Jesse Norman, Financial Secretary to the Treasury, answers MPs’ questions on issues including temporary changes in VAT on businesses in the tourism and hospitality sectors and fiscal support for businesses and self-employed people affected by the covid-19 outbreak.
VAT: Tourism and Hospitality
Mary Robinson (Cheadle) (Con)
What recent assessment his Department has made of the effect of the temporary changes in VAT on businesses in the tourism and hospitality sectors. [907765]
The Financial Secretary to the Treasury (Jesse Norman)
The temporary reduced rate for the tourism and hospitality sectors came into effect on 15 July 2020 and is helping to support the cash flow and viability of over 150,000 businesses and to protect 2.4 million jobs across the UK. On 24 September, the Government announced that they will extend the temporary reduced rate so that it now ends on 31 March 2021.
Mary Robinson
We all want to see a sensible solution to the debate over the covid restrictions in Greater Manchester, but a move from tier 2 will mean the hospitality sector in Cheadle faces the additional blow of tier 3 restrictions, and while reduced VAT in recent months is welcome, businesses in tier 3 will be unable to benefit from the extended scheme. Therefore, in addition to the comprehensive support package, will the Minister consider extending the reduced VAT scheme further in areas that go into tier 3, so that they can do business on that basis for as long as businesses in other parts of the country?
Jesse Norman
As my hon. Friend will know, it has already been extended and she will also be aware that we have put in place a scheme for people who have VAT debt, to allow a payment process that fits their schedule. As the Chancellor has said, to support local authorities at very high alert and to protect public health and local economies, an additional £5 a head, £8 in total, has been made available. That means we have committed up to £465 million in funding for English local authorities through the tiering scheme, and we will announce further details of the eligible expenditures under this scheme.
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Fiscal Support: Covid-19
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
What fiscal support he is providing to mitigate the economic effects of the covid-19 outbreak. [907767]
Douglas Chapman (Dunfermline and West Fife) (SNP)
What fiscal support he is providing to mitigate the economic effects of the covid-19 outbreak. [907769]
The Financial Secretary to the Treasury (Jesse Norman)
The Government have provided an unprecedented package of support for people, businesses and public services throughout the UK, totalling more than £200 billion. That has included helping to pay the wages of 9.6 million people through the job retention scheme and protecting the livelihoods of 2.6 million self-employed workers through the self-employment income support scheme.
Allan Dorans [V]
The Scottish Government are doing what they can to support individuals, businesses and those who have been excluded by the Chancellor from receiving any grants, loans or payment holidays. They are hampered in doing so by not having the autonomy of borrowing powers to meet the unique requirements of the Scottish economy. Will the Government heed repeated calls for the devolution of borrowing powers to enable the Scottish Government to provide additional targeted assistance to those individuals and sectors that they have identified as most in need?
Jesse Norman
As the hon. Gentleman will know, the current state of affairs was agreed between the Scottish Government and the UK Government after exhaustive consultation and discussion by the Silk commission, and that remains the set-up to which the Scottish Government have committed themselves.
Douglas Chapman [V]
With the dual viruses of Brexit and covid-19, we are heading for a winter of discontent and a longer period of mass unemployment. With no Budget announcement, what are the Chancellor’s economic advisers telling him about the Government’s preparations for mass unemployment and the sectors that will be worst hit?
Jesse Norman
The Chancellor has been very clear that because we are in the midst of a pandemic, we are likely to see, and we are indeed already seeing, some redundancies. There is no doubt about the seriousness of the financial and economic situation that we are in. I remind the hon. Gentleman with regard to Scotland that there has been some £7 billion of support for the Scottish Government in dealing with the pandemic and its economic effects, over and above the £21.3 billion provided through the regular Barnett process.
Mr Speaker
May I welcome Abena Oppong-Asare to the Dispatch Box as shadow Minister?
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
Thank you, Mr Speaker. In regions facing tier 3 restrictions, many businesses have been forced to close. In tier 2 regions, many businesses, especially in hospitality, are open in name only, running up all the costs without the customers. What do the Government have to say to those businesses that realistically cannot operate but are not legally required to close?
Jesse Norman
I welcome the hon. Lady to her place. I mourn the loss to his new job of her predecessor, the hon. Member for Ilford North (Wes Streeting), with whom I happily fenced over many sessions on the Finance Bill.
The answer to the hon. Lady’s question is, of course, that we are acutely aware of the financial costs on those businesses, as we are of those on businesses that have been forced to close, and that is why we have put in place an evolving and comprehensive programme of support for business.
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Self-employed People: Covid-19
Andrew Lewer (Northampton South) (Con)
What steps his Department is taking to support self-employed people affected by the covid-19 outbreak. [907770]
Chris Elmore (Ogmore) (Lab)
What fiscal steps he is taking to support self-employed people not eligible for the self-employment income support scheme. [907781]
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
What steps his Department is taking to support self-employed people affected by the covid-19 outbreak. [907785]
Taiwo Owatemi (Coventry North West) (Lab)
What assessment he has made of the adequacy of the extension of the self-employment income support scheme. [907788]
The Financial Secretary to the Treasury (Jesse Norman)
The Government have taken unprecedented steps to support the self-employed, as the House will be aware. So far, the Government have paid out £13.4 billion of support through the self-employment income support scheme.
Andrew Lewer
I recently had a Zoom call with Deborah Annetts, the CEO of the Incorporated Society of Musicians, and Jordan and Steve from a local Northampton band called The Keepers, and they highlighted the problems that self-employed musicians currently face. Will my right hon. Friend support struggling musicians such as The Keepers by considering either a freelance support scheme or a box office top-up to help to make socially distanced gigs feasible?
Jesse Norman
I thank my hon. Friend for his question. With a name like Jesse Norman—my hon. Friend will know that there was an American opera singer, now alas dead, of the same name—and as someone who has been involved in arts organisations and, indeed, as a pretty incompetent musician myself, I am extremely aware of the concern that he raises, and rightly so. He will know that the Government have announced a £1.57 billion culture recovery fund, of which some £330 million has been awarded to date to nearly 2,000 cultural organisations. That funding is designed to help performances to restart, to protect jobs and to create opportunities for freelancers across the country. It is also worth mentioning that we have done a considerable amount of work on the film and TV production restart scheme, much of which will have the same effect when it is properly up and running.
Chris Elmore
I have been contacted every day by sole traders and small independents who have fallen through the Government’s schemes. They are excluded and do not qualify for Government support. According to ExcludedUK, 1.6 million people are excluded from any of the Government’s self-support schemes. Last week, in answer to my hon. Friend the Member for Pontypridd (Alex Davies-Jones), the Chief Secretary said that these people had now been covered. They have not been covered. They are excluded and they are desperate for help. Will the Minister set out what support he will provide to the people who are excluded in this country from self-support grants?
Jesse Norman
I am sure that whatever the Chief Secretary said last week was absolutely correct. The hon. Gentleman will be aware that the scheme we have is designed to be as comprehensive as we can make it, consistent with the wider package we are offering and with support rapidly for the largest number of the most vulnerable people. That was the purpose of the scheme. We have continued the theme of supporting the self-employed through the job support scheme, and of course, that itself forms part of a much wider pattern of support for the industry and for businesses.
John Lamont
I very much welcome everything the Chancellor has done to protect jobs, businesses and livelihoods in my constituency and across Scotland. Many of the self-employed constituents in my area will be very grateful for the third grant that is now available to them. Can the Minister set out the number of people who will be eligible for the grant in Scotland?
Jesse Norman
We are unable to predict the exact take-up of the SEISS grant extension across the United Kingdom, but the latest statistics on the second grant demonstrate that self-employed people in Scotland are continuing to receive unprecedented levels of support under the scheme. As of 20 September, 64% of assessed individuals were found to be eligible in Scotland, with 126,000 claims being made, amounting to £318 million of Government support.
Taiwo Owatemi
My constituent Rebecca launched a new business, Purdy’s Pet Shop, in Coventry North West just before the lockdown. Rebecca was told that she was ineligible for the self-employment income support scheme and faced a frustrating few weeks until she was eventually granted a coronavirus business interruption loan. That is just one business among many that fell through the gaping holes of the first self-employment income support scheme. Now it, and many other businesses in my constituency, will also fall through the gaps in the new extension.
Constituents have contacted me about how anxious they feel about how they will survive now that support has dropped to just 70%. Can the Minister tell me how adequate he believes the extension of the self-employment income support scheme is? What will he do to support my constituents who are falling through the gaps of the current scheme and are worried about the reduced financial support it offers?
Jesse Norman
I salute the hon. Lady’s constituent for setting up a new business and for showing the entrepreneurship and aspiration that characterise British business at its best. As she will be aware, we are engaged in the process of supporting vulnerable businesses and people. In the self-employment area, we are doing that through the extension to the job support scheme. She will know that that forms just one element of a much wider picture, including the loans that she has described, tax deferrals, rental support and increased levels of universal credit.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I associate myself with the concerns raised by colleagues cross-party on this issue. It is interesting that every time the Minister comes to the Dispatch Box, he bats off extra support for those people, yet some of them may have qualified for bounce back loans. I am interested to know whether the Treasury knows how many qualified for bounce back loans, because a recent National Audit Office report suggests that the Treasury does not know where the money has gone and what it is being used for, so perhaps he can elucidate.
Jesse Norman
I admire the hon. Lady’s ingenuity in introducing a conversation about bounce back loans to a discussion about the self-employed scheme. The answer is that I do not have the numbers to hand, but of course, if those numbers are available, I will make sure that we write to her with the detail.
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Fiscal Support: Job Retention and Incomes
Mark Logan (Bolton North East) (Con)
What comparative assessment he has made of the effectiveness of fiscal support for (a) job retention and (b) incomes during the covid-19 outbreak in the UK and internationally. [907776]
Harriett Baldwin (West Worcestershire) (Con)
What comparative assessment he has made of the effectiveness of fiscal support for (a) job retention and (b) incomes during the covid-19 outbreak in the UK and internationally. [907777]
The Financial Secretary to the Treasury (Jesse Norman)
The pandemic has unfolded at different paces in countries around the world, and countries have acted in a way that works best for their respective economies. In this country, the Government have put in place more than £200 billion-worth of support to protect people’s jobs, businesses and incomes, and that is one of the most comprehensive economic responses of its kind anywhere in the world. Our goal remains to continue to protect those livelihoods, those jobs and those businesses while we allow the economy to adapt to the changing circumstances.
Mark Logan
Britain’s fiscal support outshines that of our European neighbours, but constituencies such as mine have never really emerged from the economic lockdown. Employment and many businesses are being stretched, and the Mayor of Greater Manchester needs to learn from Bolton Wanderers and start playing ball. Will the Treasury constantly review the financial help on offer for those faced with tier 3 restrictions and, indeed, consider some of the ideas that were forthcoming from my hon. Friend the Member for Cheadle (Mary Robinson) in relation to VAT reduction for the hospitality industry?
Jesse Norman
I am delighted that my hon. Friend draws Bolton Wanderers into a discussion on the Floor of the House of Commons—it is a very fine club. He will know that we have committed almost £500 million of support to English local authorities through the tiering system, and that that comes on top of the £300 million already allocated to local authorities for test, trace and contain activity. He should also be aware that there are grants of up to £3,000 per month, depending on rateable value, through the local restrictions support grant, as well as the expansion that the Chancellor has recently announced to the job support scheme. All of that forms part of our comprehensive package.
Mr Speaker
As a Bolton fan, I expect better results in the future.
Harriett Baldwin
At the beginning of the pandemic, the OECD forecast that unemployment in the UK would rise to 9.1% by the end of this year. It recently revised its forecast down to 5.3%. Can the Minister confirm that the winter jobs plan will continue to provide the right kind of support to help our flexible labour market to adapt to the pandemic?
Jesse Norman
My hon. Friend is absolutely right to highlight the point about the OECD’s forecasts, and also the astonishing flexibility and effectiveness of our labour markets. She will know that the Government continue to adapt their response and, as the Chancellor mentioned a few minutes ago, we will shortly be launching the £2 billion kickstarter scheme alongside the job support scheme. That will be a tremendous boost for the prospects of young people across the country.
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Topical Questions
Carol Monaghan (Glasgow North West) (SNP)
It is noticeable how many Members have raised today the issue of the self-employed and freelancers, such as musicians, actors and dancers, who have had little or no support throughout the pandemic. Rather than suggest that they abandon years of dedication and training, will the Chancellor now consider initiatives such as a universal basic income to protect our valuable arts sector? [907826]
The Financial Secretary to the Treasury (Jesse Norman)
We recognise the concern for the valuable arts sector that the hon. Lady describes, which is why we have put £1.57 billion towards it. As I have said, £330 million of that has been released, and a further release will be made in the next few weeks. That is because we believe in that sector and support those people. Of course, other schemes are already in place—I have highlighted the support for independent production and films, for example—from which those affected can derive benefit.
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Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]
My constituent, Alex, is a Blue Badge guide. Her income is just above the threshold for the self-employment income support scheme. The money that she has saved to cover her tax bill pushes her over the threshold for universal credit. Despite moving her tours online, Alex is earning very little. Given that the situation looks set to continue, what advice does the Minister have for her and the 3 million other people excluded from the Government’s covid-19 financial support? [907833]
Jesse Norman
I thank the hon. Lady very much for the concern that she describes. I understand the problem. As she will know, the situation with people on lower income levels who may also be on universal credit is that it is a flexible benefit, which allows the top-up to income received. That is also true with the support received through the job support scheme for self-employed people.