Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the potential merits of providing support to businesses in their first year of trading.
Answered by Kemi Badenoch - President of the Board of Trade
The Government regularly engages with businesses and representative groups to ensure support provided to businesses is appropriate, including support for those businesses recently established and in their first year of trading.
For example, the British Business Bank’s Start-Up Loans programme provides entrepreneurs starting their own businesses with loans of up to £25,000 and 12 months of dedicated mentoring support. At the Spending Review 2020, the Chancellor announced additional funding for this programme to deliver 1,000 more loans in 2021/22 than were originally funded in the March 2020 Budget.
The Government also offers generous tax incentives to investors in early stage companies looking to grow, in the shape of the Enterprise Investment Scheme (EIS) and Seed EIS (SEIS). These are intended to help tackle market failures in young companies’ access to finance by helping them raise the capital needed for their long-term growth until they have a sufficient track record to access mainstream markets.
Additionally, further reducing the tax burden on businesses, the Government has lowered the corporation tax rate from 28% in 2010 to 19% today - this is the lowest rate in the G20 and benefits over one million companies, large and small.
In addition to these measures and to support businesses through Covid, the Government has spent over £280 billion to put in place a comprehensive package of support. Businesses may be eligible to benefit from elements of this package including billions of pounds in wage support, government-backed loans and general and sector-specific grants. The Government urges businesses to visit the online Coronavirus Business Support Finder Tool for tailored information on how to access support available to them.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will publish a list of the projects funded under the National Infrastructure Strategy; what the timescale is for the (a) disbursement and (b) implementation of each of those projects; and how much funding has not yet been allocated to specific infrastructure projects.
Answered by Jesse Norman
The National Infrastructure Strategy set out the Government’s plan to transform the UK’s infrastructure to help level up the country and put the UK on the path to net zero emissions by 2050.
The Strategy announced record levels of public investment in strategic roads, digital infrastructure and flood defences, alongside measures to encourage and increase private investment, such as the creation of a new infrastructure bank for the UK.
The Strategy includes different kinds of funding commitments, from individual projects like HS2, to overarching programmes, such as £5bn for the rollout of gigabit capable broadband. A number of programmes will be administered by delivery agencies like the Environment Agency and Highways England who will allocate funding to individual projects.
The Infrastructure and Projects Authority will publish the next iteration of its annual National Infrastructure and Construction Pipeline in 2021, as stated in the NIS, and this will list future planned investments and procurements across infrastructure and construction.
The National Infrastructure Strategy also included a timeline of forthcoming Government publications which indicated where future action can be expected.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Written Statement of 17 December 2020, Financial Services Update, HCWS678, what progress has been made in compensating the bondholder victims of London Capital & Finance plc.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that this has been a very difficult time for LCF bondholders. That is why on 23 May 2019, following a request from Charles Randell, Chair of the FCA, we formally directed the FCA to launch an independent investigation into the events at LCF, and approved the FCA’s appointment of Dame Elizabeth Gloster to lead it.
Dame Elizabeth’s independent investigation considered the events and circumstances surrounding the failure of LCF and whether, in its supervision of LCF, the FCA discharged its functions in a manner which enabled it to effectively fulfil its statutory objectives. Dame Elizabeth delivered her report to the FCA on 23 November 2020, and the report alongside the FCA’s response was published on 17 December 2020. A Written Ministerial Statement was made on the same day setting out the Government’s response. These documents are available online at gov.uk.
Dame Elizabeth makes nine recommendations for the FCA. The Government welcomes the FCA’s apology to LCF bondholders and their commitment to implement Dame Elizabeth’s recommendations.
HM Treasury has also accepted the four recommendations that Dame Elizabeth Gloster made for the government regarding the regulatory regime. The Written Statement set out the steps that the Government will be taking to implement them.
As set out in the Written Statement, there are three main channels through which London Capital & Finance plc (LCF) bondholders can seek compensation. These are the administration process, the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority’s (FCA) Complaints Scheme.
The Written Statement also set out that, taking into consideration the specific and complex set of circumstances surrounding the collapse of LCF, the Treasury will set up a compensation scheme which will assess whether there is justification for further one-off compensation payments in certain circumstances for some LCF bondholders. The Government will announce further details in due course.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on the economy of introducing a cap to the Standard Variable Rates charged to closed book mortgage prisoners.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority’s 2019 Mortgage Market Review found that direct price intervention was not required at this time as the current market is working well for the vast majority of borrowers. FCA data released in July 2020 stated that customers with inactive lenders pay on average just 0.4% more than borrowers with the same lending characteristics with active lenders. In addition, the recent London School of Economics report on mortgage prisoners noted “capping SVRs at a level close to the best rate for new loans could create harm in other parts of the market, and we do not recommend it”.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to reduce the number of mortgage prisoners.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The government is committed to helping mortgage prisoners where they will see genuine benefit. This has included work with the Financial conduct Authority to implement rule changes to its mortgage lending rules, removing the regulatory barrier that prevented some customers, who otherwise may have been able to switch, from accessing new products. The new rules should allow customers to switch to an active lender as long as they meet the lenders’ risk appetite and meet certain criteria, such as not looking to borrow more and be up to date with payments. Inactive lenders have now started contacting borrowers who have been struggling to switch, setting out new options that may be available for them on the active market. A number of lenders have also come forward with products specifically for these borrowers.
In addition, the Money and Pensions Service (MaPS) launched online information and a dedicated phone service (accessible via MaPS’ main contact number) as a key source of information and advice for borrowers with inactive lenders, including signposting to specific brokers that will be able to help them look for a deal with an active lender.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans his Department has to include the (a) Local Enterprise Partnership and (b) Mayoral Combined Authority in the Sheffield City Region in fiscal decision making in their local economy through the Further Education Reform White Paper.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
Local Skills Improvement Plans will build on the work that Mayoral Combined Authorities and Local Enterprise Partnerships have done through their establishment of Skills Advisory Panels.
Mayoral Combined Authorities play a vital role across their local skills system and most already have responsibility for delivering certain adult education functions and will continue to do so. Mayoral Combined Authorities will be consulted by the Department for Education in the development of these plans.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to extend the 5 per cent VAT business relief to (a) the hospitality sector and (b) all other sectors.
Answered by Jesse Norman
The temporary VAT reduced rate came into effect on 15 July 2020 and was initially scheduled to end on 12 January 2021.
In order to continue supporting the cash flow and viability of over 150,000 businesses and to protect 2.4 million jobs, the Government extended the temporary reduced rate of VAT (5 per cent) to goods and services supplied by the tourism and hospitality sectors until 31 March 2021.
While the Government keeps all taxes under review, this relief comes at a significant cost to the Exchequer, and there are currently no plans to extend the length or the scope of the reduced rate further.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans his Department has to extend the business rates holiday for the hospitality sector.
Answered by Jesse Norman
This year the Government has provided an unprecedented business rates holiday for eligible retail, hospitality and leisure properties due to the direct adverse effects of COVID-19, worth about £10 billion, and has frozen the business rates multiplier for all businesses for 2021-22.
The Government is considering options for further COVID-19 related support through business rates reliefs. In order to ensure that any decisions best meet the evolving challenges presented by COVID-19, the Government will outline plans for 2021-22 reliefs in due course.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with the Secretary of State for Education on providing additional financial support to supply staff ineligible for the Coronavirus Job Retention Scheme.
Answered by Jesse Norman
Schools will continue to receive their budgets for the coming year as usual, regardless of any periods of partial or complete closure. Schools have autonomy over these budgets, and their employment arrangements and decisions on staffing are made at the local level.
Schools can continue to engage supply teachers and other supply staff during this lockdown period and schools may want to consider how supply teachers, and other temporary staff, can assist in delivering face to face education to pupils who continue to attend school, and in delivering remote education for those who are not attending.
The Department for Education is considering what further guidance may be helpful to schools in workforce planning, and schools should continue to check updates to the department’s guidance on restricting attendance in the national lockdown.
If supply staff employed via employment agencies are unable to work due to COVID-19, their employment agency can place them on furlough and use the Coronavirus Job Retention Scheme to claim for 80% of their wages, including during school holiday periods, provided that the eligibility criteria are met.
Asked by: Dan Jarvis (Labour - Barnsley Central)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with Secretary of State for Work and Pensions on the effect on the number of universal credit claimants of teaching staff agencies not using the Coronavirus Job Retention Scheme.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
The Department for Work and Pensions does not collect data on the number of supply teachers claiming Universal Credit.
If teaching staff employed via employment agencies are unable to work due to Covid-19, their employment agency can place them on furlough and use the Coronavirus Job Retention Scheme to claim for 80% of their wages, including during school holiday periods, provided that the eligibility criteria are met.
However, schools can continue to engage temporary staff such as supply teachers during this lockdown period, and schools may want to consider how this staff can assist in delivering face to face education to pupils who continue to attend school, and to deliver remote education for those who are not attending.
Individuals who unfortunately lose their job or face a reduction in their earnings may become eligible for support through the welfare system, including Universal Credit or new style Jobseeker’s Allowance. The Government has announced an extra £7.4 billion of support through the welfare system this year.