Rishi Sunak has said that young people “will be prioritised” in the Government’s plans for a post-Covid-19 economic recovery.
The Chancellor was asked by Tory MP Laura Farris (Newbury) for reassurances about the economic prospects for young people in recovery plans.
Mr Sunak replied in the Commons: “Young people are more likely than not to work in affected sectors, they are more likely than others to be furloughed, and we know from all the evidence that the impact of scarring on young people is very significant.
“And which is why they remain uppermost in my mind and I give her that reassurance that they will be prioritised as we think about our recovery and our labour market interventions.”
Mr Sunak also said he will “very quickly” look at whether employer-provided Covid-19 tests count as a “taxable benefit in kind”.
Employees face extra income tax bill if they have virus tests for work https://t.co/kdN0MJiDOu
— Treasury Committee (@CommonsTreasury) July 7, 2020
Mel Stride, Tory chairman of the Commons Treasury Select Committee, urged the Chancellor to investigate this as he said it could hit the pockets of frontline workers who are regularly tested.
He added: “On HMRC’s website, recently-appeared guidance suggests those who take Covid-19 tests as provided by their employer will have to treat the cost of those tests as a taxable benefit in kind – something which is very unfortunate in particular in respect of those frontline workers who may be involved.”
The Chancellor replied: “I’m delighted with him for raising this with me and of course we will look into it very quickly.”
He also told MPs that the Government has protected 9.4 million jobs and supported the incomes of 2.7 million self-employed through its Covid-19 assistance schemes.
Labour pressed the Chancellor to develop a sector-specific furlough scheme for areas of industry most likely to be affected by job losses.
Shadow chancellor Anneliese Dodds said the Government’s job retention scheme is being “wound down” from the start of August and warned that the plan is causing “very substantial redundancies”.
She asked: “Why is he persisting with this one-size-fits-all removal of the job retention scheme when this will inevitably lead to additional redundancies?”
“This report indicates the enormous long-term costs of mass unemployment to the UK economy. If the Conservatives are serious about adopting Labour’s calls for a focus on ‘jobs, jobs, jobs’, they urgently need to change tack." – @AnnelieseDoddshttps://t.co/oZw60qHEMW
— Labour Press (@labourpress) July 7, 2020
The Chancellor replied: “This is not about picking winners or losers, this is about protecting people’s health, and where it is incumbent on the Government to step in and make sure we can protect people’s health through targeted interventions, that will remain the right thing to do.”
On the furlough scheme, Mr Sunak added: “We are in the belief, rightly, that this is a universal scheme, it is generous, it has been extended to October and it’s winding down in a gradual and temperate manner.”
Ms Dodds added: “It is disappointing to hear the Chancellor is not budging from this position. As mentioned, it’s already leading to additional waves of redundancies, avoidable redundancies in many cases.”
Concerns over the tourism and aviation sectors were raised by Tory MPs, with Damian Collins (Folkestone and Hythe) suggesting the Treasury cut VAT to 5% for hospitality businesses.
Treasury minister Kemi Badenoch said “all taxes are kept under review”.
Henry Smith, Tory MP for Crawley, said: “To help the aviation and travel sectors recover from the negative impact of Covid-19, will (the Chancellor) consider suspending air passenger duty until at least the end of summer 2021?”
Mr Sunak replied: “At the Budget we committed to a consultation on aviation tax reform and we remain committed to that and will bring forward the timing in due course.”