Climate Goals: Wellbeing Economy

Helen Whately Excerpts

Tuesday 30th November 2021 Westminster Hall

[The Exchequer Secretary to the Treasury (Helen Whately)]

It is a pleasure to serve under your chairmanship, Mr Betts, and to answer the debate on behalf of the Government. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing a debate on an issue about which she cares deeply and speaks eloquently. I thank other hon. Members for their thoughtful contributions to what has been a good conversation in this Chamber.

I hope that it will not come as a surprise to hon. Members that this is a subject that the Government take seriously and that, as a Treasury Minister, I care about deeply. Much of what we are doing in fact aligns with a wellbeing economy approach. More than that, as a Government, we are clear that the wellbeing of our citizens and the natural environment is a priority as we work to deliver our world-leading climate goals.

Given the topic, this has been a wide-ranging debate. In answering it, I will talk first about how we are already thinking differently about wellbeing and the economy, and then about how we are acting differently, based on that new way of thinking. To be clear, the Government are already taking steps towards a broader understanding of progress and GDP growth. Rather than simply measuring our success in conventional economic terms, we are increasingly focusing on a range of measures, including reductions in carbon emissions, improvements in air quality and increases in skills, among other things.

As a Treasury Minister, however, it would be strange for me not to argue that a traditional economic metric such as GDP remains important and useful. I think that the shadow Minister, the right hon. Member for Wolverhampton South East (Mr McFadden), and I are probably in agreement on that. Nevertheless, GDP has its limitations. It should not be seen as an all-encompassing measure of welfare, which it was never designed to be, and nor is it an end in itself, as several hon. Members have said.

The Government fully supported the recommendations of Sir Charles Bean’s 2016 independent review of economic statistics, which acknowledged some of GDP’s limitations. We are committed to broadening the range of metrics that we use to measure welfare, including better accounting of human capital.

We provided the Office for National Statistics, for example, with an additional £25 million to improve UK economic statistics, including through the Beyond GDP initiative, which aims to develop new and broader measures of welfare and activity, such as a suite of personal wellbeing measures that better account for unpaid work, and estimates for human capital. I heard the hon. Member for Brighton, Pavilion say, “Don’t talk about the ONS”, but I assure her that ONS work on measuring natural capital is ongoing.

We have updated the rules that we use in the Treasury, as set out in the Green Book, to guide individual spending decisions. Those rules already take into account much more than the direct effects of GDP, including estimates of wider economic, social and environmental benefits. This year we introduced to the Green Book new guidance for considering wellbeing in detail as part of policy appraisal.

Several hon. Members have spoken about valuing nature and natural capital. The Government agree unambiguously with the central conclusion of the Dasgupta review that nature and the biodiversity that underpins it ultimately sustains economies, livelihoods and wellbeing. We also agree that only by accounting for the natural environment can we have a more complete view when balancing social, economic and environmental considerations in decision making. In other words, we know that natural capital matters and we are factoring it more and more into our thinking.

In response to the Dasgupta review, the Government are working to deliver a nature-positive economy so that we can be the first generation to leave the natural environment in a better state than we found it. Let us not underplay the significance of that. It is a genuine paradigm shift, and it is being put into action through the Environment Act 2021, including mandating biodiversity net gain for development to make sure that much needed development does not come at the expense of nature. That is why we have been working with the ONS to improve the way in which nature is incorporated in our national accounts, providing funding to explore improvement in its natural capital estimates to improve their relevance to policy making and through the consideration of a broader measure of economic activity than is currently captured by GDP. The recent spending review made investments to improve our understanding of the country’s natural capital with £140 million of funding to map the extent and condition of the country’s natural habitats.

Clearly a big part of our work in this area relates to efforts to tackle climate change by achieving net zero, which is part of my brief at the Treasury. The UK’s comprehensive legislative framework for tackling climate change, which revolves around setting carbon budgets, shows clearly how factors other than GDP sit centrally within our economic policy. That approach has been a success. Between 1990 and 2019, under Governments of different colours, the UK has reduced its greenhouse gas emissions by 44%, faster than any other country in the G20. Since March 2021, the Government have committed to invest £30 billion in our green industrial revolution. That spending, along with action on regulation and green finance initiatives, is about keeping the UK on track for our carbon budgets, establishing our long-term pathway towards net zero by 2050.

There has been widespread agreement in the Chamber about acting sooner rather than later on climate change, and specifically acting to prevent future climate change and investing to that end. I agree with the hon. Member for Stirling (Alyn Smith) that it is not a choice of either growth or the environment—it is not either/or but both. Our transition to net zero is a growth opportunity in itself. We expect to see hundreds of thousands of new jobs in the green economy. Not all growth includes consuming finite resources; doing things better can also boost GDP.

We also want new jobs to be well paid. That is absolutely part of our vision. We are aiming for a higher paid, higher skilled economy. I disagree with the hon. Member for Salford and Eccles (Rebecca Long Bailey) who said that growth means nothing to a struggling family. I disagree. Growth does matter. If we have a shrinking economy, a struggling family is less likely to have jobs, less likely to see their income go up, less likely to see improvements in their standard of living and less likely to have the opportunity to come out of poverty. Growth means more jobs. It means higher incomes. It means the opportunity for people’s wellbeing to improve.

As I said at the beginning of this debate, this is a wide-ranging issue, but I hope hon. Members will recognise that the Government are taking a comprehensive approach. I recognise that sometimes Ministers can fall into a trap in such debates by delivering a long list of policy actions, but I would say that our actions really do speak as loudly as any words. I know that the hon. Member for Brighton, Pavilion and other Members who have spoken today care deeply about the issues, but so do the Government.

On the specifics of the debate, our objective pure and simple is an approach that gives us the very best chance of meeting our climate goals in a way that maximises wellbeing for all—in fact, overall improving the wellbeing of the population of this country. We are thinking differently. We are acting differently. We are investing differently. We do indeed want to do that collaboratively, including by working closely with hon. Members across the House.

Money Laundering and Terrorist Financing (Amendment) (No. 3) (High-Risk Countries) Regulations 2021

Helen Whately Excerpts

Monday 22nd November 2021 General Committees

[The Chair]

I remind Members that they are expected to wear face masks, in line with Government guidance and that of the House of Commons Commission, and to give colleagues space for social distancing when leaving the room.

[The Exchequer Secretary to the Treasury (Helen Whately)]

I beg to move,

That the Committee has considered the Money Laundering and Terrorist Financing (Amendment) (No. 3) (High-Risk Countries) Regulations 2021 (S.I. 2021, No. 1218).

It is a pleasure to serve under your chairmanship, Ms Elliott.

This Government recognise the threat that economic crime poses to the UK, and we are committed to combating money laundering and terrorist financing. Illicit finance causes significant social and economic costs through its links to serious and organised crime. It is a threat to our national security and risks damaging our international reputation as a fair, open and rules-based economy. It also undermines the integrity and stability of our financial sector, and can reduce opportunities for legitimate business in the UK. That is why we are taking significant action to combat economic crime, from introducing the economic crime levy to progressing the Government’s landmark economic crime plan. We are also working closely with the private sector and our international partners to improve the investigation of economic crime, strengthen international standards on corporate transparency, and crack down on illicit financial flows.

The money laundering regulations support our overall efforts. As the UK’s core legislation framework for tackling money laundering and terrorist financing, they set out various measures that businesses must take to protect the UK from hostile actors. Under the regulations, businesses are required to conduct enhanced checks on business relationships and transactions with high-risk third countries. Those countries have strategic deficiencies in their anti-money laundering and counter-terrorism financing regimes and could pose a significant threat to the UK’s financial system.

The statutory instrument amends the money laundering regulations to update the UK’s list of high-risk third countries to mirror lists published by the Financial Action Task Force, the global standard setter for anti-money laundering and counter-terrorist financing. As the Financial Action Task Force carries out its periodic reviews and regularly updates its public lists of jurisdictions with strategic deficiencies, we also need to update our own. Updating our lists shows that we are responsive to the latest economic crime threats and ensures that the UK remains at the forefront of global standards on anti-money laundering and counter-terrorist financing.

The amendment will enable the money laundering regulations to continue to work as effectively as possible to protect the UK financial system. It is crucial to the protection of our national security and the UK’s international reputation, and will secure businesses and the financial system from money launderers and terrorist financers. I hope that colleagues will join me in supporting this legislation.

--- Later in debate ---

[Helen Whately]

I will briefly pick up on some of the points made by hon. Members and address their questions as much as I can. I appreciate the overall support for the regulations.

The top-line point is that the Government are committed to making the UK a hostile place for illicit finance and economic crime. The Financial Action Task Force found that the UK has one of the strongest systems in the world for combating money laundering. To that end, in our ongoing action against economic crime, we have committed new investments of £18 million in 2022-23 and £12 million per year in 2023-24 and 2024-25 for economic crime reforms, in addition to £63 million across the spending review period for Companies House reform and the introduction of the economic crime anti-money laundering levy, which will raise approximately £100 million a year from 2023-24 to tackle money laundering and fund economic crime initiatives. We are in the process of legislating for that in the Finance Bill.

The shadow Minister asked about overseas territories. The Government have worked closely with the Crown dependencies and overseas territories to combat the risk of money laundering. They share confidential information on company beneficial ownership and tax information with UK law enforcement bodies under the exchange of notes arrangements and have agreed to introduce publicly accessible registers of company beneficial ownership.

We have already set out plans to reform Companies House and strengthen the UK’s ability to combat economic crime. Those reforms are significant and will deliver, alongside broader reforms clamping down on the misuse of corporate entities, more reliable information on the companies register via verification of the identity of people who manage, control or set up companies; greater powers for Companies House to query and challenge the information submitted to it; and the removal of technological and legal barriers to allow enhanced cross-checks on corporate data with other public and private sector bodies. As I said, we have already committed an additional £63 million for Companies House reforms.

I emphasise that the register of overseas entities will be one of the first of its kind in the world, which is good news for the UK; it will enhance our already strong reputation as an honest and trusted place to do business. These measures have full Treasury support but are not Treasury-led. I encourage the right hon. Member for Wolverhampton South East to take up the specific timetable for the introduction of that legislation with the Department for Business, Energy and Industrial Strategy.

The high-risk third countries list will now include Jordan, Turkey and Mali, which were listed by the FATF in October 2021. Botswana and Mauritius will no longer be listed because both have completed their FATF action plans and addressed the deficiencies in their anti-money laundering and anti-terrorist financing regimes that had previously been highlighted. Afghanistan is not identified on any of the FATF’s public lists. However, the FATF published a statement expressing concern about the current and evolving money laundering and terrorist financing risk environment in the country. The FATF is closely monitoring the situation and has called on countries to facilitate information sharing with their private sectors on assessing and mitigating any emerging money laundering risks that are identified.

In the absence of any explicit country listing, the money laundering regulations require enhanced checks in all instances where there is a high risk of money laundering or terrorist financing. In implementing this requirement, the regulated sector must consider geographical risks, such as those that exist in Afghanistan, and take into account information from reliable sources, such as the FATF or domestic supervisory and regulatory bodies. UK supervisory bodies, including the Financial Conduct Authority and Her Majesty’s Revenue and Customs, recently issued alerts to highlight the increased risk in Afghanistan. Those alerts inform firms that they must appropriately monitor and assess transactions with Afghanistan to mitigate the risks of being exploited for money laundering or terrorist financing purposes. There are also various targeted financial sanction requirements in place in relation to Afghanistan.

It is the Government’s view that this measure will ensure that UK legislation remains up to date and continues to protect the financial system from the threat posed by jurisdictions with inadequate AML and CTF systems. The measure also keeps the UK in line with international standards on AML and CTF, allowing it to continue playing its full part in the fight against economic crime. I thank hon. Members for joining us for this afternoon’s Committee, and I commend the regulations to the Committee.

Finance (No. 2) Bill

Helen Whately Excerpts

2nd reading
Tuesday 16th November 2021 Commons Chamber

[The Exchequer Secretary to the Treasury (Helen Whately)]

It is a pleasure to close this debate on behalf of the Government. In a moment I will address many of the points raised in the debate, but I want to begin by reminding the House of the announcements made by the Chancellor in the Budget: more investment in infrastructure, innovation and skills; business rates cut by £7 billion, including the 50% business rates discount for the retail, hospital and leisure sectors; a cut in the universal credit taper; a £500 increase in work allowances; and an increase in the national living wage, rewarding people for their hard work. Those are announcements that the Finance Bill builds upon.

Let me remind the House what the Bill is designed to achieve. First, it will deliver a stronger economy for the British people by encouraging businesses to invest in the UK’s future growth and prosperity. Secondly, it will help to deliver stronger public finances. Thirdly, it will improve our ability to tackle economic crime, tax avoidance and tax evasion. Finally, it will contribute to a simpler and more sustainable tax system, in turn supporting businesses and consumers.

A stronger economy and a strong, dynamic business environment go hand in hand. As a Government, we will always do everything that we reasonably can to encourage business investment. The previous Finance Bill delivered the super deduction, the biggest business tax cut in modern British history, and extended the annual investment allowance, to the end of this year, at its higher level of £1 million. Now is not the time to remove tax breaks on investment. That is why the Bill extends the £1 million level again until the end of March 2023, encouraging businesses to bring forward investment—because this is a Government who back business. It is also why the Bill will make our creative tax reliefs more generous by extending the relief for museums and galleries for another two years and doubling the reliefs for theatres, orchestras, museums and galleries until April 2023.

A number of Opposition Members spoke about the taxation of banks. I should like to put everyone straight on that. As the Bill explains, the surcharge will be set at 3% from 2023, which means that the combined tax rate on banks’ profits will increase—I emphasise that: the tax rate will increase—from 27% to 28%. [Interruption.] There seems to be some problem with doing maths. Opposition Members are shouting at me, but it is a simple fact: the rate will go up from 27% to 28%. Banks will be paying more tax. It may be convenient for Opposition Members to suggest something different—they like the rhetoric—but it is simply not true.

[Richard Thomson]

Will the Minister give way?

[Helen Whately]

I should be delighted to give way to the hon. Member.

[Richard Thomson]

As the Minister is so good at maths, can she tell us what the tax rate would be if the surcharge was not being reduced?

[Helen Whately]

The answer to that question is 33%, but the fact is that the rate is going up, from 27% to 28%. That is an increase in tax; it really is quite simple maths.

While supporting investment and competitiveness in our key industries, we must also continue to fund our crucial public services and strengthen our public finances. To keep this Government on the path of discipline and responsibility, the new charter for budget responsibility sets out two key fiscal rules. First, underlying public sector net debt, excluding the impact of the Bank of England, must, as a percentage of GDP, be falling. Secondly, in normal times the state should only borrow to invest.

That is the context for the introduction of the health and social care levy, which we have already voted on, and the 1.25% increase to tax rates on dividend income, delivered through this Bill. This funding is to provide a new long-term funding stream for health and social care, raising more than £12 billion a year over the spending review period, of which £5 billion is earmarked for social care—that picks up on the question from the hon. Member for Gordon (Richard Thomson). I would be delighted to tell him more about the plans involved in that, but I would be digressing too much from the context of the Bill and that is probably one for another occasion. However, what I will say to Opposition Members who want to scrap that extra funding is that they have no other plan to finance getting down the NHS backlog or social care reform, other than through borrowing—they would pass the cost on to future generations. The Government are taking a responsible, fair and progressive way to raise revenue. Additional and higher-rate taxpayers are expected to contribute more than three quarters of the revenue from this increase in 2022-23. Those with the broadest shoulders will pay more.

A number of hon. Members asked about the funding of net zero. Taking a step back for a moment, let me say that the net zero strategy sets out our path to net zero by 2050. Overall, we have earmarked £30 billion-worth of investment in net zero, but that is a long-term investment. Net zero funding in this spending review and Budget specifically includes £1.3 billion of energy innovation funding, £1.4 billion of public sector decarbonisation funding, £1.8 billion to help low-income households to transition to net zero, £620 million extra for the transition to electric vehicles and up to £1.7 billion for large-scale nuclear energy. So, as hon. Members can see, there is funding for net zero in the spending review and Budget. In addition, the revised Green Book means that all policy objectives need to align with net zero.

Let me turn to measures in the Bill that tackle economic crime, and tax avoidance and evasion. The Government are committed to making the UK a hostile place for illicit finance and economic crime, helping to protect our security and prosperity. In recent years, we have taken a series of steps to combat economic crime, including the creation of a new National Economic Crime Centre to co-ordinate the law enforcement response, as well as passing the Criminal Finances Act 2017, which introduced new powers for enforcement authorities to investigate cash believed to be derived from criminal proceeds. The Bill builds on those steps by introducing the new economic crime levy, which will help fund further action on money laundering, including the ambitious reforms that the Government announced in the 2019 economic crime plan, and help safeguard the UK’s global reputation as a safe and transparent place to conduct business. It is a proportionate measure, which will be paid by entities that are regulated for anti-money laundering purposes.

We are also taking action through the Bill to clamp down on promoters of tax avoidance schemes. In response to the question from the hon. Member for Brentford and Isleworth (Ruth Cadbury), we are giving HMRC new powers: to freeze and secure a promoter’s assets; to introduce a new penalty on UK entities who support offshore promoters; to petition the courts to close down companies or partnerships that promote avoidance schemes; and to share more information on promoters to support taxpayers to steer clear of such schemes.

[James Murray]

Will the Minister explain when the register of overseas entities owning UK property will be in place?

[Helen Whately]

I am happy to write to the hon. Member on that question.

Finally, I turn to the administration of the tax system. Only last year, the Government published a 10-year tax strategy that seeks to improve the tax system and its support for taxpayers. The House will recall that the Chancellor was clear in his Budget speech that we must deliver a simpler, fairer tax system that supports consumers and is also competitive for business, and we have, for example, the most radical simplification of alcohol duties for more than 140 years. As part of that, community pubs can look forward to a new and simpler system of alcohol duties, including draught relief, which will cut duty on beer and cider served in pubs by 5%, as celebrated in the contribution of my hon. Friend the Member for Broadland (Jerome Mayhew). Alcohol duties will also be reformed around the simple, common-sense principle that the stronger the drink, the higher the rate. That will be legislated for next year after a detailed consultation.

In the meantime, the Bill does more to build a simpler and more sustainable tax system. Basis period reform, for example, will remove the existing highly complex requirements around basis period rules, including double taxation of early years of trading. Anyone who, like me, has studied accountancy will appreciate that.

As my right hon. and learned Friend the Financial Secretary said at the beginning of the debate, the Bill comes before us when we are seeing significant improvements in the economic situation. The Government are rightly focused on economic recovery, and let there be no doubt that our plan is working. A year ago, the country was experiencing the deepest recession on record, but thanks to our plan for jobs, which the Office for Budget Responsibility has called “remarkably successful”, we are recovering fast. The OBR expects the economy to return to pre-pandemic levels at the turn of the year, several months earlier than it thought in March. We do still have historically high levels of debt, but new fiscal rules together with measures in the Bill will ensure that the public finances remain on a sustainable path.

It is a Bill that encourages business investment, delivers stronger public finances, tackles tax avoidance and evasion, contributes to a simpler and more sustainable tax system and fundamentally delivers a stronger economy for the British people. For those reasons and more, I commend it to the House.

Question put, That the amendment be made.

Oral Answers to Questions

Helen Whately Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

2. What recent fiscal steps he has taken to help resolve supply chain issues.

[The Exchequer Secretary to the Treasury (Helen Whately)]

Current stresses on supply chains are a consequence of global factors; as economies around the world recover, demand is outstripping supply. Where it makes sense, we are taking action to support UK supply chains, such as increasing the supply of lorry drivers to help the haulage sector meet demand for deliveries.

[Nick Smith]

Last week’s National Audit Office report on supply chain finance highlighted that huge contracts involving Greensill Capital, signed off by the Treasury, provided no benefits to the NHS. Does the Minister accept the NAO report, and will she ensure that in the future, contracts are properly awarded to avoid this kind of insidious lobbying?

[Helen Whately]

I am sure that the Government will be responding to the NAO report in due course, but I can assure the hon. Member that the Treasury works very hard with the Department of Health and Social Care to make sure that funding for the NHS, which we are increasing substantially, goes to good use and improves care for patients.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Mr Speaker,

“energy price rises…increased evidence of supply bottlenecks …shortages in key occupations”.

Those are not my words but those of the Office for Budget Responsibility, which has issued a clear warning that the Government’s supply chain chaos will weigh on the recovery beyond its current forecast. Can the Minister help businesses and families prepare by explaining how much this chaos will cost the country this year?

[Helen Whately]

I thank the hon. Member for her question. I do not agree with the picture that she paints. As I said earlier, there are global factors affecting challenges to the supply chain. We are providing support where it is appropriate. Specifically on energy costs, customers are already supported by the energy price cap, and we are providing £500 million extra help to households that need it during this winter.

[Bridget Phillipson]

The run-up to the festive period is a busy and crucial time for many businesses. They simply cannot afford delays in getting goods to warehouses from our ports, yet that is exactly what the logistics industry is warning that the shortage of heavy goods vehicle drivers is causing. Can the Minister guarantee that no presents will be missing from under the tree this Christmas because of her Government’s complete failure to plan ahead?

[Helen Whately]

We are indeed taking steps to support the haulage sector, where there is a long-running situation with vacancies for HGV drivers. The action we have taken includes making available 5,000 temporary visas for the short term, increasing the number of tests available so that there is greater capacity for new drivers to take tests, changing cabotage restrictions, and funding improved facilities for drivers. In the longer term, we need to see both better pay and better conditions for lorry drivers.

[Liz Twist (Blaydon) (Lab)]

3. What recent steps he has taken to help reduce economic inequality.

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[Christian Wakeford (Bury South) (Con)]

20. What progress his Department has made in levelling up all regions of the UK.

[The Exchequer Secretary to the Treasury (Helen Whately)]

Levelling up is this Government’s defining mission; it is a golden thread running through this Budget and spending review. We are creating the right conditions for businesses to grow and giving people the right skills to succeed. We believe that the place where someone grows up should never limit their prospects.

[John Lamont]

This Government are rightly committed to levelling up all parts of the United Kingdom, including Scotland. Improving transport links by extending the Borders railway in my constituency from Tweedbank to Hawick, Newcastleton and on to Carlisle would be a very good way of improving the economic opportunities for people living in those communities. Will the Minister confirm that the UK Government support the extension of the Borders railway as part of the levelling-up agenda?

[Helen Whately]

I commend my hon. Friend for his forthright campaign for the extension of the Borders railway. I reassure him that the Department for Transport and Transport Scotland are discussing the options to extend the railway, and, as I think he knows, the £350 million Borderlands inclusive growth deal includes up to £5 million to assess feasibility.

[Henry Smith]

My constituency contains Gatwick airport and, by many measures, has been one of the most negatively affected by the covid-19 pandemic. Will my hon. Friend say how levelling up will support my constituents to recover from the pandemic?

[Helen Whately]

I know my hon. Friend’s Crawley constituency well and I recognise the importance of aviation to livelihoods there. I am sure that he will welcome the extension of the airport and ground operations support scheme that the Chancellor announced to help airports such as Gatwick to recover from covid. We have also provided £180 million in covid loan schemes to support businesses in Crawley and, as he knows, Crawley has already received £21 million through the towns fund.

[Christian Wakeford]

First, may I put on record my thanks to the Chancellor for announcing that Radcliffe will receive £20 million from the levelling-up fund to regenerate the town centre, with new leisure facilities and a space for adult learning and new business? Following that extra funding and the previously announced new high school for Radcliffe, does the Minister agree that the Government are committed to creating new opportunities for young people so that they have the best chance to get on in life and fulfil their potential?

[Helen Whately]

I congratulate my hon. Friend, because his constituency is indeed receiving £20 million from the levelling-up fund to deliver a new civic hub in Radcliffe, which will improve access to adult education while freeing up vital space for a new secondary school. As I am sure he saw in the Budget and spending review last week, we are fully committed to providing people with the skills that they need to succeed in life.

[Richard Burgon (Leeds East) (Lab)]

My constituency is officially one of the most economically deprived constituencies in the country. If the rhetoric of levelling up is going to be a reality, the bid from Leeds City Council to upgrade and redevelop Fearnville sports centre to turn it into Fearnville wellbeing centre is exactly the kind of bid that should be agreed. Local people were therefore shocked when, the day after the Budget, the leader of Leeds City Council received a letter from the Government turning down the bid. The Chancellor is sitting on the Front Bench; will he step forward now and agree to meet me, the leader of Leeds City Council, James Lewis, and a delegation of local residents with a view to approving the council’s bid for the upgrade of Fearnville sports centre?

[Helen Whately]

I thank the hon. Member for his question, which gives me the opportunity to remind him that his area is receiving hundreds of millions of pounds of investment in transport infrastructure. We look forward to receiving further bids for future rounds of the levelling-up fund, for instance. We are delighted to invest in constituencies such as his.

[Alison McGovern (Wirral South) (Lab)]

The Exchequer Secretary says that levelling up is the defining mission of this Government, yet if we look at the spending review priority outcomes and metrics, we can see that across the Department for Business, Energy and Industrial Strategy, the Department for Levelling Up, Housing and Communities and the Treasury, there is just one metric on which to judge the Government:

“Economic performance of all functional economic areas relative to their trend growth rates”.

That is all that they are being measured on, so will she be specific? By how much does she expect to close the economic gap by the end of this Parliament?

[Helen Whately]

I thank the hon. Member for her interest in our objective to level up across the whole United Kingdom. As she repeated, it is the defining mission of this Government; as she can see, it is the golden thread running through the spending review and the Budget, with steps taken and investment made across Government to support levelling up across all our constituencies.

[Dan Jarvis (Barnsley Central) (Lab)]

The English metro Mayors submitted levelling-up fund bids—I declare an interest—but only one was successful. The South Yorkshire bid was well crafted and focused on improvements to our bus services that would have supported the levelling up and net zero agendas. Will the bids be looked at again as part of a second round?

[Helen Whately]

South Yorkshire will receive a share of the £5.7 billion for transport for the region. Overall, as the hon. Member will know and as he will have heard when he attended our debate yesterday afternoon, support for levelling up and investment have been received by constituencies all around the country and represented by hon. Members across the House. There will be further rounds for levelling-up funds to put in for.

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[The Exchequer Secretary to the Treasury (Helen Whately)]

I congratulate my hon. Friend and fellow Members representing Stoke-on-Trent on the £56 million their city was awarded in the first round of the levelling-up fund, winning not one but three bids to fund regeneration projects across the city, delivering new homes, community facilities, and office and hospitality space. She makes an important point about funding grassroots community capacity. I assure her that the UK shared prosperity fund, which is worth over £2.6 billion, will allocate funding across the UK. Further details of the fund will be set out later this year.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

The women-run Acton firm Fashionizer, which makes uniforms for hotels, diversified into mask manufacturing during the pandemic. The firm is now getting back on its feet, but the order book is just a third of what it was, so those working there ask the Chancellor if he could please extend the rate relief for the hospitality industry to those who supply hospitality, including food and laundry services, some of them exclusively. They have given me a few of their masks for you, Mr Speaker, for the Chancellor and for anyone who wants one. I think a few of the hon. Members on the back row of the Conservative Benches could do with them.

[Christian Wakeford (Bury South) (Con)]

T9. I commend the Chancellor for his announcement in the Budget introducing a simplified system of duty that taxes alcoholic drinks according to their strength. Although this change will not come into force until 2023, it represents a welcome improvement, geared toward promoting public health. Does he agree that the proposed changes to our alcohol duty system will encourage manufacturers to innovate and promote lower strength drinks, which will help to reduce health harm associated with alcohol? Will he meet me to discuss alcohol harm?

[Helen Whately]

I sincerely agree with my hon. Friend and thank him for his support. We are overhauling the UK’s outdated alcohol duty rules—the biggest simplification for 140 years—and taking a common-sense approach. Drinks will be taxed in accordance with their strength, encouraging responsible drinking, tackling the problems caused by cheap high-strength drinks, and supporting our pubs and our hospitality sector.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

The Chancellor promised the aviation sector a bespoke support package before breaking his word. Instead these businesses will have to make use of other support schemes, including time to pay. What does he say to those businesses now hit by tens or hundreds of thousands of pounds in interest charges by HMRC when the sector is quite clearly still very badly affected by the pandemic?

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[Mrs Flick Drummond (Meon Valley) (Con)]

My pubs and brewers are pleased with the reduction in beer duty, but may we have clarification on keg size, as my small brewers ship their beer in different sizes, including 20-litre pins? May we also have an indication of when the changes to the small brewers relief will be announced, ideally removing the 2,000-hectolitre limit and the cliff-edge at the 5,000-hectolitre limit?

[Helen Whately]

We are delighted that we are introducing the draft relief to support the on trade for people purchasing drinks in pubs and hospitality venues. We will consult on the details, including keg size. We will also bring forward the technical changes to small brewers relief, which my hon. Friend asks about.

[Rachael Maskell (York Central) (Lab/Co-op)]

The pretence has to stop. The Budget was climate-illiterate, with just £7.8 billion of new money given to climate and nature mitigation to reach the 2024 target, when £62.9 billion is required. How will the Chancellor close that gap, or is the Prime Minister’s performance at COP26 simply a façade?