Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of the increase in inflation to 3.2 per cent on living standards.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
CPI inflation in August was 3.2% having risen from low levels last year. The Bank of England expects the increase in inflation to be temporary, with inflation returning to its 2% target level through 2022 and 2023.
Since the operationally independent Bank of England took on responsibility for inflation, it has averaged around the 2% target. The Government remains committed to price stability.
We understand that higher prices increase the costs of living, and that is why this Government has taken direct action to help people manage the cost of living by increasing the National Living Wage, taken action on the cost of fuel and energy bills and increasing the Local Housing Allowance.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of the current financial status of the Chinese property group Evergrande on (a) the world economy and (b) the United Kingdom economy.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that Evergrande’s financial situation, given the size of its outstanding debt, raises a number of global and domestic concerns. That is why we, alongside the UK’s independent financial authorities – the FCA, PRA and Bank of England are closely monitoring the situation.
Since 2008 there has been a concerted international effort to strengthen the global financial system. In the UK, banks now hold over three times more capital than they did at the time of the financial crisis. The Bank of England’s Financial Policy Committee judges that the UK banking sector is resilient to a wide range of economic scenarios, including a contraction in both China and Hong Kong's economic activity. This judgement of the UK banking sector is supported by the interim results of the 2021 solvency stress test.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of receipt of (a) Coronavirus Job Retention Scheme furlough payments and (b) Bounce Back Loan Scheme payments on the recipients' credit ratings.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The CJRS supports businesses to preserve employer-employee matches by providing a mechanism to pay the wages of furloughed employees. Through easing the financial burden, the CJRS supports jobs, reduces the risk of permanent business closures and reduces the risk of large losses in incomes, through wage support to furloughed employees.
By maintaining employer-employee matches, the CJRS therefore seeks to reduce the risk of long-term labour market scarring. As of 14 June 2021, there have been 11.6 million unique jobs supported by the CJRS since its inception. A total of 1.3 million employers have made a claim through the CJRS since it started in March 2020, totalling £65.9 billion in claims.
The Government launched the Bounce Back Loan Scheme (BBLS) on 4 May 2020 to ensure that the smallest businesses could access loans of up to £50,000, capped at 25% of businesses’ turnover in a matter of just days.
It is important to note that businesses are responsible for repaying any facility they take out and failure to keep up with their repayments may impact a borrower’s credit rating.
In order to give businesses further support and flexibility in making their BBLS repayments, the Chancellor has announced “Pay as You Grow” (PAYG) options. PAYG will give businesses the option to repay their BBLS facility over ten years, the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months.
Please be reassured, borrowers who make use of these PAYG options will not be penalised through their credit rating for doing so.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he is taking to ensure that umbrella companies do not unlawfully deduct employers' taxes from contractors' pay.
Answered by Jesse Norman
Like all employers, umbrella companies are responsible for paying employer National Insurance Contributions (NICs) where they are due. Employers cannot, by law, deduct employer NICs from an employee's gross pay. The payment of employer NICs out of the umbrella company’s fee may be shown on the same payslip as deductions, such as Income Tax, from the employee’s gross pay, meaning that it can look as if an individual is paying the employer NICs, when this is not actually the case.
The Government improved transparency for agency workers by introducing the Key Information Document from 6 April 2020. This sets out a range of pay-related facts, including the minimum rate of pay an agency worker can expect, who pays them, how often they are paid, and if there are any deductions or fees taken from their pay. Any differences between the rate of pay given to the umbrella company by the employment business and the sum given to the agency worker (after fees and deductions) must be accounted for and explained.
When set up and operated correctly, umbrella companies comply with tax and NICs legislation. Umbrella company employees who believe that an umbrella company is not complying with its tax or NICs obligations can report it to HM Revenue and Customs: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/report-fraud-to-hmrc.
Commercial and loyalty incentive schemes may be a legitimate business-to-business interaction, between an agency and umbrella company, and they are not within the scope of the agency regulations enforced by the Employment Agency Standards (EAS) Inspectorate.
Protecting and enhancing workers’ rights through robust regulation, including for those employed by umbrella companies is a priority for the Government. The Government’s plans for a new single enforcement body will include umbrella companies in its remit, and will have new powers to tackle non-compliance.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to prohibit the practice of recruitment agencies asking for incentives to recommend contractors to an umbrella company.
Answered by Jesse Norman
Like all employers, umbrella companies are responsible for paying employer National Insurance Contributions (NICs) where they are due. Employers cannot, by law, deduct employer NICs from an employee's gross pay. The payment of employer NICs out of the umbrella company’s fee may be shown on the same payslip as deductions, such as Income Tax, from the employee’s gross pay, meaning that it can look as if an individual is paying the employer NICs, when this is not actually the case.
The Government improved transparency for agency workers by introducing the Key Information Document from 6 April 2020. This sets out a range of pay-related facts, including the minimum rate of pay an agency worker can expect, who pays them, how often they are paid, and if there are any deductions or fees taken from their pay. Any differences between the rate of pay given to the umbrella company by the employment business and the sum given to the agency worker (after fees and deductions) must be accounted for and explained.
When set up and operated correctly, umbrella companies comply with tax and NICs legislation. Umbrella company employees who believe that an umbrella company is not complying with its tax or NICs obligations can report it to HM Revenue and Customs: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/report-fraud-to-hmrc.
Commercial and loyalty incentive schemes may be a legitimate business-to-business interaction, between an agency and umbrella company, and they are not within the scope of the agency regulations enforced by the Employment Agency Standards (EAS) Inspectorate.
Protecting and enhancing workers’ rights through robust regulation, including for those employed by umbrella companies is a priority for the Government. The Government’s plans for a new single enforcement body will include umbrella companies in its remit, and will have new powers to tackle non-compliance.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will take steps to ensure that HMRC does not enforce payment of the Charge or settlement sums by people facing bankruptcy as a result of the Loan Charge.
Answered by Jesse Norman
There are many reasons why someone might be facing bankruptcy, including as a result of a non-HMRC debt. Some individuals may choose to enter insolvency themselves based on their overall financial position. HMRC are therefore unable to determine if an individual is facing bankruptcy as a result of the Loan Charge specifically. However, HMRC only ever consider enforcement action as a last resort and will always attempt to engage in discussion with a taxpayer regarding payment, and where appropriate, agree a manageable payment arrangement based on individual circumstances. In addition, HMRC will only ever consider pursuing bankruptcy as a last resort, for example where the taxpayer is refusing to pay but has the ability to do so.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate he has made of the number of people who will declare bankruptcy as a result of the Loan Charge in 2021.
Answered by Jesse Norman
I refer the Honourable Member to the answer given on 23 June 2021 to UIN 16066.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions officials of his Department have had with the representatives of the Scottish Government on the distribution of the Investment Reserve arising from the Mineworkers’ Pension Scheme.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
Responsibility for policy and engagement relating to the Mineworkers’ Pension Scheme rests with the Department for Business, Energy and Industrial Strategy and therefore there have been no meetings by HM Treasury officials on this matter.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to not freeze the threshold for payment of the basic rate of income tax in the financial year 2021-22 to avoid penalising low earners.
Answered by Jesse Norman
As confirmed at Budget, the Government will fulfil its promise to increase the income tax Personal Allowance to £12,570 in financial year 2021-22.
The Government has almost doubled the Personal Allowance since 2010 and it is now the highest basic personal tax allowance of all countries in the G20.
The decision to maintain the Personal Allowance at this higher level will not come into effect until April 2022, when the economy will be on a stronger footing.
Asked by: Owen Thompson (Scottish National Party - Midlothian)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what consultation will be undertaken with (a) the Scottish Government and (b) local Members of the Scottish Parliament when considering applications to the Levelling Up Fund.
Answered by Kemi Badenoch - President of the Board of Trade
We look forward to engaging the Devolved Administrations on the Levelling Up Fund. MHCLG and DfT will seek advice, where appropriate, from the relevant Devolved Administrations at the shortlisting stage on projects that will be delivered in their geographical areas – including on deliverability and alignment with existing provision. Further details on the Levelling Up Fund application process are set out in the prospectus.