Throughout this crisis, our overriding economic priority has been to support people’s jobs and businesses through a range of measures worth more than £280 billion, including the furlough scheme, tax cuts, tax deferrals, loans and grants. There will be a Budget on 3 March, when we will set out the next steps in our economic response to coronavirus.
Last week the Chancellor received a detailed and costed policy proposal for a targeted income grant scheme, written by Rebecca Seeley Harris and supported by the gaps in support all-party parliamentary group. That scheme would be a vital first step in giving meaningful financial support to many of the millions who have been locked out of the current schemes and who are desperate, after nearly a year of the covid pandemic. Can the Chancellor tell us today whether he plans to progress with that proposal, or does he have another scheme in mind for the millions in need of support?
I am happy to tell the hon. Lady that my right hon. Friend the Financial Secretary to the Treasury met the authors of the report back in December and is considering it alongside all the other submissions that we receive at the Treasury.
Mr Marcus Fysh (Yeovil) (Con) [V]
What will my right hon. Friend do to make the UK a more attractive destination for investment and capital formation, to encourage the jobs and opportunities of the future that people rely on the private sector to provide?
My hon. Friend is right about needing the private sector to drive growth and create jobs. I am pleased to tell him that the Prime Minister and I chaired the first meeting of the Build Back Better Business Council, where we outlined our plans to invest in infrastructure, innovation and skills alongside businesses. We have also established a new Office for Investment, led by Lord Grimstone, which is charged with securing high-value investment opportunities, and I look forward to hearing from him ideas that we can productively take forward.
In recent days, the Treasury has been at loggerheads with the Department for Work and Pensions, insisting on taking £20 a week from the pockets of 6 million families. It has also been at loggerheads with the Scientific Advisory Group for Emergencies, by claiming that financial hardship is not inhibiting self-isolation. Why is the Treasury putting our economic and health recovery at risk in this way?
The hon. Lady should not believe everything she reads in the newspapers. The Treasury and this Government have put in place a comprehensive and generous set of support to help people get through this crisis, and the results show that we have protected those on the lowest incomes the most.
I was actually following the words of the Secretary of State for Work and Pensions and of SAGE, but I appreciate the Chancellor’s response. The kickstart scheme was much heralded, but yesterday we learned that it appears to be missing out around 99 of every 100 young jobseekers. What does the Chancellor say to them today?
I am not entirely sure I know the figures that the hon. Lady is referring to. What I can say is that, since this scheme was announced at the beginning of July and opened for applications in September, it has created over 120,000 jobs for young people. That is, I think, an extraordinary achievement. I pay tribute to the team at the DWP for doing that. I am grateful to the thousands of businesses that are taking part in the scheme. They are working with us to provide hope and opportunity to a generation of young people so that they are not scarred by coronavirus, but can look forward to a brighter future.
Jason McCartney (Colne Valley) (Con) [V]
With the lockdown or some form of restrictions set to continue well into the spring, will the Chancellor please give some certainty to those businesses and individuals struggling financially by announcing an early extension to his various support packages, including help with VAT, business rates and stamp duty, the self-employment scheme and, of course, the universal credit uplift?
My hon. Friend will I hope appreciate that the various things he just mentioned total about, I think, £20 billion or £30 billion, so he will understand it is reasonable that we consider all these things in the round at Budget, when we will set out the next stage in our economic response to coronavirus.
The Office for Budget Responsibility estimates that HMRC will forgo around £800 million in customs income and VAT over the next year. Some is deferred, but much is forgone. Will the Chancellor tell us what he is doing to make sure that that number shrinks and that revenue comes in at a time when the Exchequer needs it really very badly?
I will have to go and check the exact figures, if the hon. Lady will forgive me for not knowing the specific paragraph that she refers to. In general HMRC is providing easements over the next few months as we transition to a new set of trading relationships, but she can rest assured that we are always mindful of the impact on revenue and intend fully—very much so—to have a robust set of mechanisms in place. As she will know, there is a phased response for getting to that point between now and July, and hopefully we can work with her to make sure that that path is as seamless as possible.
The Chancellor has been widely praised for his work in recent months, but he has also been honest about difficult decisions ahead. I have had constituents raise concerns with me about capital gains tax. He will know that the current rates were set to optimise revenue from the tax. I know he cannot comment on individual measures, but can I seek his assurance that he will not take any steps to raise taxes without doing a proper assessment of the Laffer curve principle that higher rates do not always lead to higher revenues?
I thank my right hon. Friend for his question, which tempts me into indiscretion. He may be aware of this, but HMRC publishes annual estimates to illustrate the impact of changes in tax rates in a document sexily entitled “Direct effects of illustrative tax changes”. It is worth saying, however, that these estimates are themselves uncertain, because of different levels of behavioural response to tax changes, the potential for wider macroeconomic impacts and, of course, the interaction with other measures.
The pubs and hospitality sector so far has done everything that has been asked of it during the pandemic, but so far 46% of pubs have not received local restrictions support grants for November, let alone December, and 74% of pubs have yet to receive the Prime Minister’s Christmas bonus of £1,000, so what will Ministers be doing to speed up these payments and when will the pubs and hospitality sector get its money?
It is absolutely right that businesses get the funds as quickly as possible. What I would say is that central Government have disbursed that funding to local councils across the country, so it is actually for businesses to take up with their local authority why they have not received the money. There are two sets of grants: there are of course our monthly grants, which have been going for a while now, and the one-off payments of up to £9,000 that we announced earlier this year. But the hon. Gentleman is right to urge urgency. I know my colleagues in the Business Department are doing exactly that with local councils, but ultimately the responsibility will lie with individual councils.