Topical Questions

T1. If he will make a statement on his departmental responsibilities.

A month ago, I set out our plan for a stronger economy, protecting and supporting jobs, driving up economic growth and cutting the universal credit taper rate, giving the lower-paid in our society a tax cut worth £2.2 billion.

In the 2019 Queen’s Speech, the rationale for reform was set out as being to

“ensure our tax system is supporting Scottish whisky and gin producers and protecting 42,000 jobs”—

including many in my constituency. How would the Chancellor square that with the actual proposals, which will tax domestic producers more than those of imported cava, prosecco and champagne; do not take into account how people consume spirits with mixers, the sugar and calorific content or his own Government’s health policies; and actually increase the competitive disadvantage of an important domestic sector compared with the international one?

Our reforms of the alcohol duty system usher in a system that is simpler, fairer and better for public health. I am not entirely sure that the hon. Lady has got the details right on this. In fact, for Scotch whisky, this is an improvement because we have levelled the playing field for higher-strength drinks, which the Scotch Whisky Association had been calling for. With regard to the differential between domestic and foreign producers, because English sparkling wine is produced to a lower alcohol content naturally than foreign sparkling wine, it will actually, for the first time, enjoy a tax advantage under the new system. Perhaps most relevant immediately, we also froze all alcohol duties—a half-a-billion-pound tax cut for British people this year.

I want to take this opportunity to put on record my thanks to the Mother of the House, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), who, in the nearly 40 years that she has been in this place, has done more for the rights and representation of women than anyone else.

At the weekend it was briefed that the Government will set up a star chamber to crack down on waste—which, frankly, has been the hallmark of this Government. Indeed, the Government’s own accounts show that the incompetent way in which the business support schemes were structured meant that the Chancellor has allowed fraudsters to walk away with £6.5 billion of taxpayers’ money. That would be more than enough to cut the basic rate of income tax by a penny in the pound, worth £370 a year to basic rate taxpayers. So can the Chancellor explain why quick electronic checks such as cross-referencing with HMRC tax data were not conducted before money was handed out? Given this huge waste of taxpayers’ money, can the Chancellor confirm that he will be the first witness in front of his own star chamber?

The hon. Lady would usually be on top of the numbers. She will understand that there is a difference between a one-off saving of £6 billon and an annual saving on a tax cut of £6 billion. Those two things are not like-for-like comparable. On the numbers she refers to, I am happy to tell her that in the most recent analysis from the Department for Business, Energy and Industrial Strategy’s independent adviser, the estimate of fraud was reduced by a third because of the actions that the Government had taken, which is welcome news. But of course we remain committed to tackling fraud. That is why in the spring Budget we invested an extra £100 million in HMRC, with 1,200 new people to tackle fraud, and they are expected to recover over £2 billion over the next 12 months. With regard to bounce back loans, 55,000 loans worth up to £2 billion were recovered and stopped. We are absolutely committed to tackling fraud wherever we see it.

The Chancellor might be relaxed about handing out £6.5 billion, or perhaps it is £4 billion, to companies that did not deserve it, but we on this side of the House are absolutely not. It is reported that a £4.7 million loan was given to a business founded just two days before it was handed the cash. It should not be beyond the wit of Government to get money to where it needs to go—to great British business—without allowing fraudsters to steal taxpayer funds. Leaving the till open and unattended for thieves to clear out would be a sackable offence for a shop worker, yet apparently it is acceptable for the Chancellor of the Exchequer. Staggeringly, only one in 40 cases where fraud has been reported is actually being pursued. Let me ask the Chancellor this: when was he first alerted to this fraud, and how much does he think taxpayers will get back from the billions of pounds lost to fraudsters?

As I have said, the new taxpayer protection taskforce at HMRC is expected to recover between £1 billion and £2 billion in the next 12 months, and has already made a good start on that. It is fair to reflect on where we were in spring 2020. I remember being at this Dispatch Box every other day. I remember Members from all parts of the House rightly holding the Government to account for getting money to businesses in a matter of hours and days, not weeks. In fact, I heard from the hon. Member for Oxford East (Anneliese Dodds), the shadow Chancellor at the time:

“We need a full guarantee for…some loans…We are running out of time, so how will the Chancellor ensure that the bounce-back loans get to the businesses that need them?”—[Official Report, 27 April 2020; Vol. 675, c. 110.]

The then shadow Business Secretary, the right hon. Member for Doncaster North (Edward Miliband), said that the Government should:

“urgently look at 100% underwriting of loans and simplified lending criteria.”

Indeed, the hon. Lady herself wrote to me and said that

“the process for SMEs to apply for such loans appears cumbersome.”

I make no apology for making sure—

Order. He might want to apologise now—we cannot take so long on the first two questions from either Front Bench.

T5. I thank the Chancellor for his hugely successful plan for jobs. I recently visited an organisation in Telford called Teach A Trade, which successfully trains long-term unemployed and older people changing careers to get gas and electrical qualifications, which are in short supply in my constituency. What is his Department doing to work with organisations such as Telford’s Teach A Trade to make these courses more accessible to more students? Can he please tell me what his Department can do to help Telford’s Teach A Trade so that it can expand the excellent work it is doing?

Order. I appeal to Members that if you all want to get in, you have to help each other. If you are not going to help each other, do not be disappointed when you do not get in. It is not fair, and the same goes for the Front Benchers. Topicals are meant to be quick, short and speedy to keep the business going. We are not being fair. Whoever is answering that question, please do so briefly.

As we build a strong economy, we need to raise skills. That is why we announced in the spending review an increase of £3.8 billion in skills spending over this Parliament. The spending review included funding for a specific 50-plus training scheme to support people like those being helped by Teach A Trade so that they can retrain and stay in work. I am happy to speak further to my hon. Friend about how we can support Teach A Trade and others like it to do what they do.

In this season of generosity and good will, will the Chancellor deliver a gift to the hard-pressed hospitality and tourism sector and amend the Finance (No. 2) Bill to extend the lower rate of VAT beyond March next year?

I am glad that our VAT cuts extend all the way to spring. It is a £7 billion tax cut, and next year, as I have said, there is a 50% discount on business rates.

Well done, Chancellor.

T7. The recently announced coalition deal between Welsh Labour and Plaid Cymru contains a tourism tax, which is likely to do significant damage to Porthcawl, a seaside town in my Bridgend constituency. Does my right hon. Friend agree that imposing a new tax on a sector already hit hard by Welsh Government restrictions is further evidence that Labour-nationalist coalitions are bad for business, bad for the economy and bad for our United Kingdom?

My hon. Friend makes an excellent point about the Welsh Government. This Government are supporting hospitality businesses with a lower rate of VAT till spring worth £7 billion and a business tax cut next year that has Barnett consequentials for the Welsh Government, so hopefully they can do the same.

T2. New research from the TUC shows that 647,000 workers in sectors such as hospitality, retail and entertainment do not qualify for statutory sick pay. Before the Chancellor points to the Government’s temporary support scheme, 64% of people who apply for it are told that they do not qualify. The Government have been quick to hand massive contracts to their friends, so why can they not improve statutory sick pay for workers so that more people can afford to self-isolate and recover from illness when they need to?