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Category: Economy

  • Rishi Sunak – 2020 Statement on the Comprehensive Spending Review

    Rishi Sunak – 2020 Statement on the Comprehensive Spending Review

    The statement made by Rishi Sunak, the Chancellor of the Exchequer, in the House of Commons on 25 November 2020.

    Mr Speaker, today’s spending review delivers on the priorities of the British people. Our health emergency is not yet over and our economic emergency has only just begun, so our immediate priority is to protect people’s lives and livelihoods. But today’s spending review also delivers stronger public services, paying for new hospitals, better schools and safer streets, and it delivers a once-in-a-generation investment in infrastructure, creating jobs, growing the economy and increasing pride in the places we call home.

    Our immediate priority is to protect people’s lives and livelihoods, so let me begin by updating the House on our response to coronavirus. We are prioritising jobs, businesses and public services through the furlough scheme, support for the self-employed, loans, grants, tax cuts and deferrals, as well as extra funding for schools, councils, the NHS, charities, culture and sport. Today’s figures confirm that, taken together, we are providing £280 billion to get our country through coronavirus. Next year, to fund our programmes on testing, personal protective equipment and vaccines, we are allocating an initial £18 billion. To protect the public services most affected by coronavirus, we are also providing: £3 billion to support NHS recovery, allowing it to carry out up to a million checks, scans and operations; over £2 billion to keep our transport arteries open, subsidising our rail network; more than £3 billion to local councils; and an extra £250 million to help end rough sleeping. Although much of our coronavirus response is UK-wide, the Government are also providing £2.6 billion to support the devolved Administrations in Scotland, Wales and Northern Ireland. Taken together, next year, public services funding to tackle coronavirus will total £55 billion.

    Let me turn to the Office for Budget Responsibility’s economic forecasts. I thank the new chair, Richard Hughes, and his whole team for their work. The OBR forecasts that the economy will contract this year by 11.3%, the largest fall in output for more than 300 years. As the restrictions are eased, it expects the economy to start recovering and growing by 5.5% next year, 6.6% in 2022 and then 2.3%, 1.7% and 1.8% in the following years. Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022. The economic damage is likely to be lasting. Long-term scarring means in 2025, the economy will be around 3% smaller than expected in the March Budget.

    The economic impact of coronavirus and the action we have taken in response means that there has been a significant but necessary increase in our borrowing and debt.

    The UK is forecast to borrow a total of £394 billion this year, equivalent to 19% of GDP—the highest recorded level of borrowing in our peacetime history. Borrowing falls to £164 billion next year and to £105 billion in ’22-’23, then remains at around £100 billion, or 4% of GDP, for the remainder of the forecast. Underlying debt, after removing the temporary effect of the Bank of England’s asset purchases, is forecast to be 91.9% of GDP this year. Due to elevated borrowing levels and a forecast persistent current deficit, underlying debt is forecast to continue rising in every year, reaching 97.5% of GDP in ’25-’26.

    High as these costs are, the costs of inaction would have been far higher. But this situation is clearly unsustainable over the medium term. We could only act in the way we have because we came into this crisis with strong public finances. We have a responsibility, once the economy recovers, to return to a sustainable fiscal position.

    This is an economic emergency. That is why we have taken, and continue to take, extraordinary measures to protect people’s jobs and incomes. It is clear that those measures are making a difference. The OBR now states, as the Bank of England and the International Monetary Fund already have, that our economic response has protected jobs, supported incomes and helped businesses to stay afloat. It has said today that business insolvencies have fallen compared with last year, and the latest data shows the UK’s unemployment rate is lower than that of Italy, France, Spain, Canada and the United States.

    We are doing more to build on our plan for jobs. I am announcing today nearly £3 billion for my right hon. Friend the Secretary of State for Work and Pensions to deliver a new three-year restart programme to help over a million people who have been unemployed for over a year to find new work. But I have always said: we cannot protect every job. Despite the extraordinary support we have provided, the OBR expects unemployment to rise to a peak, in the second quarter of next year, of 7.5%—2.6 million people. Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024.

    Today’s statistics remind us of something else. Coronavirus has deepened the disparity between public and private sector wages. In the six months to September, private sector wages fell by nearly 1% compared with last year. Over the same period, public sector wages rose by nearly 4%. Unlike workers in the private sector, who have lost jobs, been furloughed, and seen wages cut and hours reduced, the public sector has not. In such a difficult context for the private sector, especially for those people working in sectors such as retail, hospitality and leisure, I cannot justify a significant across-the-board pay increase for all public sector workers.

    Instead, we are targeting our resources at those who need it most. To protect public sector jobs at this time of crisis, and to ensure fairness between the public and private sectors, I am taking three steps today. First, taking account of the pay review bodies’ advice, we will provide a pay rise to over a million nurses, doctors and others working in the NHS. Secondly, to protect jobs, pay rises in the rest of the public sector will be paused next year. But, thirdly, we will protect those on lower incomes; the 2.1 million public sector workers who earn below the median wage of £24,000 will be guaranteed a pay rise of at least £250. What this means is that while the Government are making the difficult decision to control public sector pay, the majority of public sector workers will see their pay increase next year.

    And we want to do more for the lowest paid. We are accepting in full the recommendations of the Low Pay Commission to increase the national living wage by 2.2% to £8.91 an hour; to extend this rate to those aged 23 and over; and to increase the national minimum wage rates as well. Taken together, these minimum wage increases will likely benefit around 2 million people. A full-time worker on the national living wage will see their annual earnings increase by £345 next year—compared with the position in 2016, when the policy was first introduced, that is a pay rise of over £4,000.

    These are difficult and uncertain economic times, so it is right that our immediate priority is to protect people’s health and their jobs, but we need to look beyond. Today’s spending review delivers stronger public services—our second priority. Before I turn to the details, let me thank the whole Treasury team, and especially my right hon. the Chief Secretary, for their dedication and hard work in preparing today’s spending review. Next year, total departmental spending will be £540 billion. Over this year and next, day-to-day departmental spending will rise, in real terms, by 3.8%—that is the fastest growth rate in 15 years. In cash terms, day-to-day departmental budgets will increase next year by £14.8 billion.

    And this is a spending review for the whole United Kingdom. Through the Barnett formula, today’s decisions increase Scottish Government funding by £2.4 billion, Welsh Government funding by £1.3 billion and Northern Ireland Executive funding by £0.9 billion. The whole of the United Kingdom will benefit from the UK shared prosperity fund, and over time we will ramp up funding so that total domestic UK-wide funding will at least match EU receipts, on average, reaching around £1.5 billion a year. To help local areas prepare for the introduction of the UKSPF, next year we will provide funding for communities to pilot programmes and new approaches. And we will accelerate four city and growth deals in Scotland, helping Tay Cities, Borderlands, Moray and the Scottish islands create jobs and prosperity in their areas.

    Our public spending plans deliver on the priorities of the British people. Today’s spending review honours our historic, multi-year commitment to the NHS. Next year, the core health budget will grow by £6.6 billion, allowing us to deliver 50,000 more nurses and 50 million more general practice appointments. We are increasing capital investment by £2.3 billion: to invest in new technologies; to improve the patient and staff experience; to replace ageing diagnostic machines such as MRI and CT scanners; and to fund the biggest hospital building programme in a generation, building 40 new hospitals and upgrading 70 more. We are investing in social care, too. Today’s settlement allows local authorities to increase their core spending power by 4.5%. Local authorities will have extra flexibility on council tax and the adult social care precept, which, together with £300 million of new grant funding, gives them access to an extra £1 billion to fund social care—and this is on top of the extra £1 billion social care grant we provided this year, which I can confirm will be maintained.

    To provide a better education for our children, we are also getting on with our three-year investment plan for schools. We will increase the schools budget next year by £2.2 billion, so we are well on the way to delivering our commitment of an extra £7.1 billion by 2022-23.

    Every pupil in the country will see a year-on-year funding increase of at least 2%, and we are funding the Prime Minister’s commitment to rebuild 500 schools over the next decade. We are also committed to boosting skills, with £291 million to pay for more young people to go into further education, £1.5 billion to rebuild colleges, £375 million to deliver the Prime Minister’s lifetime skills guarantee and extend traineeships, sector-based work academies and the National Careers Service, as well as improving the way the apprenticeships system works for businesses.

    We are also making our streets safer. Next year, funding for the criminal justice system will increase by over £1 billion. We are providing more than £400 million to recruit 6,000 new police officers—well on track to recruit 20,000—and £4 billion over four years to provide 18,000 new prison places. New hospitals, better schools, safer streets—the British people’s priorities are this Government’s priorities.

    Today’s spending review strengthens the United Kingdom’s place in the world. This country has always been and will always be open and outward-looking, leading in solving the world’s toughest problems. But during a domestic fiscal emergency, when we need to prioritise our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people, especially when we are seeing the highest peacetime levels of borrowing on record. I have listened with great respect to those who have argued passionately to retain this target, but at a time of unprecedented crisis, Government must make tough choices. I want to reassure the House that we will continue to protect the world’s poorest, spending the equivalent of 0.5% of our national income on overseas aid in 2021, allocating £10 billion at this spending review. Our intention is to return to 0.7% when the fiscal situation allows. Based on the latest OECD data, the UK would remain the second highest aid donor in the G7—higher than France, Italy, Japan, Canada and the United States. And 0.5% is also considerably more than the 29 countries on the OECD’s Development Assistance Committee, which average just 0.38%.

    Overseas aid is, of course, only one of the ways we play our role in the world. The Prime Minister has announced over £24 billion of investment in defence over the next four years—the biggest sustained increase in 30 years—allowing us to provide security not just for our country, but around the world. We are investing more in our extensive diplomatic network, already one of the largest in the world, and providing more funding for new trade deals. We should, however, judge our standing in the world not just by the money we spend, but by the causes we advance and the values we defend.

    If this spending review’s first priority was getting the country through coronavirus and its second was stronger public services, then our final priority is to deliver our record investment plans in infrastructure. Capital spending next year will total £100 billion— £27 billion more in real terms than last year. Our plans deliver the highest sustained level of public investment in more than 40 years—once-in-a-generation plans to deliver once-in-a-generation returns for our country.

    To build housing, we are introducing a £7.1 billion national home building fund, on top of our £12.2 billion affordable homes programme. We will deliver faster broadband for over 5 million premises across the UK, better mobile connectivity with 4G coverage across 95% of the country by 2025, the biggest ever investment in new roads, upgraded railways, new cycle lanes and over 800 zero-emission buses. Our capital plans will invest in the greener future we promised, delivering the Prime Minister’s 10-point plan for climate change. We are making this country a scientific superpower, with almost £15 billion of funding for research and development, and we are publishing today a comprehensive new national infrastructure strategy. To help finance our plans, I can also announce that we will establish a new UK infrastructure bank. Headquartered in the north of England, the bank will work with the private sector to finance major new investment projects across the United Kingdom, starting this spring.

    I have one further announcement to make. For many people, the most powerful barometer of economic success is the change they see and the pride they feel in the places we call home. People want to be able to look around their towns and villages, and say, “Yes, our community—this place—is better off than it was five years ago.” For too long our funding approach has been complex and ineffective, and I want to change that. Today I am announcing a new levelling-up fund worth £4 billion. Any local area will be able to bid directly to fund local projects.

    The fund will be managed jointly between the Treasury, the Department for Transport and the Ministry for Housing, Communities and Local Government, taking a new, holistic, place-based approach to the needs of local areas. Projects must have real impact, they must be delivered within this Parliament and they must command local support, including from their Member of Parliament. This is about funding the infrastructure of everyday life: a new bypass; upgraded railway stations; less traffic; more libraries, museums and galleries; better high streets and town centres. This Government are funding the things that people want and places need.

    Today I have announced huge investment in jobs, public services and infrastructure, yet I cannot deny that numbers alone can ring hollow. They stand testament to our commitment to create a better nation, but on their own they are not enough to create one. When asked what our vision for the future of this country is, we cannot point to a shopping list of announcements and feel that the job is done. So as we invest billions in research and development, we are also introducing a new immigration system, ensuring that the best and brightest from around the world come here to learn, innovate and create. As we invest billions in the building of new homes, we are also simplifying our planning system to ensure that beautiful homes are built where they are needed most. As we invest billions in the security of this country, we are also defending free speech and democratic rule, proving that our values are more than just words. And as we invest billions in public services, we are also protecting the wages of those on the lowest incomes and supporting jobs, because good work remains the most rewarding and sustainable path to prosperity.

    The spending review announced today sets us on a path to deal with the material matters of Government and it is a clear statement of our priorities, but encouraging the individual and community brilliance on which a thriving society depends remains, as ever, a work unfinished. We in government can set the direction. Better schools, more homes, stronger defence, safer streets, green energy, technological development, improved rail and enhanced roads: all investments that will create jobs and give every person in this country the chance to meet their potential. But it is the individual, the family and the community that must become stronger, healthier and happier as a result. This is the true measure of our success. The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes. These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by Government. These things must come from each of us, and be shared freely, because the future—this better country—is a common endeavour.

    Today, Government have funded the priorities of the British people, and now the job of delivering them begins. Mr Speaker, I commend this statement to the House.

  • Anneliese Dodds – 2020 Comments on the Comprehensive Spending Review

    Anneliese Dodds – 2020 Comments on the Comprehensive Spending Review

    The comments made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 25 November 2020.

    Thank you, Mr Speaker. This spending review was a moment for the Chancellor to take the responsible choices that our country needs. It was an opportunity to protect key workers, secure the economy and recover jobs in every part of our country.

    During this crisis, we have seen who has taken responsibility: community health workers working round the clock to keep us all safe; the teachers who kept working so that key workers could too; the delivery drivers and shop staff who made sure that we had critical food supplies. Earlier this year, the Chancellor stood on his doorstep and clapped for key workers. Today, his Government institute a pay freeze for many of them. This takes a sledgehammer to consumer confidence. Firefighters, police officers and teachers will know that their spending power is going down, so they will spend less in our small businesses and on our high streets; they will spend less in our private sector. Many key workers, who willingly took on so much responsibility during this crisis, are now being forced to tighten their belts now; not in the medium term to which the Chancellor refers, but now.

    In contrast, there has been a bonanza for those who have won contracts from this Government. Companies with political connections have been 10 times more likely to win Government contracts. So many businesses have worked tirelessly through the pandemic to support local communities, to keep critical supplies going and to produce drugs and vaccines—at cost price in AstraZeneca’s case—working with some of our country’s best scientists. But in their response to this pandemic, the Conservative Government have wasted and mismanaged public finances on an industrial scale: £130 million to a Conservative donor for testing kits that were unsafe; £150 million for face masks and £700 million on coveralls that could not be used; a £12 billion hit to our economy because the more effective, shorter, circuit breaker was blocked and a lengthier, more expensive lockdown put in place instead; £12 billion so far spent on a test and trace system that is still not working; and, today, news of £10 billion in additional costs for personal protective equipment, which was at least partly down to the Conservatives’ lack of pre-pandemic planning.

    This waste and mismanagement is part of a longer-term pattern, showing that claims today around levelling up simply do not match the evidence: hospitals in Liverpool and Sandwell left unbuilt, over deadline by years and over budget by hundreds of millions of pounds; not a single starter home built, despite almost £200 million being spent; Northern Powerhouse Rail still not even approved six years after being announced; the courts modernisation programme three years behind schedule, letting victims down up and down the country; and people in the north more likely to have been made redundant during this crisis holding everything else equal.

    Photo calls are not enough. We need delivery like the promotion of green manufacturing in the west midlands by my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) and the work of Labour Mayors and councils across the country. We need a Government in Westminster who take their responsibility towards all four nations seriously. That means informing the Finance Minister of Northern Ireland about the shorter timescale for this spending review ahead of time and fulfilling the “New Decade, New Approach” commitments. It means doing the right thing by the people of Wales to repair flood damage and make safe legacy coal tips. It means ending the barney between Westminster and Holyrood and instead working together in partnership to protect jobs and livelihoods.

    It means a shared prosperity fund that is effective because it is delivered not on the whim of Conservative Ministers but from our devolved Governments and our regions. The levelling-up fund that the Chancellor just announced—his rabbit out of the hat—yet again, just as with the Beeching reopening programme, involves MPs going to Ministers and begging for support for their areas, rather than that change being driven from local communities. So much for taking back control! This is about the centre handing over support in a very top-down manner.

    Labour has been clear about the responsible choices that we wanted the Chancellor to make today to recover jobs, retrain workers and rebuild businesses. To recover jobs, Labour called for £30 billion of capital spending accelerated over the next 18 months, focused on green initiatives, supporting 400,000 jobs and bringing us in line with countries such as France and Germany. This Government’s ambition is for half that number of new jobs. To retrain workers, we needed an emergency programme to support people back into work, but kickstart has been slow to get started, and the skills offer for those over 25 will not start until April. The Chancellor said at the beginning of his speech that our economic emergency “has only just begun”—try telling that to people who have been out of work since March.

    Restart, announced today, must meet three key tests to be effective. It should help people who need it most, not cherry-pick. It should be up and running as soon as possible, yet it appears that only a fraction of Restart funding will be available next year. And it must involve local actors who know their communities, not be imposed from Whitehall. Of course, job search support ultimately only works if sufficient new jobs actually exist. That is why we needed ambitious action to boost our economy and to support our businesses.

    To rebuild business, we called for a national investment bank. I welcome the announcement of a new UK infrastructure bank, given that valuable years have been lost since the Green Investment Bank was sold off. Now the Chancellor must boost its firepower, and he must deliver on his Department’s responsibility for the drive to net zero. We have known since the Stern report that the climate crisis is the biggest long-term threat to our economy, yet far too often, this spending review locks us into a path that will make the transition to net zero harder, not easier, locking our economy out of the green jobs of the future.

    To rebuild business, the Chancellor also needs to listen to business. We are less than a week from the end of the lockdown, yet we have heard nothing about whether extra support will be provided through the additional restrictions support grant for areas subject once again to tough restrictions. The Chancellor is still threatening employers with an increased contribution to furlough in January, at the worst possible time for increasing and building confidence.

    In fewer than 40 days, we are due to leave the transition period, yet the Chancellor did not even mention that in his speech. There is still no trade deal, so does the Chancellor truly believe that his Government are prepared and that he has done enough to help those businesses that will be heavily affected? Will he take responsible action to help those excluded from Government support? Why is he still refusing to make the speedy fixes to universal credit that Labour has advocated, which would aid the self-employed, and why will he not provide families with certainty by ensuring that the increase in universal credit continues beyond April?

    The IMF has made it clear time and again that now would be the worst time to slam on the brakes and put the car into reverse. It has called for a “meaningful additional push” from our Government to maintain fiscal support until the recovery is on a sound footing. The UK’s GDP is 10% smaller now than it was at the end of last year. We have seen the worst downturn in the G7. We needed ambitious action today to stimulate growth and maintain demand, and we needed the Government to take responsibility for the real reasons why people and communities up and down our country are being held back.

    Over the past 10 years, child poverty has risen by 600,000. We have had the worst decade for pay growth in eight generations. The cost of childcare has risen twice as fast as wages. The number of young apprentices has plummeted. Last quarter, we saw the highest level of redundancies on record. Social care is in increasing crisis and, despite the Conservative party’s manifesto having promised a long-term solution, we are still waiting.

    It was trailed in the press that the Chancellor would be moving 20,000 jobs out of London, yet cuts to local authorities over the past 10 years have seen 240,000 jobs lost—12 times that figure of 20,000—with the hardest-hit communities often those in the north, midlands and south-west. Today, the Chancellor could have matched his Government’s promise to do whatever is necessary to support local authorities through this crisis; he did not. And yet again he showed his Government’s lack of confidence in their own measures by failing to provide an equality impact assessment.

    The measure of this Government will not be the number of press releases issued during this crisis or the number of pictures it published on Instagram; it will be the responsible action that they took, or did not take, for the sake of our country.

    Next year, the eyes of the world will be on the UK as we assume the presidencies of the G7 and the UN Security Council and host the COP26 summit, yet now is the time that the Chancellor has turned his back on the world’s poorest by cutting international aid. It is in Britain’s national interest to lay the foundations for economic growth around the world—no wonder many British businesses have condemned his move.

    Businesses have been more and more vocal about the problems with this Government’s last-minute approach, always one step behind when we need to plan responsibly for the future. We must learn the lessons from previous failures and ensure that the next challenge—the roll-out of the vaccine—is dealt with as efficiently, effectively and speedily as possible.

    Next time, we need a comprehensive spending review that takes responsible choices—to build a future for our country as the best place in the world to grow up in and the best place to grow old in. People should have opportunities on their doorstep, not at the other end of the country. Everywhere in the UK should feel like a good place to set up home. That is what the Chancellor must deliver.

  • Christopher Pincher – 2020 Speech at Savills Annual Housing Seminar

    Christopher Pincher – 2020 Speech at Savills Annual Housing Seminar

    The speech made by Christopher Pincher, the Minister of State for Housing, on 23 November 2020.

    Thank you for that warm introduction, Mark. It’s a great pleasure for me to join you today, all be it virtually, given that Savills brought together such a diverse mix of key players such as housing associations, councils, developers and groups from right across the housing industry.

    Can I first of all begin by saying how grateful I am to everyone in the sector for the tremendous support that you have given and the forbearance that you have undertaken during what has been some of the most difficult years in our lifetime.

    I know it’s been very challenging for you all professionally. I expect it will have been very challenging for some of you personally. So I just want to say firstly thank you for all that you have been doing, will be doing and will continue to do for the sector, for the industry, and for your clients and customers.

    I know the imposition of this second national lockdown has been especially challenging with many businesses, once again, seeing jobs and people’s wellbeing on the line and certainly for many smaller businesses it is a very challenging time.

    But with the arrival of the new vaccines onto the scene and into the pipeline and given the resilience the housing market has shown in the last few months since it reopened in the middle of May, I think that there are glimmers of light for the recovery to come – to begin to reclaim our way of life.

    The pandemic has, undoubtedly, made us think about the way we live our lives at every level. You, in the housing sector are at the forefront of these profound changes as we attempt to build back the economy, build back our lives, and build both back better.

    Keeping the housing market open

    Throughout the pandemic, since it began in February and we began our first lockdown in March, we have done everything that we can, not just to protect people’s lives, but also to protect their livelihoods. That includes the package of measures that we have launched, and refined, and continued to roll out to support jobs and businesses across the country.

    The Prime Minister and the Chancellor have both said that we will do whatever it takes to keep businesses and their employees afloat – through tax cuts, tax deferrals, direct grants and the Furlough Scheme – we will do whatever it takes to protect our economy.

    The tough national measures that we have taken are part of that approach, but they are also, I think we’ll all agree, distinctly different from those we took in the Spring.

    I think we all recognise that the housing sector is a bellwether of confidence in our wider economy – what General Motors is in the United States, what Birmingham Yardley constituency used to be in terms of bellwethers in politics. The housing sector is a bellwether in the United Kingdom for our economy. And that is why – more than with any sector – we have done all we can to keep the industry open. Working closely with the CLC, the HPF, the Federation of Master Builders, to allow flexible working hours, to allow planning permissions are extended to ensure that safe working practices are baked into work onsite to keep the economy working and to keep workers safe.

    That really is exemplified in the Safe Working Charter which the HBF developed way back in March, and which was a signal to the reopening of the housing economy.

    Mark said we haven’t been furloughed in MHCLG – that’s absolutely right. We’ve been doing our bit to provide both financial support and stimulus to the economy.

    We have the £450m Home Building Fund which we announced before the summer, supporting the delivery of 7,200 new homes, right through to our Private Rented Sector Guarantee Scheme which has green-lighted £415m in loans to help the industry bounce back from this pandemic stronger and more resilient than before.

    With so many of us spending so much more time in our homes right now, the pandemic reinforced the need to double our efforts to build more quality homes with strong and sustainable communities, which we need now more urgently than ever.

    That means keeping up the pace on supply. We need to make up for ground lost – the emergency and the challenges to the economy notwithstanding we must meet our target of building 300,000 new homes of all types and tenures each year by the middle of this decade so that people can afford to buy or afford to rent the sorts of homes that they want to be able to provide them with the security and the opportunity that they want and need.

    Building Safety

    To that end, we are delivering the biggest improvements to the building safety regime that we have seen for a generation and pressing ahead with remediation work, which is absolutely critical to safety. I am absolutely clear that remediation must continue through these lockdowns where it is safe to do so. We’ve set aside £600 million for the remediation of ACM-clad high-rise buildings to make those homes safe. I want to thank everybody involved in the sector for their work on that.

    The Chancellor made available £1 billion at the budget for the remediation of non-ACM type cladding in tall buildings to make those safe as well, and work is advancing to make sure that that money is distributed and dispersed effectively.

    We are also introducing some of the biggest improvements in regulation ever seen through our Building Safety Bill which was published in draft in July and which will be introduced shortly to Parliament. That Bill complements very significant work that has been done over the last three or four years – the Fire Safety Act for example, building on the Fire Safety Order Act 2002 – to make sure that everybody, irrespective of who they are, where they are from, where they live, feels safe and secure in their home.

    I know that you will be hearing from Dame Judith Hackitt later on and I would like to take this opportunity to thank her for her tireless efforts to support out work, and we want to support her work as well. The good news is that now almost 80% of buildings with ACM cladding have either been fully remediated or are close to completion – and that rises to above 95% of those buildings in the social housing sector. It’s good news that progress has been made, but clearly there is much more to do. We are determined that we must do it and also the building owners, developers and warrantee holders much play their part as well.

    Building Greener

    So many people have spent so much time living at home for the past several months, and for many people the pandemic has been made tolerable at least by a good home and a garden shared with the people that they care about.

    But for too many people – people in tiny accommodation, substandard accommodation, people unable to walk to shops or green spaces or services – their homes are less like castles and are more like prisons. We have learned that spacious, well-equipped homes which offer green spaces in plentiful supply, with access to vital amenities and vibrant neighbourhoods that surround those amenities and those services – must be the standard if we are to recover from the social effects and the economic effects of Covid-19.

    That’s just what our planning reforms are aimed at delivering – greener, cleaner, more beautiful homes and neighbourhoods that we can be proud to live in, but also, more importantly, we can be proud to call a legacy for future generations.

    The reforms we’ve set in train mandate for more parks, more playing fields and greener spaces in new developments.

    They encourage developers, with the Environment Bill currently going through parliament, to think much more creatively about biodiversity. About the way bee bricks, green roofs and even community orchards can be used.
    They ensure that all new streets will be tree-lined, contributing not just to a neighbourhood’s aesthetic but also to its air quality.

    There are some really good examples of this sort of design around the world: Marina One in Singapore; Bosco Verticale in Milan which boasts, I’m told, a vertical forest which removes something like 44,000 pounds of carbon from the atmosphere each year.

    If they can be bold, we can be bold and daring the new developments that we envisage. And through our Home of 2030 Competition we launched earlier this year – in fact I think it was the first thing that I did when I became Housing Minister back in the middle of February – the Government is incentivising designers, architects and developers to do exactly that. Think like Milan, think like Singapore.

    We have six very impressive finalists who have developed their cutting-edge designs for the Homes of 2030 competition.

    I would like to thank particularly Nick Walkley, the CEO of Homes England, and I think he’s going to join us today. He has provided ready-to-go sites in which the winners can make their visions a reality. The Prime Minister has made very clear that he wants more technologically sophisticated, sustainable housing to be developed, and that is what we are going to do. We’re going to meet Net Zero targets and we are, through the Future Homes Standard, going to reduce the emissions of carbon dioxide from buildings by the middle of this decade by at least 75% compared with today.

    Building Beautiful

    As much as we want to build greener and more sustainably, we also want to build more beautifully. In championing innovation and encouraging the industry to respond to the changing needs of residents, it is also right that we celebrate beautiful design and provide trailblazing design that others can follow.

    I was lucky enough at the end of last week to go on a virtual tour of the Barking Riverside development on the site of the former power station, which is delivering something like 10,000 new homes of mixed tenures, it also offers fantastic views of the River Thames, there is a clipper service as well as a rail station going in, and making best use of an innovative new waste disposing technology called ‘Envac’, and all of this is encapsulated within a well-designed, beautiful and sustainable housing district which is in-keeping with the history, the identity of the community in which it is built.

    We have other great examples of that too – Marmalade Lane in Cambridge; Goldsmith Street in Norwich, which thank to lockdown restrictions I’ve had to cancel two visits to, but I’m rather hoping that 2021 will be a better time to visit that 2020.

    But still we know some developers pay too little attention to the character of the houses they are creating and the character of the environment in which they are creating those houses.

    Only six per cent of new homes in our country are designed by architects. Cutting back on the time and attention spent on architectural design may be a good way to save some money… But I also think that it is definitely short-sighted and, ultimately, more costly… Because building better, building more beautifully, in-keeping with an area and its aesthetic, builds in and buys in local communities’ support for those buildings.

    And that can save expensive delays, save on legal challenges and feed that developers have to pay out, and then they can focus on what really matters – building homes that community needs, building them really well, not building the sort of identikit ‘Anywheresville’ housing that perhaps we have seen too often. And that’s why we want to introduce the National Model Design Code, which will advise councils on how they can set clear expectations for the design of new development and give residents a genuine say in the future of their area.

    At their heart, these reforms are about letting communities have greater say and have more power over what is built for them and around them.

    The Planning White Paper which launched in August, with 84 pages of proposals – we’ve had 44,000 consultation responses as a result which we are working through and which we will share the results of as soon as we can and then kick off more work to refine our proposals on the back of that consultation feedback – fundamentally those reforms are designed to make our 73 year old planning system more speedy so that decisions and results can be made much more quickly.

    So that it is less opaque so that more people can navigate it more effectively which is good for local communities as well as good for SMEs.

    And we want it to be much more engaging by having strategic, upfront planning using map-based systems which zone areas, allowing people to see what is proposed for their communities and have a say on what goes where, how it’s going to look, the sorts of infrastructure that should be provided for the community. It’s much more strategic and far less tactical. It’s much more up front and far less reactive. Therefore, I think it’s much more empowering and much more democratic, and I believe that communities will see that and that they will appreciate the power that we are placing in their hands.

    ‘Build, Build, Build’

    Because fundamentally we need to build more homes. More homes around the country in places that they are needed because demand is high, in places that they are needed because the level of stock is poor, in places that they are needed because we need to reimagine our town centres and our city centres as we emerge through the Covid epidemic.

    We have travelled quite some way in the last 10 years. We have built hundreds of thousands of new homes – 241,000 in the last year alone before Covid struck.

    But there is much more to do. Whether it be building new homes for people to buy or get a stake in through shared ownership, whether it be building more affordable homes for rent or socially rented homes – and our £12.2bn affordable homes programme, the biggest cash injection to affordable homes since the 2006-2011 cycle is aimed to do just that.

    Conclusion

    I hope it demonstrates that the government is absolutely steadfast in our determination to help communities pull through what remains an extremely challenging time, but to emerge into a post-Covid world where we can look forward with optimism and determination and confidence.

    We want to overhaul a planning system which is 70 years old and which needs to change, to become steadier and more transparent and more democratic.

    We want to build more homes in the places that they are needed. We want those homes to be built sustainably. We want them to be built beautifully. We want the infrastructure around them to be provided quickly and to be right, and we want to make sure that the build environment around those communities is attractive for people today and for the future.

    We are going to work in close collaboration with councils, planners, designers, and the construction industry to make sure that the reforms we proposed are right and to make sure that they work. We are prepared to investment time and money to make sure that all these things happen.

    Because if we do that, we can build a built environment, we can build communities which people are proud to call their homes, build communities and environments that developers can be proud to say ‘we designed and built out’, which planners can be proud to say ‘we planned’, and which the future will be able to say thank you to us for doing what we did to give them the legacy that they deserve.

    I am very grateful for the time that you have given me to speak to you today. I trust that you have a great conference. That you’re able to meet up, albeit virtually, with old friends. Pick up new ideas. Be reminded of important concepts.

    And before too long we’ll all be able to do this all over again in a much more physical and friendly format. I’m sure whatever changes in that future, there will be the next Savills conference and I look very much to seeing everyone else then again.

    Thank you.

  • John Glen – 2020 Speech to the TheCityUK Conference

    John Glen – 2020 Speech to the TheCityUK Conference

    The speech made by John Glen, the Economic Secretary to the Treasury, on 19 November 2020.

    Good morning everyone

    It’s a real privilege to speak to you all today.

    While I immensely value the way that technology has enabled us to communicate with one another over the past months…

    I very much look forward to talking to you live and in person again – just as I have in the past.

    The theme of today’s event is revitalisation.

    Or perhaps, to borrow the phrase the Chancellor used last week, a “new chapter”.

    But before I turn to that subject – I’ll start with a moment of reflection.

    I’ve been Economic Secretary for almost three years now.

    That might not sound very long – but believe me it is aeons in politics.

    A lot has changed since I started in the job – both within the financial services sector and more widely but over the past eight months, Covid-19 has transformed our lives.

    I don’t underestimate for one moment, the test of leadership this pandemic has presented to you all – the people at the helm of this vitally important industry.

    But you’ve risen to the challenge.

    As the Chancellor said last week, the past months have shown your sector at its best.

    It’s your industry that has safeguarded the savings and pensions of millions of people through the choppiest waters imaginable.

    It’s your frontline workers, in banks and call centres, who have helped people access the vital financial services they need.

    And it’s your sector that has helped the Government swiftly and efficiently issue £60 billion of loan payments that have helped keep one million businesses afloat.

    So, thank you for everything you’ve done and continue to do.

    We’re acutely aware of the disruption caused by the further restrictions, that we recently had to introduce to combat the virus.

    We are grateful for your patience and we’ll be setting out further detail on our next steps as soon as possible.

    But now I want to look slightly further ahead.

    New Vision for FS

    And I’m particularly glad to speak to you today because this event is very timely.

    This moment, as we come to the end of the Transition Period, and begin our economic recovery from coronavirus marks the start of a new chapter for this country’s financial services industry.

    And last week the Chancellor, began that chapter, by setting out the Government’s vision for the future of the sector.

    It’s a vision of an open industry, where British finance and expertise drives trade, commerce and prosperity with partners in Europe and around the world.

    A technologically advanced industry, that uses all its ingenuity and talent to deliver better outcomes for consumers and businesses.

    A greener industry, that harnesses innovation and finance to tackle climate change and protect our environment.

    And above all, an industry that serves the people of this country, acting in the interests of communities and citizens creating jobs, supporting businesses, and driving growth as we direct all the strength of this country towards economic recovery.

    Needless to say, this vision will be based on world-beating regulation that is agile and responsive, along with safe and stable markets.

    Last week I laid the legislative foundations of that vision with the Financial Services Bill.

    While the Chancellor announced new policy in three areas that underpin our vision: Openness, technology and green finance.

    Openness to international markets

    I’ll turn to the first point – openness.

    Our approach is very simple. We want to become the most open and competitive financial services centre in the world.

    And our most urgent task right now is to give certainty on our approach to regulation.

    To achieve that, we need to decide on our approach to equivalence; one of the central mechanisms for managing our cross-border financial services activity within the EU and beyond.

    We strongly believe it is in the UK and EU’s mutual interest to reach a comprehensive set of decisions on mutual equivalence.

    As I think you know, our ambition had been to manage these decisions cooperatively with the EU.

    However, it has become clearer that there are many areas where the EU is not prepared to even assess the UK in the short to medium term – despite having a wealth of information at its disposal.

    We’ve no wish to politicise this situation but we simply can’t allow the uncertainty to rumble on interminably – that’s no good for industry or the economy.

    It’s time for us to move forward and do what’s right for the UK.

    That’s why last week we published a set of equivalence decisions for the EU and EEA member states, based on outcomes based proportionate assessments.

    It’s a step that should provide the certainty and stability you, as industry, need, and deliver our goal of open, well-regulated markets.

    We’ve taken a principled approach, aiming to be open, predictable and transparent, as we’ve made those decisions.

    In addition, we’ve published a detailed framework for our general approach to equivalence, taking a technical, outcomes-based approach which prioritises stability openness and transparency.

    It’s important too that our UK businesses benefit from a level playing field, as far as possible.

    As I’m sure you’re aware, UK financial services businesses cannot currently reclaim input VAT on exports to the EU.

    So, to make sure UK financial services exports to the EU remain competitive, we will treat them the same as exports to other countries.

    This means UK firms will be able to reclaim input VAT on financial services exports to the EU – support worth £800 million per year.

    And just as we are focused on providing certainty to financial services after the Transition Period we also want to help your industry seize new opportunities outside the EU.

    Earlier this year we took a major step forward with our partnership with Switzerland.

    While we recently had a productive economic and financial dialogue with India – and hope to hold a dialogue with Brazil before the end of the year.

    We’ve also just signed a trade deal with Japan that goes further than the EU’s financial services deal, and that will take effect in January.

    And financial services are a key feature of talks with other partners, such as the US, Singapore, Australia and New Zealand.

    In addition, last week we announced our intention to launch a call for evidence on our overseas regime…

    This will allow us next year, to tailor our future approach to enable market access to investment funds from other countries.

    And to build on the 113,000 jobs already supported by the asset management industry, we’ve also said we are going to publish a consultation on reforming the UK investment funds regime.

    We’ve also heeded the investment industry’s request that we make it easier to invest in longer term, illiquid assets, such as infrastructure.

    I know this is also an area of interest for TheCityUK.

    So, I was delighted that last week we set out our ambition to have a Long Term Asset Fund and have it up and running within a year.

    This won’t just be good for savers and the industry.

    It will also be good for the UK, boosting investment in the vital infrastructure that will support our economic recovery.

    Technology

    While our investment industry is one of the jewels of our financial services sector, so is our thriving fintech industry…

    a sector that has generated 76,000 jobs, right around the country.

    So, now let me turn to the next part of our vision for financial services – technology.

    We want to reach our full potential in this area.

    That’s why we’re looking forward to studying the recommendations of Ron Kalifa’s independent review, on how the UK can become the leading destination for starting up, growing and investing in FinTech firms.

    In addition, we continue to take a leading role in the global conversation on Central Bank currencies…

    with the Treasury and the Bank of England considering whether and how central banks can issue their own digital currencies.

    On that note, we’re going to launch a consultation on our regulatory approach to StableCoins.

    And this will help us seize the opportunities of this emerging form of payment but ensure it meets the same minimum standards as more traditional methods.

    While we’re on that subject, we’ve all seen how digital and contactless payments are helping to keep the economy moving throughout the pandemic.

    And through our Payments Landscape Review, we’ve been considering the new challenges and risks that arise from this rapid switch to these new forms of payments.

    We do have some work to do on this front.

    So, I’m delighted that we received over 60 responses to the review to help inform our decisions. And we’ll be setting out our next steps early in 2021.

    Green Finance

    I’ll move on now to the last area of policy I’d like to discuss today – harnessing the power of financial services to tackle climate change.

    This is a real personal priority of mine.

    In fact, last time I spoke to you, I talked about the need to turn this challenge into a spur for technological, economic and social progress.

    Because we really do want to take a lead here.

    That’s why last year we launched the Green Finance Strategy – to mobilise investment in clean and resilient growth.

    And now as we prepare to host the COP 26 UN climate conference next year and the G7 conference, we have a real chance to shape the future agenda in this area.

    So, I’m delighted that last week we announced our intention to introduce mandatory Taskforce on Climate Related Financial Disclosures, requirements across the economy by 2025, with a significant portion of requirements in place by 2023.

    This is a really significant moment. It makes this country the first to go beyond ‘comply or explain’ or ‘as far as able’ requirements while the UK’s TCFD Taskforce Interim Report, also published last week, sets out how we will meet this important commitment.

    We’ve also said that we’ll issue our first ever green sovereign bond.

    I know that it’s something some of you have been calling for some time – so I’m delighted to show you that we’ve made progress on this front.

    Wider Programme of Regulatory Reform

    These policies begin a new chapter for financial services.

    And they are part of an ambitious programme of regulatory reform being undertaken by the Government.

    Because now we’ve left the EU, we have the opportunity to take back control of decisions governing the sector and to be guided by what is right for the UK – to regulate differently and regulate better.

    As I mentioned earlier, last week, the Financial Services Bill had its second reading in Parliament, marking the next stage of our reform agenda.

    The Bill will deliver several existing government commitments and will help ensure the UK maintains its world leading regulatory standards, as well as ensuring our openness with international markets.

    And, we’re also taking a fundamental review of our Financial Services Regulatory Framework.

    This will allow us to consider how we may need to change the way we make and shape our future rules, now we have left the EU while building on the strengths of our existing framework and on the role played by our independent financial service regulators.

    We’re also carrying out a number of other reviews in areas that we know are a priority for industry…

    including looking at the Solvency II Directive to make sure it properly reflects the unique features of the UK insurance sector.

    So, as you can see, we are at the start of a new chapter.

    And while all of this is going to keep me and my team busy.

    It’s not a job for us alone. It’s going to take the collective efforts of us all.

    And I really do mean all of us – from the biggest bank to the smallest fintech start-ups in every part of the country.

    Indeed, as the Chancellor said last week financial services are not synonymous with the City of London.

    That’s why, over the coming weeks, I’ll be making a point of meeting those of you based outside of the Capital, as I know that you are going to play a crucial part in realising our vision.

    I’ll wind up by saying that I really do mean that it is a privilege to talk to you today.

    And I very much look forward to working with you all over the weeks and months ahead so we can together make this next chapter for your sector even better than the one before.

    Thank you.

  • Liz Truss – 2020 Speech on Digital Trade

    Liz Truss – 2020 Speech on Digital Trade

    The speech made by Liz Truss, the Secretary of State for International Trade, at TheCityUK Conference on 16 November 2020.

    Good afternoon everybody. It’s a great pleasure to be here at TheCityUK conference today to talk about how we can make the UK a hub for digital and services in trade.

    Now we all recognise Covid is a very difficult time, not just for Britain but right all around the world. But the way we are going to recover from this crisis is through trade.

    And what is particularly important is trade in services, and trade in digital. We have seen how over the course of the pandemic there has been an acceleration of the use of technology, and of course Britain is incredibly well placed to benefit from the future growth in areas like digital, services, and technology.

    From robotics to fintechs, to computer games, to green finance, we are the second largest exporter in the world, totalling £318bn, and we export nearly as many services from Scotland and the North West of England as the entirety of France does.

    We are the top FDI destination in Europe, with more investment in technology than Germany and France put together, totalling more than £10bn. Our computer games industry is growing faster than ever, and in terms of “tech unicorns,” billion-dollar tech companies, we have more than any other country apart from the United States and China. Fintechs firms like Revolut, Monzo and Transferwise, so we really are leaders in the area of services and technology.

    What I think we can do with our own independent trading policy is we can help shape the future of the global rules in areas like digital, in areas like services, that haven’t seen the level of reform that they need to at the World Trade Organisation.

    We can work with like-minded partners, other countries that believe in free enterprise, democracy, and the global rules-based system, to actually promote those new areas like digital and data trade.

    We are prioritising our services in digital industry, alongside our other key interests like advanced manufacturing, and like the food and drink industry.

    In all of the trade negotiations we are currently engaged in we are looking for advanced services chapters with our negotiating partners in areas like data and digital, in areas like financial services, mutual recognition of professional qualifications, and mobility.

    Because we know that all of those specific chapters, specific areas, deliver real benefits not just for London and the South East, but right across the United Kingdom.

    We also have just announced our new Office for Investment, bringing together a crack team across Government, under the leadership of Lord Gerry Grimstone, which will deal with the bureaucratic barriers that investors face when they’re seeking to invest in the United Kingdom.

    We are also boosting our exports in areas like digital and services, we have just launched for example a digital and trade network across Asia Pacific to support companies out in that region, with people on the ground that understand the details of those businesses. And what is really important is that as we negotiate these new trade deals, we are drawing on the strong expertise of the industry that we have in the country.

    So this is why we’ve established new Trade Advisory Groups, and on them sit organisations like CityUK, and other professional services, financial services, and legal services organisations – making sure that as we negotiate the deals we are getting the specific advice, the technical advice, that is going to give us the best possible deal for the United Kingdom.

    We also make sure that leading professional service providers sit on our Strategic Trade Advisory Group, like KPMG. And we have also got the Board of Trade, which leads on our broader trade strategy and new ideas. We have got the founder and Chief Executive of Starling Bank, Anne Boden, on the Board of Trade, as well as the Lord Mayor of the City of London, because our trade policy is designed to benefit businesses across the UK. We can only make sure that it does that if we are involving and engaging you as we work on these trade negotiations.

    We do see an opportunity to lead the world in areas like digital and data trade, and services trade.

    Next year we will have the Presidency of the G7, and trade will be one of the key issues we are discussing. We will be looking at green trade; we will be looking at trade against pandemics; we will be looking at reforming the WTO to update the rules for the modern age; and we will also be looking at digital and data trade. And again, we will be involving organisations like TheCityUK in the work we’re doing to promote those initiatives.

    We launched the UK Global Tariff earlier this year, it is a simpler lower tariff than the common external tariff. What it also does is reduce tariffs on a hundred green products, an idea we are very keen to promote across the world to encourage other countries to adopt it.

    Because as we seek to move forward on the green agenda, as we are hosting COP26 next year, the UK has already become the first country in the world to make robust environmental disclosure standards mandatory, and we are doubling our international climate finance to £11.6bn.

    We believe that through a combination of technology, of trade, and of working together with other nations we can make a real difference.

    And in terms of our broader trade agenda, we have put in our manifesto our ambition to get 80% of the UK’s trade covered by Free Trade Agreements within three years. We want to build a cat’s cradle of trade deals across the Atlantic and Pacific, with the United Kingdom at its heart.

    Now this isn’t a typical cat’s cradle, we want one that’s supercharged by fibre optic cables and satellites, and we want it focused on our strengths which, alongside food and drink and advanced manufacturing, are digital and services.

    Miles very kindly mentioned the Japan deal that we have recently struck. This deal is important because it shows the type of trade policy that the United Kingdom wants to have post EU as an independent trading nation.

    It goes further than the existing deal in areas like digital and data, anti-data localisation, protecting the free-flow of data, but also protecting things like source code and net neutrality.

    It goes further in terms of professional services, of mobility of professionals between the United Kingdom and Japan.

    It goes further in areas like intellectual property protection, and it goes further in areas like protection of Geographical Indicators.

    What it does is allows greater innovation, it allows greater trade, particularly in technology. But it also makes sure that our financial services trade is underpinned by regulatory dialogue and again underpinned by advanced data and digital agreement.

    Our services are our biggest export to Japan, accounting for 51% of trade. I was very pleased that TheCityUK concluded that it raises the bar for trade agreements in services. I mentioned the temporary movement of high skilled professionals, but what we’ve also achieved in the Japan deal is measures affecting the supply of services, including technical standards and making sure they’re administered in a reasonable, objective, and impartial manner.

    It also paves the way for us to explore mutual recognition of professional qualifications, and British providers stand to benefit from most rules Japan may liberalise, such as the Foreign Lawyers Act. I believe that these provisions show the UK’s commitment to a liberal and transparent trading environment.

    And what we secured in the Japan deal is only the start. We are also in negotiations with the United States, we recently completed round 5. Again we are looking for an ambitious financial services chapter, with high regulatory standards and the agreement to facilitate cross border flows.

    Of course, we are working with both parties in the United States, there is a consensus that a trade deal with the United Kingdom is a good thing, and we are determined to make further progress.

    We are also working with our close allies, Australia and New Zealand, on gold standard deals that would go further in areas like services, in areas like digital data, and in areas like investment. And these agreements are important in themselves, for the economic benefit they bring, but they’re also important because they provide a bridge towards the Trans-Pacific Partnership.

    The Trans-Pacific Partnership is a very exciting agreement because it contains some very high-quality services chapters that will be of huge benefit to the United Kingdom.

    British companies have been doing £111bn worth of trade with members of this free trade zone, and we can do even more as a full member of the organisation. It would give us unprecedented and deep access to over 40% of the world’s Gross Domestic Product, which equates to over £27tn. And if you add the EU to that number, that’s £40tn.

    What I think is interesting about CPTPP is the ability to have a single set of rules operating across that area, which not only benefit our businesses, but also help to set the global environment in a world where the WTO hasn’t significantly updated its rule on some of these issues since 1995.

    We are also doing further work alongside Trans-Pacific Partnership accession with countries like India and Brazil to remove market access barriers in areas in both goods and services.

    One thing I did want to mention is the importance of digital and data and services in trade, and the fact we think it’s not fully being taken into account in the economic models we do at the moment. So this is where we have commissioned Tony Venables of Oxford University to look at the benefits in particular of digital and data, and services, chapters on trade agreements.

    A recent study of USMCA suggested that digital and data chapter actually had more effect on the economy than any other part of that agreement, and we suspect that’s the case for deals like Japan and the Trans-Pacific Partnership, and we want to get more evidence about the specific benefits that digital and data provide.

    It has been great to have the opportunity to talk to TheCityUK about our ambitious plans to create a cat’s cradle of trade deals across the world, with advanced services and digital chapters.

    We believe that we can open up new opportunities to businesses abroad and attract more investment across our country.

    We have unparalleled opportunities ahead because we are prepared to be innovative, we are prepared to look at new ideas, we are open to these advanced digital and data agreements. And we believe that this can benefit domestic industry in the United Kingdom, but also attract more investment overseas.

    I think this year, of all years, we have seen that our services and digital and data trade is a key for the future prosperity of the United Kingdom. At the Department for International Trade we are absolutely determined to make sure that we continue to deliver on that, that we continue to open up new opportunities, and we continue to work with this industry that is so vital for the whole United Kingdom.

    Thank you.

  • Jesse Norman – 2020 Statement on Tax Policy

    Jesse Norman – 2020 Statement on Tax Policy

    The statement made by Jesse Norman, the Financial Secretary to the Treasury, on 12 November 2020.

    In line with the tax policy-making framework, the Government consulted on a number of tax policies announced at spring Budget 2020. Today, the Government are publishing responses to some of the consultations that were extended due to covid-19, alongside draft legislation which will need to be introduced.

    The Government are also publishing responses to calls for evidence in the market for tax advice, as well as a consultation on making tax digital for corporation tax.

    Finally, the Government are making some tax policy announcements for tobacco and vehicle excise duties, measures to tackle promoters of tax avoidance, a small change to off-payroll legislation, and delays to other measures and reviews.

    Previously announced publications

    The Government are publishing a summary of responses and draft legislation for each of the following measures, as announced at the spring Budget:

    Plastic packaging tax

    Tackling construction industry scheme abuse

    R&D SME tax credit PAYE cap

    Tax implications of the withdrawal of the London inter-bank offered rate (LIBOR)

    Hybrid and other mismatches

    The Government had extended the policy consultation response deadlines for these measures in April, in response to the covid-19 outbreak.

    Draft legislation is accompanied by a tax information and impact note (TIIN), an explanatory note (EN) and, where applicable, a summary of responses to consultation document. All publications can be found on the gov.uk website. The Government’s tax consultation tracker has also been updated.

    Raising standards for tax advice

    The Government are publishing a summary of responses and next steps from the call for evidence on raising standards in the market for tax advice. As a first step towards raising standards, the Government will consult on requiring tax advisers to hold professional indemnity insurance and how to define tax advice. The majority of respondents supported Government action to raise standards.

    Tackling promoters of tax avoidance

    In line with the Government’s strategy to tackle promoters of tax avoidance schemes, published in March, the Government are today announcing that they will consult in the new year on further measures to tackle promoters. These proposals will build on the proposals announced earlier this year and will:

    disrupt the business model of offshore promoters by making it harder for such promoters to access the UK by making their onshore partners equally responsible for the anti-avoidance regime penalties that the offshore promoter generates.

    directly tackle the secrecy on which promoters rely; the proposals here would ensure that taxpayers are fully informed of the reality of what is being sold to them.​

    disrupt the economics of tax avoidance by ensuring that, without delay, promoters face financial consequences for continuing to promote tax avoidance so that promoters cannot continue to profit from avoidance while HMRC investigates them.

    give HMRC additional powers to act against companies that continue to promote schemes and who sidestep the rules designed to restrict their activities. The proposals would see such promoters shut down and restricted from setting up similar businesses.

    The Government continue to recognise that the many tax advisers who adhere to high professional standards are an important source of support for taxpayers. The proposals are aimed at targeting those promoters who exploit every opportunity to personally profit by sidestepping the rules and whose unscrupulous actions often leave taxpayers with significant tax bills.

    The Government continue to recognise that strengthening HMRC powers in the way described must be done in a carefully constrained way. HMRC will again work with stakeholders, and in particular those tax advisers who adhere to high professional standards, to ensure that these proposals are both effective and proportionate.

    Making tax digital for corporation tax

    The Government are publishing a consultation on the design of making tax digital for corporation tax, as announced on 21 July. This will allow stakeholders to inform the early stage design of making tax digital for corporation tax and to provide businesses with time to prepare.

    Further policy announcements:

    The Government have made a number of further policy decisions which are being announced today, relating to:

    Extending the annual investment allowance provisional £1 million cap

    The Government are today announcing a year-long extension to the temporary increase of the annual investment allowance (AIA). The AIA provides firms 100% same year tax relief on qualifying capital expenditure, up to a fixed limit. Instead of allowing the AIA to revert to £200,000 from 1 January 2021, the Government are extending the temporary £1 million cap set at Budget 2018 until 31 December 2021. This announcement:

    Responds to the needs of business, giving enhanced tax relief on plant and machinery expenditure;

    Provides businesses with upfront support during continuing covid-related uncertainty;

    Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.

    Tobacco duty uprating

    The Government are announcing the uprating of tobacco duties to protect the public finances, continue the drive to reduce smoking prevalence, and support the Government’s target for a smoke-free England by 2030. In line with the existing escalator, duty rates on all tobacco products will increase by RPI + 2%. In order to narrow the gap between hand-rolling tobacco (HRT) and cigarette duty rates and ensure the Minimum Excise Tax (MET) continues to be effective in the current market, HRT will increase by RPI + 6% and the MET by RPI + 4%. The Treasury is laying an order before the House to enact these changes, which will take effect on 16 November.​
    Van vehicle excise duty

    The Government will not now introduce a new graduated system of vehicle excise duty for light goods vehicles or motorhomes from April 2021, to avoid distracting the automotive sector and businesses more widely from the challenges they currently face in light of the covid-19 pandemic. Motorhomes will continue to be placed in the private/light goods class.

    Off-payroll working—technical change to ensure legislation operates as intended

    A technical change to the off-payroll working rules will be made in the next Finance Bill. This will ensure the legislation operates as intended from 6 April 2021 for engagements where an intermediary is a company. The change will correct an unintended widening of the definition of an intermediary, which went beyond the intended scope of the policy.

    Notification of uncertain tax treatment by large businesses

    The Government are announcing the implementation of the new requirement for large businesses to notify HMRC of uncertain tax treatments will be delayed until April 2022. This will allow more time to get the policy and legislation right following the recent consultation, including through further engagement with stakeholders, and will give affected businesses more time to prepare for the change.

    Timely tax payments and review of tax administration framework

    On 21 July, the Government committed to publishing calls for evidence on timely tax payments and a review of the tax administration framework. Given the continued pressures of the covid-19 outbreak, and with other consultations in progress, the Government will now publish these documents in spring 2021.

    Soft drinks industry levy (SDIL) milk review

    In 2017, the Government made a commitment to review the exemption for sugary milk and milk-substitute drinks from the soft drinks industry levy (SDIL) by 2020. The Government have been clear that if industry does not make enough progress on voluntarily reformulating these drinks, the Government may extend the SDIL to include them. In light of Public Health England’s latest reformulation report (published earlier this month) that shows good progress has been made in sugar reduction of milk-based drinks, the Government will next consider the exemption for sugary milk and milk-substitute drinks in 2022 after the full reformulation programme completes.

  • Therese Coffey – 2020 Comments on the Kickstart Scheme

    Therese Coffey – 2020 Comments on the Kickstart Scheme

    The comments made by Therese Coffey, the Secretary of State for Work and Pensions, on 12 November 2020.

    Every job created by the Kickstart Scheme is a potentially life-changing opportunity for a young person, and the heartening response of employers shows they recognise the huge value in giving youth a chance.

    The pandemic has hit young people hard, but we are doing everything in our power to give them hope and the chance to find their place in the world of work.

    Employers from all corners of the country have signed up, creating thousands of new and interesting jobs and helping us to level up as we build back better.

  • Rishi Sunak – 2020 Comments on the Kickstart Scheme

    Rishi Sunak – 2020 Comments on the Kickstart Scheme

    The comments made by Rishi Sunak, the Chancellor of the Exchequer, on 12 November 2020.

    Our country’s future will be built by the next generation, so it’s vital that we harness the talent of young people as we rebuild from the pandemic. But this isn’t just about kickstarting our economy, we’re giving opportunity and hope to thousands of young people, kickstarting their careers and offering them a brighter future.

  • Jesse Norman – 2020 Comments on Annual Investment Allowance

    Jesse Norman – 2020 Comments on Annual Investment Allowance

    The comments made by Jesse Norman, the Financial Secretary to the Treasury, on 12 November 2020.

    It is vital that we support business through the difficult months ahead.

    Extending the Annual Investment Allowance’s £1 million cap will give businesses the confidence they need to invest into next year, helping them to grow whilst benefitting the wider economy too.

  • Jonathan Reynolds – 2020 Comments on Kickstart Scheme

    Jonathan Reynolds – 2020 Comments on Kickstart Scheme

    The comments made by Jonathan Reynolds, Shadow Work and Pensions Secretary, on 12 November 2020.

    These latest figures show the Government’s Kickstart scheme is failing to deliver for young people, creating opportunities for just 3% of the 600,000 young people unemployed. The Government must be much more ambitious if we are to prevent a generation scarred by long term unemployment.

    It is worrying that months into this jobs crisis we still have no plan from this Government to tackle rising unemployment and get Britain back to work.