Jesse Norman, Financial Secretary to the Treasury, answers MPs’ questions.
Financial Support Schemes: Equitable Access
If he will ensure that people who are unable to participate in work as a result of (a) home schooling and (b) following other Government covid-19 guidance have equitable access to financial support schemes. (911350)
Since their introduction, the coronavirus job retention scheme and the self-employment income support scheme have been available to those unable to go to work because of caring responsibilities arising from covid-19, such as caring for a home schooling child or caring for a vulnerable individual. Those who are unable to work from home and have been told to shield have also been eligible for these support schemes, as well as for statutory sick pay and employment and support allowance.
The Chancellor has let the financial burden of covid-19 fall on women. They have undertaken twice as much home schooling as men. One in five have had to cut their hours. Some 78% of working mothers have not been offered furlough and 71% of those who asked for it have been refused. Will the Chancellor recognise that once again women have disproportionately paid the price of the inequality in his policies? Will he undertake an immediate equality impact assessment and set out in his Budget how he will offer redress for these widening gendered inequalities?
The truth is that this pandemic has had a desperately difficult effect for the whole of the UK economy, and for families and people across our country and regions. It is appropriate to recognise the totality of the difficulty we find ourselves in. It is true that many women have found themselves in the position of either caring for home schooling or vulnerable individuals. They are supported and protected through the schemes we have put in place. Of course, over and above those schemes, we have also put in place significant amounts of support for remote education, laptops and councils to help vulnerable individuals.
Earlier this month, the shadow Chancellor successfully called on the Chancellor to make it clear that working parents and others can be furloughed owing to childcare responsibilities. Most employers will want to do the right thing, but where an employer is refusing to follow the guidance and offer a parent furlough for childcare reasons, can the Minister tell me who the parent should report that to and what action will be taken?
As the hon. Member will know, furlough is an arrangement reached between companies and their employees. Her Majesty’s Revenue and Customs and the Government do not have direct involvement in that. What they say is that where an agreement can be reached between the two sides we will support them, as laid out in one of the most generous schemes available in any country around the world. As I said, that is just one part of a much wider panoply of support for people at risk through the pandemic.
Self-employment Income Support Scheme
What steps his Department is taking to help ensure that the self-employment income support scheme equitably supports people whose tax payments have been affected by maternity or paternity leave. (911356)
The self-employment income support scheme is one of the most generous in the world and has received claims from almost 2.7 million people so far, totalling more than £18.5 billion. The amount of the scheme grant is determined based on the applicant’s average profits from self-employment in the previous three tax years, as reported through their tax returns. By calculating the grant on an average of three years of profits, the scheme supports people who saw a dip in profits for any reason, including pregnancy.
The Chancellor likes to claim that the UK offers one of the most generous support schemes for self-employed people in the world, but self-employed women who have taken maternity leave in the past few years are not supported generously at all—in fact, they have received a lot less financial support than their peers who have not taken maternity leave. The charity Pregnant Then Screwed reported that around 75,000 self-employed women have been subject to—[Inaudible.]
Did you get any of that, Minister Norman?
If you can get something out of it, please do.
If I may just say, the hon. Gentleman is wrong. We are not talking about a claim that is not validated by third parties; it is understood internationally that the scheme is one of the most generous in the world. He will be aware that the issue is subject to legal challenge, which limits what I can say, but I can tell him that the Government are well aware that some self-employed people found that their eligibility for the scheme was affected if they had taken time out of their trade in 2018-19, which is why, in June last year, the scheme’s eligibility criteria were revised to ensure that people in that situation were able to claim self-employment income support.
Since the beginning of the pandemic, the UK Government have consistently failed to prioritise support for women on maternity leave. Despite the issue being raised by me and a host of others repeatedly in this House, the UK Government were taken to judicial review last week by Joeli Brearley and the tireless campaigners at Pregnant Then Screwed. Do the UK Government now accept that it is not a sabbatical, sick leave or a holiday—it is maternity leave? Will they end their discrimination against 75,000 self-employed mothers?
I am not sure whether the system is working but, as the hon. Lady will know from my previous remarks, the issue is subject to legal challenge so I cannot discuss it. I will say, though, that I met maternity groups as part of the excluded in early December, and we have taken steps to remedy the situation, where we have been able to do so, in relation to those who took time out in the year 2018-19.
Self-employment Income Support Scheme.
What fiscal steps he is taking to support self-employed people ineligible for the self-employment income support scheme. (911358)
What steps his Department is taking to support the newly self-employed during the covid-19 outbreak. (911361)
The self-employment income support scheme was designed to target support at those who most need it while protecting the taxpayer against error, fraud and abuse. The Government recognise that some of the rules and criteria that have been vital to ensuring that the scheme worked for the vast majority have meant that, in some cases, people were not able to qualify. This is one reason why the Government put in place a much wider £280 billion support package, including increased levels of universal credit, bounce back loans, tax, deferrals, rental support, mortgage holidays, self-isolation support payments and other business support grants.
It is understandable that, as support schemes were constructed at short notice, there would be gaps in them. It is less understandable why, a year later, those gaps have not been better closed. Many of my constituents are among the millions who have been excluded from support schemes so far, so, as we approach that anniversary, what message does the Minister have for them?
The message would be that the Treasury is doing everything it can to protect jobs, families and livelihoods in the face of the worst pandemic crisis that we have experienced in recorded history. It is important to say that, in the case of this scheme, we have spent considerable time engaging with groups that have brought forward potential ways of addressing some of the gaps in support that may exist. As I mentioned, we have had meetings in December and evaluated suggestions all the way through last year, including a concrete suggestion in relation to the directors income support scheme, so we are heavily leaning into this issue.
I want to raise the case of my constituent, Teresa McGeough, who is a newly self-employed special educational needs expert. She has not been eligible for any financial assistance during the pandemic. Does the Minister think that the Government are doing enough to help people such as Theresa and others?
As I have said, the Government are doing everything they can and have been working round the clock for a year to address the full needs of the country across all the different aspect of our economy and society, including through support for the self-employed.
The self-employment income support scheme’s third grant closes this Friday. The crisis has not ended, but the Chancellor has not provided many details on the future of the scheme. Will the Minister explain why he thinks it is right that employees can be furloughed until 30 April but self-employed people have no clarity about the future of support beyond the end of this week?
I think that it is well-understood that the Chancellor will be setting out further plans in the March Budget. It is normal for this time of year for different decisions to be consolidated into that important fiscal event for well-known reasons.
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? (911417)
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 support packages that my right hon. Friend has made available to the hospitality and tourism industries over the course of this pandemic have proved invaluable to thousands of businesses in Blackpool; but as we look to reopen those sectors later on this year, will he commit to extending the reduction in VAT for tourism, hospitality and leisure businesses to help maintain thousands of jobs in my constituency? (911423)
As my hon. Friend says, and I thank him for it, the temporary reduced rate of VAT was introduced to support the cash flow and the viability of over 150,000 businesses and to protect 2.4 million jobs in the hospitality and tourism sectors. It was extended in September and extended again, and will now run until 31 March of this year. But the relief comes at a significant cost, and while the Government keep taxes under review, we have no current plans to extend it further. I remind my hon. Friend that there are many other aspects of our financial support that may be of assistance to his constituents.