Coronavirus: Job-Support Schemes

Debate between Angela Eagle and Jesse Norman

Tuesday 7th July 2020 Commons Chamber

[Jesse Norman]

I have not gone into the arrangements for pandemic that the Treasury had in 2016, at the time the hon. Lady mentions, so I cannot comment on that. What I can say is that when pandemic struck, the two schemes were put in place with astonishing speed and capability. I do not think that is contested in the Chamber; it is well understood.

The coronavirus job retention scheme was announced by the Chancellor on 20 March and opened for applications just one month to the day afterwards. Six days later, the Government announced the self-employment income support scheme, with a target of making the first payments by the middle of June. In fact, the online portal opened for applications on 13 May, weeks ahead of schedule, with the first grants being paid into bank accounts on 25 May and within six days of application thereafter. That was achieved with more than 80% of HMRC staff working from home. Silos disappeared and timelines were condensed to extraordinarily short lengths of time as officials from across Whitehall came together to solve the problems. In so doing, they set up a kind of exemplar of what a really effective 21st century civil service would look like. It is a model that we are looking at very closely in our thinking about how we might change the tax administration system to make it more resilient in response to the concerns.

The achievements I have outlined have been widely welcomed in this debate, and rightly so. There cannot be any Member who has not walked down their local high street in the past week or two and spoken to those at the shops that are reopening who have had the benefit of the furlough scheme, or to traders who have had the benefit of the self-employment scheme. I am massively proud—we should be proud as a House—of HMRC’s efforts to design and deliver the schemes so quickly and with such effect.

The CJRS—the furlough scheme—has helped 1.1 million employers throughout the United Kingdom to furlough 9.3 million jobs, while 2.6 million self-employed individuals have applied for grants worth more than £7.7 billion. As has been said often, I do not pretend today for one moment—I do not think any one of us does—that the schemes are a panacea. Right hon. and hon. Members have rightly highlighted instances of groups and individuals who are very regrettably and unfortunately not eligible under the scheme rules. It is important to say that under no circumstances and at no point have those people been in any way forgotten by the Government; we have listened carefully to Members, as well as to employers, and refined both schemes to include more people where possible. For example, those returning to work after periods of parental leave and reservists who return to their jobs after active service in the armed forces are now able to access the flexible version of the furlough scheme, and similar accommodations have been made with respect to the self-employment scheme.

Together, the measures I have outlined represent an economic intervention unmatched in recent history. Nevertheless, the practicalities are such that the Government have not—I recognise this—been able to support everyone in exactly the way they would want. If I may, I shall address some of the specific points raised in the debate in a moment, but first it is important to understand the principles that guided the Government’s response.

[Ms Angela Eagle]

It is not that we wish the Minister to support people in the way that they want. He has to recognise that there are 1 million people who have been given no support at all; we want some consideration for them. Their businesses and livelihoods have been affected because of Government decisions that—understandably, for health reasons—closed down the economy. Will he please address that?

[Jesse Norman]

I will be coming to some of the points that the hon. Member raises later in my remarks. We are focusing on the furlough scheme and the self-employment scheme, but of course these schemes have been a small percentage of the overall response, which has included a vast array: £300 billion of loans, tax deferrals, grants, reliefs and the rest of it, as well as support under universal credit and other forms of benefit. It has been a very, very comprehensive system of support, of which we can be proud.

Let me push on. I was talking about the principles involved. The scale and urgency of the crisis were such that the Government’s overwhelming and overriding motivation was to deliver the greatest help to the greatest number of people as quickly as possible. That was the driver behind the schemes. Both were designed to make use of existing processes and verifiable data precisely in order to make the implementation happen in the fastest possible time and to minimise the risk of fraud, error and delay. Any delay would have meant that millions of people who benefited from the schemes would not have received the support when they needed it most.

It has not been possible to extend the self-employment scheme to individuals who became self-employed after 2018-19, because although self-employed taxpayers can file returns for 2019-20, this would have created an opportunity for fraudulent operators and criminals to file fake returns. It does not take an enormous amount of mental mathematics to calculate that a relatively small percentage of additional fraud would equal quite a lot of additional schemes that would have to have been assessed and worked through the system. That is what makes it so difficult. As the House knows, these problems have been highlighted in testimony to the Treasury Committee. It is also important to be clear that these are just two measures within a much larger package of Government support.

I only have one minute left, so let me turn quickly to the points that have been raised. My right hon. Friend the Member for Central Devon raised the question of fairness to individuals. I understand his point. I think he is aware that the schemes are targeted at those who need them most, and the self-employment scheme is most reliant on people’s self-employment income. He has had an explanation of the 95% figure that we have used—that is, those who get more than half their income from self-employment and who could be eligible for the scheme. Of course, many of those people are also entitled to claim other benefits.

The hon. Member for Hackney South and Shoreditch (Meg Hillier) said that it cannot be beyond the wit of the Government to address these issues. Of course, it is true that people have found groups that have been left out, but I put it to her that this has been extraordinarily difficult. We have been able to make changes at the margins but not at the core, precisely in order to deliver the benefits we wanted.

Let me finally say, in response to my hon. Friend the Member for Wycombe, that the OBR has projected some £60 billion in total for the current schemes and £15 billion for supplementary estimates. That may be the order of magnitude that we are talking about. I wish that I could speak for longer.

Economic Outlook and Furlough Scheme Changes

Debate between Angela Eagle and Jesse Norman

Tuesday 16th June 2020 Commons Chamber

[Jesse Norman]

Nothing could silence the hon. Gentleman’s voice; I am glad to have been able to hear his question. I would be very happy to talk to him. I suspect that there are several hundred miles between us, but I will make sure that we find some way to talk to each other.

[Ms Angela Eagle (Wallasey) (Lab)]

I congratulate the Minister on getting through the entire UQ without making a single commitment, although he has made many observations. As a member of the Treasury Committee, I look forward to the Government’s formal response to our report on the 1 million people who are currently missing out on the Government’s schemes. Will he see if he can at least make a commitment before today’s UQ ends? What is he doing as a Treasury Minister to ensure that, as we move from the acute stage of the pandemic to furlough schemes beginning to end, the furlough scheme is not remembered as a waiting room for unemployment rather than the job saving scheme that it should have been?

[Jesse Norman]

The hon. Lady will recall that the topic of the UQ is the job retention scheme and the self-employment scheme, and their relation to the UK economy in the face of covid, and that is what I have focused on. Of course, as a former member of the Treasury Committee myself for five years, I will take its report very seriously, as she suggests. In many ways, it may well be that people will look back on the job retention scheme and conclude, as the shadow Chancellor has, not only that it was considerably better than any possible alternative or inaction, but that it saved an enormous number of jobs.