PARLIAMENTARY DEBATE
Topical Questions - 7 December 2021 (Commons/Commons Chamber)

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.

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.

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.

At the beginning of the crisis, we improved how statutory sick pay works, making it payable from day one. We also changed some things in universal credit and indeed expanded its definition. We also put in place self-isolation payments to help.

I chair the caucus of 40 Conservative MPs who have the River Severn—Britain’s longest river—flowing through their constituencies. The river is causing increasing destruction and chaos for our communities with the increasing floods. Will the Minister meet the River Severn Partnership, a consortium of councils up and down the River Severn, to hear what the flooding Minister—the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Taunton Deane (Rebecca Pow)—heard earlier this year during her visit to Shrewsbury, that there will be a gross value added uplift of up to £150 billion if we find a solution for managing Britain’s longest river?

We recognise the important work of the River Severn Partnership. Between now and 2027, £170 million will be invested in flood and erosion risk management in the English Severn and Wye region, but I would be happy to meet my hon. Friend and colleagues to talk further.

The hon. Lady raises an important point. Of course, we delivered a record settlement for the Department of Health and Social Care at the recent spending review. That budget will rise to £177.4 billion in 2024-25. NHS dentistry is a top priority of that spend.

Can the Minister confirm that the £1,000 a year tax cut delivered through changes to the universal credit taper rate will begin to be seen in people’s bank accounts this side of Christmas?

Yes.

The hon. Member will know that an independent review has already been carried out by Lord Morse, and the Government accepted all but one of its recommendations. HMRC does have a helpline, but it is important to continue to ensure that we look after those who are most vulnerable.

I thank my right hon. Friend the Chancellor for all that he is doing on levelling up and, in particular, for the establishment of the Darlington economic campus. Can he update the House on how things are progressing and how many of his team are now enjoying life in Darlington?

We are seeing a growing number of Treasury staff working in Darlington along with many Ministers spending time there. I am due to be there tomorrow and I think that my right hon. Friend the Chief Secretary to the Treasury will also be there this week.

No, I did not attend any parties.

May I advise my right hon. and learned Friend that the Government’s step in the Budget last month to cut business rates by 50% for retail, hospitality and leisure companies, which means that 90% of all eligible businesses will see a cut of at least 50%, has been warmly welcomed across my Borough of Bexley? It will help many business to not only survive, but flourish.

I am very grateful to my right hon. Friend for mentioning that. We have business rates relief of almost £1.7 billion next year for retail, hospitality and leisure, which is part of a package of £7 billion over the next five years.

Transport sits at the heart of the spending review that has just concluded, and of course we have the £96 billion integrated rail plan. I am very happy to look at the scheme to which the hon. Member refers, but obviously Transport Ministers are engaged in a constant process of making sure that we deliver the projects that are the best value for money and result in the greatest transport bonuses across the country.

Can the Chancellor confirm that, contrary to industry suggestions, the Government remain committed to legislating for access to cash as soon as possible?

Absolutely, I can. We will legislate, regardless of what the industry brings forward.

Florence Roby Ltd was turned down when it bid for Government contracts for personal protective equipment last year, despite a 50-year track record of high-quality production. It was not asking for special favours; all it wanted was a fair chance of winning Government contracts. Some £3.5 billion was handed out to friends and donors of the Conservative party through a VIP lane. That is in stark contrast to the experience of Florence Roby Ltd. When will good people such as my constituents get access not to a VIP lane, but to a level playing field?

We worked at speed to secure the PPE needed to protect our frontline workers, and we supplied over 58,000 different healthcare settings. We now have a four-month stockpile of all critical PPE to make sure that the NHS can continue to be protected. All these bids are assessed in line with standard guidance to make sure that there is total equity in that process. Any suggestion to the contrary is fundamentally misleading.

Harrogate has been the trial and development location for universal credit, and I have seen how it helps people make work pay. Does my right hon. Friend the Chancellor agree that rolling it out further, and migrating people currently on legacy benefits, will help even more people make work pay?

My hon. Friend is absolutely right. This Government are committed to making sure that work always pays, and that is why universal credit is such an improvement on the previous system—an improvement that the Opposition did not support at all.

The Minister will be aware that Viktor Fedotov, the secret co-owner of Aquind, has been implicated in a £72 million fraud scheme linked to Putin’s Russia. Can the Minister say what due diligence has been done on the project company and its owners, and if he and ministerial colleagues will protect our national infrastructure from these alleged fraudsters by stopping the disastrous project once and for all?

The Government remain absolutely committed to protecting this country from illicit finance. We have been a leader in the global community, making this place the safest place to do business, and we will continue in that vein.

A key way to support economic growth is to help level up our forgotten high streets, such as Eston Square, where the old precinct building is blocking key investment and preventing new businesses from moving in. When the Chancellor is next up in Teesside, will he come with me to Eston, and meet leaders at Redcar and Cleveland Borough Council to see what can be done to level up Eston Square?

Yes, I would be very happy to. I am fresh from my visit to Yarm High Street last week to see levelling up in action, and I am back up in the north-east this week.

The Chancellor of the Exchequer will be aware of the considerable public unease about the proposed demutualisation of Liverpool Victoria. Will he therefore consider sympathetically the cross-party letter he has received from over 100 parliamentarians calling for a review of the law governing mutuals?

As the hon. Gentleman knows, we have had considerable engagement on this subject. This is a matter for the Financial Conduct Authority, and we have discussed it. Obviously, members will now vote on the proposal. On the broader issue of how this sector is treated, I remain willing to engage with him on further changes and reforms that may help it in future.

Ministers will know of the importance of the Humber ports to the regional and national economy. Access to Immingham and Grimsby ports is in part via the A180, which has an old concrete surface that is crumbling and in need of urgent repair. This afternoon I will meet Highways England to discuss that. May I tell it that the Chancellor will fund those improvements?

I commend my hon. Friend for his inventiveness. Our ports lie at the heart of our prosperity, and I am delighted that the Humber freeport is imminently going live, alongside the Teesside and Thames freeports. I wish him the best of luck in making his case for that investment.