Economic Update

Bernard Jenkin Excerpts

Monday 11th January 2021 Commons Chamber

[Rishi Sunak]

I thank the hon. Member for her response, and in particular for her comments about my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), which I appreciate.

I think that it is right, where possible in this House, that we acknowledge those areas—many areas, in fact—where there is agreement on both sides of the House: for example, on wage support, on business support, on loan guarantees, on funding for critical public services, on tax deferrals and tax cuts, on support for renters and homeowners, on support for job creation, retraining and skills, on support for children learning at home, on support for the self-employed, on support for the NHS, on support for the vaccination roll-out, and on testing. I could go on. The truth is that, politics aside, there is in fact significant unity of purpose in this place: to protect the most vulnerable; to vaccinate our people as quickly as possible; to reopen our country; and, finally, to rebuild and begin the process of recovery. Given this agreement, while it is right to acknowledge the difference in degrees and emphasis that the hon. Member poses, it is clear that on the fundamentals there is, in fact, little disagreement.

Let me turn to the shadow Chancellor’s specific areas of concern. With regard to the formula for the local authority grants, I can tell her—as was, I think, published—that the formula for the additional half a billion pounds will be the same as that for the £1.1 billion that was issued shortly before the end of last year. With regard to the furlough dates, she will be pleased to know that the change in date from the original spring date through to the new date at the end of October, before the announcement of the new scheme and the extension, will bring an additional 3 million people into coverage for the furlough scheme. I am sure that she will join me in welcoming that the scheme has protected more than 9 million jobs over the past several months. It is, of course, already possible for people to be furloughed if they are clinically extremely vulnerable or have childcare difficulties, but those decisions are, of course, to be made by individual employers and their employees. It would not be right for the Government to put a blanket mandate in place. The hon. Member is right that the Budget is the appropriate place to consider her various other questions, given the scale of the response and the fact that all our major avenues of support have been extended through to the spring.

The hon. Member made a comment about this country having experienced the worst recession out of anyone. It is important in this place that people have the right facts, particularly when those facts impact people’s confidence and understanding of what is happening. I must gently point out some facts, which I am sure the hon. Member knows, because she will have studied this carefully. She will know that, when making international comparisons between the performance of our economy and others, it is important that we are careful because everybody calculates things in very different ways. Indeed, as the Office for Budget Responsibility mentioned in its latest report—which I am sure she will be able to read—and as the Office for National Statistics has highlighted, in this country we calculate public sector output very differently from almost any other country. It is very clear that the way in which we calculate that output flatters other countries and disadvantages us when it comes to making such comparisons. As those independent forecasters have pointed out, when corrected for that difference, we find that our economic performance is actually very much in line with comparable countries. It is not the worst, and I do not think that it is good for confidence or for people’s understanding of the situation for that to be propagated.

Throughout this crisis the Government have always been pragmatic. When changes must be made, we have made them, and when help has been justified, we have always provided it. We are now so close to the end of this difficult period for so many people that I would ask the hon. Member at this time to recognise that the national interest is best served by our co-operation, not partisanship. The vaccine roll-out is the most important priority of this Government and provides us with the path to getting out of this situation, protecting people’s health and releasing the restrictions that are hampering our economic recovery. That should be our focus—I know she will agree with me on that—and it is in that spirit, in the best traditions of this House, that I hope we will be able to see out this crisis in the coming months.

[Sir Bernard Jenkin (Harwich and North Essex) (Con) [V]]

I thank my right hon. Friend for his statement. I welcome the continuation of the vital measures to support British business through this further period, while keeping an eye on the hospitality sector and small businesses, which continue to have a very hard time and may need extra help.

May I invite my right hon. Friend to recall how we had to put VAT on to energy-saving products before we left the European Union, because of European Union rules? Having struck VAT off sanitary products, can we look at other opportunities to use our freedoms now that we have left the EU to strike VAT off energy-saving products such as solar panels and home insulation, in order to promote the greener recovery that we want to see emerging from this crisis?

[Rishi Sunak]

I thank my hon. Friend for his advice and for the helpful information about the hospitality industry that he provided me with over the winter period. It has been helpful in formulating our response and I thank him for it. I also appreciate his thoughts on future tax policy, which he will know remains for the Budget. He is right to emphasise the importance of our green recovery, which was why I was pleased to make sure that we can fully fund, with £12 billion, the Prime Minister’s 10-point plan for a green recovery, of which ensuring that we upgrade the efficiency of our buildings with regard to heat and energy is a key part, with more than £1 billion put aside for that. I will bear my hon. Friend’s further thoughts in mind.