rather than ensure that we keep supporting people through this unprecedented period. It is also about jobs. My right hon. and learned Friend Keir Starmer has been clear that jobs must be at the forefront of the recovery. We know that a well-paid job with good terms and conditions is the best way out of poverty. Like many of my constituents in Newport West, I read the increasingly frequent news from businesses across the country with horror, with announcement after announcement of job losses, shop closures and mergers.

I will be going to see the Orb steelworks close its doors for the last time tomorrow. It is the only site in the UK producing electrical steel. Tomorrow will be a sad day for all of us in Newport and a waste of a highly-skilled workforce who could produce the steel required for the electric cars we need for our greener future. The impact of those job losses on poverty levels, inequality and child poverty will be beyond significant, so this Government need to get a grip now.

The shocking and deadly events of recent weeks and months have shaken us to our collective core. Our families, communities and nations will never be the same again. Our economy and our United Kingdom will never be the same again. We must seize the opportunity to change our way of life for the better, and we must deliver a fairer, greener and more sustainable economy for all of us. That is my pledge to the people of Newport West, and I look forward to the Minister giving us more actions and fewer words.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury 3:30 pm, 2nd July 2020

As is customary at the conclusion of Report stage, I will speak to the issues that have been raised, rather than the full content of the Bill. Let me start by saying how much I enjoyed the splendidly generous and warm speech by my great and hon. Friend Mark Jenkinson. As Members across the House noted, Workington will have a fine voice in the Chamber for many years to come. I was impressed by his ability to smuggle some Cumbrian dialect into the Chamber—I do not know whether it counts as a foreign language, but it was certainly unintelligible to me, which may be true for other colleagues. I take my hat off not only to Mr Harris for identifying his prime ministerial potential but to my hon. Friend for his robust sense of self-confidence. Colleagues normally play down their prime ministerial potential early in their political careers, and I admire his chutzpah, to use a different piece of dialect, in bringing our attention to that. He also acknowledged his predecessor’s capacity to align himself with the Opposition rather than the Whip; I am grateful to him for that. He made some valuable points, and I congratulate him on his maiden speech.

Labour’s new clause 29 and the SNP’s new clause 10 would require the Chancellor to review the impact of provisions in the Bill on child poverty and total poverty and to lay a report before Parliament within six months of Royal Assent. We were treated to a moving and personal speech from Wes Streeting. I congratulate him on his achievement in getting to Cambridge University on the back of that personal experience. Of course, he is right to focus on the importance of combating educational disadvantage—a cause that every Member of the House believes in. I found it surprising that he did not go on to acknowledge the achievement of this Government in raising the number of good or outstanding schools from 68% in 2010 to 86% today, or the fact that the proportion of 18-year-olds from disadvantaged backgrounds going to university went from only 13% in 2009-10 to 21% in 2019.

The hon. Member talked about pensioner poverty but neglected to mention that there are 100,000 fewer pensioners in poverty now than there were in 2010. He talked about jobs but without acknowledging that, at least until the pandemic, which has struck us all and will have had unfathomable effects, as we know, 3.9 million more people were in employment. Specifically, the employment of the poorest 20% was 9% higher under this Government than in 2009-10.

The hon. Member was right to say that the tragedy of an economic crisis is that it hits the least well off the hardest, and that is precisely the inheritance that this Government’s predecessors left to us in 2009-10. As I never cease to remind the House, the financial crisis of 2007-08 was brought about because bank leverage was allowed to rise from 20 times, where it had been for the previous 40 years, to 50 times in seven years under the Blair Government. If hon. Members do not believe me, they can look at the independent report on banking published under Professor Vickers.

I should, however, return to new clauses 29 and 10, some of which are not necessary because the information they seek is largely already in the public domain, including on the distributional effect of tax, welfare and spending policies, on the equalities impacts of tax measures and on poverty rates.

I thank my hon. Friend Sir Graham Brady for his probing new clause 30. I admire his range of references. I thought he was going to reference Stephen Colbert, the American talk show host, but tragically it was Jean-Baptiste Colbert, who produced the line about plucking the feathers from the goose. He is absolutely right. No one would describe him as a hisser, but we do pay careful attention to the points he has made, and I am very grateful to him for raising them. I would also single out my hon. Friend Andrew Griffith, who rightly pointed out that the configuration between APD and the environmental performance of flights is a very blunt relationship indeed, so I thank him for that.

Colleagues across the House will know that new clause 30 would ask the Treasury to review the effect of proposed rate changes on APD. We are working closely with the sector and are closely attuned to its concerns in the face of the pandemic, and of course we have paid close attention to the points my hon. Friend raised. I am sure colleagues will be aware that, even as it is, the current rate will only take effect in April 2021 and will rise by only £2 for a long-haul economy flight, which is the cost of a rather inexpensive coffee at airport prices. It may not be quite as urgent, but the point about the wider need to look at this is well made.

I turn quickly to amendment 4, which seeks to extend the exemption from vehicle excise duty for medical courier charities in clause 86 explicitly to include vehicles carrying human breast milk. Alison Thewliss will know that this amendment is not necessary because the clause already provides for the transportation of human breast milk. The purpose-built vehicles used by the medical courier charities, which are exempt from VED, do not merely transport blood; they transport a wide range of medical product, including X-rays, MRA scans, plasma and human breast milk.

There are many other things I could say in response to other comments, but I will leave it there.

Question put and agreed to.

New clause 19 accordingly read a Second time, and added to the Bill.