(3 years, 6 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
15:57 - The House divided: - Ayes: 261 / Noes: 338 - Question accordingly negatived.
Mr Speaker
I inform the House that I have selected the amendment in the name of the Prime Minister.
Anneliese Dodds (Oxford East) (Lab/Co-op)
I beg to move,
That this House believes the Government should do what it takes to support areas with additional local restrictions, currently the North of England and parts of the Midlands, Scotland, Wales and Northern Ireland, by reforming the Job Support Scheme so it incentivises employers to keep staff on rather than letting them go; ensuring no-one is pushed into poverty when they do the right thing; providing clear, consistent and fair funding that goes hand-in-hand with the imposition of new restrictions, including using the £1.3 billion underspend on the grants fund to support local jobs; fixing gaps in support for the self-employed; and extending the ban on evictions.
We are at a critical moment for our country. Infection rates are rising, and the economic outlook is worsening. It is more vital than ever that this Government get a grip on both the health and the economic crises. There are some who seek to pit people’s health against our economy, but we all know that our country has suffered a double tragedy: the highest excess death rate in Europe and the deepest recession in the G7. The predominant reason why many expect our recovery to proceed more slowly than that in other countries is the continued severe impact of the public health crisis in the UK. It has been suggested that the Chancellor blocked proposals from the Scientific Advisory Group for Emergencies for a circuit breaker. He can now, if he wishes to, intervene on me and set the record straight.
Anneliese Dodds
I asked the Chancellor to intervene on me. I am willing for another Member to, and perhaps the Chancellor will follow.
Kevin Hollinrake
The hon. Member mentioned “a” circuit breaker, but the guidance from SAGE says that “multiple” circuit breakers might be required to bring the virus under control. How many jobs does she believe those circuit breakers would cost?
Anneliese Dodds
I was just about to go on to say that the Government’s current stance is costing jobs and leading to reduced business confidence. If we continue as we are, without taking control of the public health situation, we will see a worse situation for jobs and businesses in our country. It appears that that will be the only intervention that I will receive.
It is clear that blocking a circuit breaker does not make sense for the health of our population or for our economy. Government Members need a reality check. One in four people in our country are subject to localised restrictions. We have already experienced a record rise in quarterly redundancies. Without action, we face the prospect of infections rising yet again, with more and more areas coming under localised restrictions and the Government eventually being forced into more national restrictions in any case. Every week of that inaction will hit business and consumer confidence, costing more jobs and livelihoods, with more businesses going to the wall. The question is not whether we can afford a circuit breaker. The question is whether we can afford to continue with a Government who duck taking hard choices until they are forced into them and who seem unable to stand apart from their chaotic lurching from week to week to assess what our country needs and take decisive action.
That circuit break must be used to fix test and trace, devolving it to local areas, so that we can protect our NHS, get control of the virus and start building economic confidence back up again, and it must be accompanied by support for jobs and businesses. We stand ready to work with the Government to ensure that that is put in place, so that no one is pushed into poverty for doing the right thing.
Bill Esterson (Sefton Central) (Lab)
SAGE warns that a circuit breaker is unavoidable. I wonder whether the Prime Minister’s words will come back to haunt him in a couple of weeks’ time as he admits that and does yet another U-turn. The best restrictions in the world will work only if people have financial security and can afford to comply. Is it not the case that offering only 67% of pay to somebody on minimum wage does not cover 100% of the bills that they have to pay? That is something that needs attention, as is the £1.3 billion underspend for all those people who, so far, have had no help in this crisis at all.
Anneliese Dodds
My hon. Friend puts his finger on it. It appears that experts are very clear that we are facing an unavoidable situation of rising infections that will not be stemmed unless action is taken. They predict that the Government will be forced into this position eventually, so why cannot we have decisiveness at this stage. Why can that nettle not be grasped now when it will be more effective, rather than leaving this unavoidable choice for many weeks into the future when it will be less effective? I will come to the other issues raised by my hon. Friend about the paucity of targeted support in a moment.
Time and again, Labour has had to drag Ministers to this House to explain what they will do to tackle the job crisis, and, time and again, those Ministers have either ducked the question entirely or come up with a short-term scheme that needs to be patched up again within weeks. The British people deserve better. To protect jobs—be that during a circuit breaker or under the Government’s new three-tier scheme—we need a functioning system of wage support, a proper safety net to prevent people falling into poverty, and economic support for local areas that goes hand in hand with the imposition of additional restrictions. Right now, we do not have any of those things.
Cherilyn Mackrory (Truro and Falmouth) (Con)
I am astounded by what the Labour party is saying today. How can the hon. Lady explain her position to my constituents in Truro and Falmouth, where the infection rate is incredibly low? The best form of support for the people working in Truro and Falmouth is for their businesses to continue as they are for as long as possible.
Anneliese Dodds
I respectfully suggest to the hon. Lady that she reads those SAGE papers. When she reads them—
Anneliese Dodds
I am very pleased and grateful that she has. She will then understand SAGE’s prediction that the infection is rising across the country, including in rural areas and coastal areas. Unless we take action and deal with that now, the problems that we are experiencing around business confidence, which are costing jobs and forcing businesses to the wall, will only continue. We need to give ourselves a fighting chance that we can approach Christmas, which is so important for businesses in this country, without the current rising levels of infection. I am concerned about the future of this economy, and I want a Government who have that long-sighted approach, rather than one who lurch from crisis to crisis.
We should have had a back-to-work Budget in July, but, instead, we got a summer statement, including a last-minute bonus scheme that will see £2.6 billion of public money handed over to firms that do not need it. In September, Labour set out three steps for a better, more secure economic future to recover jobs, retrain workers and rebuild business. Instead, after we summoned him to the House, we got the Chancellor’s winter economy plan and a wage support scheme that does not meet the core test of incentivising employers to keep staff on part-time rather than let them go. Two weeks later, the Chancellor was back trying to fix problems with that scheme, as it became rapidly apparent that the health crisis was careering away from the Government and economic support was not keeping pace. Last Friday and this Monday, we had yet more announcements, which create as many questions as the answer.
I regret that these issues were not faced up to largely yesterday during the urgent question that I brought to the House, so I will try again. This time I can ask the Chancellor directly. Why have the Government adopted such an inconsistent approach to financial support for businesses in affected areas? Leicester, Oadby and Wigston had to wait a month to get the £7.30 per head in support that they were belatedly provided with. The initial funding for Liverpool City Region, Warrington, Hartlepool and Middlesbrough was, in contrast, £3.49 a head, but not for businesses; that was for covid-related action.
Last Friday, the Chancellor rebranded £100 million of funding for local councils as surge funding, with no details of how it would be allocated and the admission that £20 million had already been spent. On Monday, the Prime Minister spoke of more funding to local authorities, but again without details of how that money would be allocated—although apparently not to support local businesses. This situation is a mess. When local leaders are crying out for certainty, they need to know that if additional restrictions are coming, there is a clear and agreed formula for how much economic support they receive and how it will be deployed.
Neil O’Brien (Harborough) (Con)
The hon. Lady mentioned Oadby and Wigston in my constituency; the Chancellor moved incredibly quickly to provide extra business support to my constituency. We had a different lockdown from that everywhere else and it worked: we have brought cases down from 160 to 25 per 100,000. That is an example of why the local approach is the right one and why her colleague the shadow Secretary of State for Health and Social Care, the hon. Member for Leicester South (Jonathan Ashworth), was right to say yesterday that what the hon. Lady is now suggesting would be disastrous.
Anneliese Dodds
I regret to say that the hon. Member, for whom I have a lot of respect, is sadly confused. It would have been useful if he had listened to the point that I just made, which was to provide contrast to the support that was provided to the Leicester area, specifically focused on businesses. I believe that negotiation occurred through the local business improvement district, the local enterprise partnership and local authorities, to ensure that that support was there for businesses—for his area, yes. Can he please intervene on me now to say which other areas of the country subject to additional restrictions have received funding specifically focused on businesses of that type? No, he cannot, because that support has not been provided to other places in the same manner as it was provided to Leicester. This lack of consistency is causing enormous problems for local authorities.
Anneliese Dodds
Perhaps the hon. Member has discovered another area; I am happy to take his intervention.
Neil O’Brien
The hon. Lady invited an intervention; I thought it would be unchivalrous not to provide one. Money was provided for my constituency because pubs had been shut. Yesterday, the Labour party voted against shutting pubs at 10 pm, but in favour of shutting down the entire economy instead. The idea that that is a proportionate response is absurd.
Anneliese Dodds
I regret that the hon. Member did not answer the question that I asked him, which was whether he knew of any other area of the country that had been treated in the same way as his constituency by being provided with business-related support. He could not answer that question; the reason why is that it appears that no other area has been. A radically different approach is being taken to different parts of the country, so local leaders and local businesses cannot plan because they do not know whether or not support will be there.
Anneliese Dodds
I will make a little progress, if my hon. Friend does not mind.
We need to find out from the Government why they have not used the £1.3 billion underspend from the grants programme, which was already allocated as business support, for local areas to direct at businesses that need that help. Yesterday, the Chief Secretary said that the money was not available for use now because, in his words, “the need” had been “met”. That beggars belief. The need clearly has not been met. The Government should reallocate that funding on a consistent basis, so that businesses in the hardest-hit areas can get support.
What possible justification can there be for local areas getting control of test, trace and isolate only once they are into tier 3 and thus facing rapidly rising infection rates? As the debate following this one will indicate, the Government have poured vast amounts of public money into private contracts to deliver a system that is simply not working. Labour-run Wales has shown how locally delivered tracing is vastly more effective than a contracted-out system. When will the Chancellor’s Government stop dithering, follow the evidence and get a grip on test, track and trace?
Chris Elmore (Ogmore) (Lab)
One of the key benefits of the Welsh system is that it allows local government to track and trace where people may have had the virus and been in contact with someone. Does my hon. Friend agree that if the UK Government could apply that to England, it could save many people’s lives?
Anneliese Dodds
I am grateful to my hon. Friend for making that point. I believe that, actually, the contact rate is radically higher—above 90%, which is very significantly different. We are in a peculiar situation where our Government appear to believe that it only makes sense for local areas to get those powers, and the resources necessary to deliver them, once infections are already at an extremely high rate—once they are in tier 3. I find this very peculiar. Perhaps the Chancellor can explain why that support is only provided once local areas are at a high infection level.
Adequate support must be provided to those at the sharpest end of this crisis—those working in businesses that have been closed for public health reasons. The expansion of the job support scheme to closed businesses acknowledges an obvious gap in the original scheme. The Government maintain that, with their changes to universal credit, the lowest-paid workers will receive up to 88% of their previous income, but that ignores the continuing problems that the Government refuse to fix with universal credit and allied areas of policy. Why have they still not uprated the local housing allowance to median market rents so that affected people can cover their housing costs? Why will they not extend the ban on evictions? Why have they retained the benefit cap, now affecting twice as many people as at the start of this crisis? Why have they not abolished the two-child limit on universal credit and tax credits? Will the Government follow the previous Labour Government and reduce the waiting period for support from the mortgage interest scheme?
The list of questions goes on and on. It includes really significant ones about firms that have not been legally required to close but whose business has been heavily impacted by the imposition of new restrictions, so they will struggle to keep staff on for even a third of their hours. For those firms, the Chancellor’s job support scheme too often fails to incentivise businesses to bring back more staff part-time, instead of keeping some full-time and letting others go.
Jonathan Gullis (Stoke-on-Trent North) (Con)
When the hon. Lady talks about Government intervention and support, will she welcome the eat out to help out scheme, which meant that ceramic tableware manufacturers in Stoke-on-Trent saw orders massively increase? Will she personally write to them to apologise for saying that she wants to shut down the hospitality sector and therefore make sure that the kilns never start up again?
Anneliese Dodds
I have been very grateful to representatives of the ceramics sector, with whom I have had a lot of dialogue. I am very concerned about their situation. I am concerned about the lack of targeted support that has been provided to maintain our manufacturing capacity. I regret that the hon. Gentleman did not listen to what not just Labour but SAGE experts had been stating clearly: this Government will end up being potentially forced into a situation where they must apply additional restrictions. Why wait until a time when restrictions will be less effective when we will have had many weeks of reduced business confidence for the very restaurants that I, too, am deeply concerned about, which will have suffered from week upon week of reduced demand? I say: take decisive action now; that is what is needed.
In key sectors, the cost of keeping on more staff on fewer hours is higher in the UK scheme than under comparable initiatives in Germany, France and the Netherlands, even when the poorly-designed job retention bonus is factored in. Businesses want to do the right thing by their staff, but the Chancellor is pushing them to flip a coin and decide who stays and who goes. When will he fix the flaws in the job support scheme?
The Government have also left yawning gaps in their offer for the self-employed. From the start of next month, the support available will fall from 70% of pre-crisis profits to just 20%. That might be an appropriate policy if we were seeing a healthy economic recovery and rising consumer demand, but that is, very sadly, not the case. We need a targeted scheme that works for those self-employed people for whom business is still nothing like back to normal. Months on from the start of the crisis and the first package of economic support, there are still too many people who have fallen through the gaps. The Government’s message to those people is just, “You’re on your own—sink or swim.” That is not good enough. So I ask again: what will the Government do to help those who have been excluded from support so far?
Several hon. Members rose—
Anneliese Dodds
I will take one last intervention. I am aware that there are many who want to speak in this debate.
Andrew Griffith (Arundel and South Downs) (Con)
The hon. Lady makes important points about the difficulties faced by so many people in the economy. Will she explain how they will be helped by closing down the entire economy? It is the madhouse of fixing the windows or knocking the whole house down.
Anneliese Dodds
Unfortunately, the hon. Gentleman does not appear to be aware that the windows are already broken and that, in a quarter of this country, we see those businesses having been subject to additional restrictions. None of them has moved out of that, aside from in Luton, which appears, sadly, to be in a difficult situation again now.
We see the Government’s own expert advisers saying that they are likely to be forced into a position where additional restrictions have to be applied in the future, when they will be less effective, because by that point infection will have been spread further across this country. So the question is whether action is taken decisively when it can be most effective or whether we push this back, the costs increase, business confidence continues to erode, people continue to lose their jobs and businesses continue to go to the wall. That is the question this Government need to answer.
If we are to avoid the bleakest of winters, this Government have to get a grip. We need a national reset. For that to work, we need an economic package that acknowledges reality and gets ahead of the problems we face; a wage support scheme that works properly; a safety net worthy of the name; and financial support that goes hand in hand with the imposition of extra restrictions.
Anneliese Dodds
I will not, because so many Members want to come in on this debate.
We brought this motion to the House today because the Government have not been doing what it takes to support areas under additional local restrictions. Currently, those are in the north of England and parts of the midlands, Scotland, Wales and Northern Ireland, and Members representing those areas know that that is the case. So I appeal to them to put their constituents’ jobs and livelihoods first, and support this Opposition motion. [Interruption.]
Mr Speaker
Order. The hon. Members for Wallasey (Ms Eagle) and for Stoke-on-Trent North (Jonathan Gullis) can both be quiet. I want to get on with the business, and I do not want one person to start to entice others. Let us see whether we can make some progress. Let us have a good, well-mannered debate, as that might be helpful to this House.
The Chancellor of the Exchequer (Rishi Sunak)
I beg to move an amendment, to leave out from “House” to end and add:
“welcomes the Government’s package of support worth over £200 billion to help protect jobs and businesses through the coronavirus pandemic, including the eight-month long Coronavirus Job Retention Scheme, Self-Employment Income Support Scheme, £1,000 Job Retention Bonus, unprecedented loan schemes, business grants and tax cuts; further welcomes the pledge to protect, create and support jobs through measures in the £30 billion Plan for Jobs such as Eat Out to Help Out, VAT and stamp duty cuts and the £2 billion Kickstart Scheme; acknowledges the further support for jobs with increased cash grants and the expanded Job Support Scheme to support those businesses legally required to close due to national or local lockdowns; and further acknowledges that this is one of the most comprehensive and generous packages of support anywhere in the world.”
I very much welcome the opportunity to update Parliament and the country on the economic challenges we face and our plan to tackle them. My message to hon. Members in all parts of the House is simply this: we must not shy away from the burden of responsibility to take decisions and to lead. We must do this with honesty and co-operation. We cannot allow the virus to take hold. We must prevent the strain on our NHS from becoming unbearable, but we must also acknowledge the stark reality of the economic and social impacts of another national lockdown. The costs of doing that are not abstract—they are real: they can be counted in jobs lost, businesses closed and children’s educations harmed; they can be measured in the permanent damage done to our economy, which will undermine our long-term ability to fund our NHS and our valued public services; and they can be measured in the increase in long-term health conditions that unemployment causes.
This is not about choosing one side or the other. It is not about taking decisions because they are popular. It is not about health versus wealth, or any other simplistic lens we choose to view this moment through. The Prime Minister was absolutely right when he set out our desire for a balanced approach, taking the difficult decisions to save lives and keep the R rate down, while doing everything in our power to protect the jobs and livelihoods of the British people. The evidence shows that a regional tiered approach is right, because it prevents rushing to another lockdown the entire country would suffer rather than targeting that support and preventing a lockdown in parts of the country where the virus rates are low.
This is an imperfect solution. We have been consistently honest about the difficulties and hard choices that this moment presents. We have heard a lot about the SAGE advice. The SAGE minutes themselves say that Ministers must consider the
“associated costs in terms of health and wellbeing”
and the economic impacts alongside any epidemiological assessment. It seems like the only people not prepared to confront that reality are in the Labour party, which is surprising given that just days ago the shadow Health Secretary said a new national lockdown would be “disastrous” for society and
“would cause unimaginable damage to our economy and…wellbeing.”
Mr Perkins
The Chancellor’s response would have more credibility if he was not stood there following month after month of failure by a Government whose testing and tracing regime—whose entire approach—got us to this point in the first place. We all recognise how expensive this is going to be, but it has happened because of the failure that he and his party have facilitated.
Rishi Sunak
The debate following this will address test and trace. It is worth bearing in mind that more than £12 billion has been invested in our test and trace capacity. Testing capacity has increased from simply 10,000 a day at the start of this crisis to close to 300,000 today, on its way up to half a million, and ours now ranks as one of the most comprehensive testing regimes anywhere in Europe.
Andrew Griffith
Does my right hon. Friend agree that, faced with a choice between a national blunt instrument that would wreak enormous economic damage, and something that is more finely calibrated region by region based on the science, there is no choice to make?
Rishi Sunak
My hon. Friend is absolutely right: it is a blunt instrument. It would cause needless damage to parts of our country where virus rates are low.
Several hon. Members rose—
Rishi Sunak
Having spent weeks indulging themselves with political attacks on this Government’s efforts to protect jobs, Labour have now flipped and support a blunt national lockdown. They will not say how much damage that will do to jobs or livelihoods, they will not say how they plan to support businesses through it, and they do not seem to care about the long-term stability of the public finances. If they did—[Interruption.]
Mr Speaker
Order. I am sorry, Chancellor. Please, I cannot hear the Chancellor. I want to hear him, and I am sure people outside the House want to hear him, so please, if he is going to give way—the Chancellor is a generous man—he will give way. In the meantime, I do not need people shouting.
Rishi Sunak
Thank you, Mr Speaker. If they did care, we would hear from the shadow Chancellor how many jobs Labour’s lockdown would cost.
Alex Cunningham (Stockton North) (Lab)
I am grateful to the generous Chancellor for giving way. Today, the North East Child Poverty Commission said that 35% of children in the north-east region are living in poverty. As a direct result of Conservative policies, we are going to see that number increase. What is he going to do about those children?
Rishi Sunak
The most vulnerable have been at the forefront of our mind throughout this crisis, which is why it is clear from the distributional impact of our interventions, which was published over the summer, that they have benefited those on the lowest incomes the most. It is there in black and white: a Conservative Government making sure the most vulnerable are protected through this crisis.
Any responsible party of government would acknowledge the economic cost of a blunt national lockdown. The Labour party may say it has a plan, but be under no illusion: a plan blind to the hard choices we face—a plan blind to and detached from reality—is no plan at all.
Ms Angela Eagle
In the Liverpool city region, which contains my constituency of Wallasey, there is £40 million of unspent support for business that the Chancellor generously granted in the first wave of the pandemic. Given that we are in tier 3, will he say today at the Dispatch Box that he will release that £40 million so that the local authorities in the Liverpool city region can apply that money to help their local businesses during this highest level of lockdown that we are suffering at the moment?
Rishi Sunak
I know what a difficult time this is for the hon. Lady and her constituents. With regard to underspends—I will come on to this later—I think it is wrong to think of them in that way. That was the Government giving an advance to local authorities to make payments to businesses. That was done on the basis that every local authority will have a wildly different degree of overspend or underspend, which we true up at the end of the process. We could equally have asked local authorities to make payments themselves and reimbursed them afterwards. There is significant financial support both for her local authority and the businesses in her area that have closed down. That was announced by the Prime Minister and I will come on to address that in detail later. It is right that that support is there.
Let me reiterate our plan. The House will be well aware of the gravity of our economic situation. The latest figures show that our economy grew by 6% in July and 2% in August, but it remains almost 10% smaller than it was before coronavirus hit. Business investment suffered a record fall in the second quarter of this year. Consumer sentiment remains well below its long-run average. Despite the significant support we have provided, the data is beginning to reveal the true extent of the damage that coronavirus has caused our labour market. The latest statistics published just yesterday show employment falling, unemployment rising and welfare claims rising. The revisions that the Office for National Statistics has made to its previous estimates show that unemployment was higher than it thought over the summer.
I have talked about facing up to the difficult truths clearly, and we are facing an economic emergency, but we are acting on a scale commensurate with this emergency as we address my single biggest priority: to protect people’s jobs and their livelihoods. We have put in place a comprehensive plan to protect, support and create jobs in every region and nation of the United Kingdom. Through more than £200 billion of support since March, we are: protecting more than 9.5 million jobs through the job retention schemes; strengthening our welfare safety net with an extra £9 billion for the lowest paid and most vulnerable; granting more than £13.5 billion to those who are self-employed, with further grants to come; and protecting over 1 million small and medium-sized businesses through £100 billion of tax cuts, tax deferrals, direct grants and Government-backed loans.
Kevin Hollinrake
Does my right hon. Friend agree that the best way to protect jobs is to keep the economy open wherever possible? Most other nations are using a local-restrictions approach to deal with this situation, including Germany, which is using lockdowns at a district level, not even at a state or county level. Does he agree that that is the best way forward?
Rishi Sunak
My hon. Friend is absolutely right. The only sustainable way to protect jobs in the long run is to have an economy that is open and functioning. No amount of support can make up for that.
There are other things we have done: eased repayment terms on those loans through pay as you grow; delivered on our promise to give the NHS what it needs; backed hundreds of thousands of young people to find good jobs through the kickstart scheme and new investment in training and apprenticeships; created green jobs through the £2 billion green grant programme; showed that we are here for our cultural sector, with the cultural recovery fund and a further support package for charities; and invested hundreds of billions of pounds in the largest, most sustained programme of infrastructure investment the UK has seen in decades. That is comprehensive action to protect the jobs and livelihoods of the British people. It undermines the credibility of the Labour party that, in the face of all that support, it continues to pretend that insufficient action is being taken.
Rishi Sunak
I will make some progress.
As the crisis evolves, our economic response will also evolve. What we will see over the winter is a complex picture of some businesses able to open safely and others being ordered to close to control the spread of the virus. Our winter economy plan provides a toolkit to protect jobs and businesses over the difficult weeks and months to come. The plan has three parts.
First, the job support scheme will protect jobs in businesses that are open or closed. If businesses can open safely, but with reduced or uncertain demand, the Government will directly subsidise people’s wages over the winter, giving those employers the option to bring people back to work on shorter hours rather than making them redundant. We are expanding the job support scheme to give more support to businesses that are ordered to close. For people unable to work for one week or more, their employer will still be able to pay them two thirds of their normal salary and the UK Government will cover the cost. This national programme will benefit people the same wherever they live and whatever job they do.
Mr Perkins
There seems to be a basic dishonesty at the heart of these tier 2 plans. There is no support for pubs. They are being told that they are allowed to stay open, but the measures being brought in are making them unviable. At least with our approach what we would see is a short-term hit, but then a reduction in the rate and more of a chance for us to return to normality. Will he at least admit that those pubs in tier 2 areas are not going to have viable businesses and say something about what he will do to support them?
Rishi Sunak
I am glad that there has finally been some acknowledgment that there will be a hit to businesses and jobs from what the Labour party is suggesting. It is right that there is support provided for hospitality, which is why the Government have provided a VAT reduction, a business rates holiday, direct cash grants, eat out to help out and now the job support scheme that is directly there to support those businesses that are open and operating but not at the same levels that they were previously. To give those businesses and their employees certainty, rather than the weeks that I heard about from the hon. Member for Oxford East, this scheme will run for six months through to the spring. This job support scheme is in line with those in most other European countries and, to support the lowest paid through this crisis, we have made our welfare system more generous and responsive too.
Rachael Maskell
The Chancellor will know from York’s economic base and the complexity of our economy that unemployment may rise to 27% in our city. What additional measures will he put in place to build the bridge to get us through this really difficult period? The job support scheme will just not deliver for my constituents.
Rishi Sunak
The job support scheme was widely welcomed not just by businesses groups such as the CBI and the Federation of Small Businesses but by the TUC, which I was happy to work closely with to design the scheme. However, she is right. That is not the only thing that we will do to support jobs, which is why we have put in place the £2 billion kickstart scheme to provide fully funded job placements for those young people most affected by this crisis and most at risk of unemployment. Thousands of those young kickstarters will be starting their new jobs this autumn.
Miriam Cates (Penistone and Stocksbridge) (Con)
Does my right hon. Friend agree that, while we all want simple solutions to this crisis—whether that is the Opposition suggesting full lockdown or an unlimited extension to furlough—there are no simple solutions. This is a highly complex problem. Every intervention and every support scheme will be nuanced and will have to be regionally effective There are no simple solutions. We should not be looking for simple solutions; we should be looking for the right ones.
Rishi Sunak
As ever, my hon. Friend is spot on. It is not leadership to shy away from the hard choices and real trade-offs that these decisions take. She is absolutely right.
The second part of our winter plan is to support businesses that are legally required to close, and we heard about that previously. Those businesses will now be able to claim a cash grant of up to £3,000 per month depending on the value of their property. Those grants can be used for any business cost and will not need to be repaid. I have also guaranteed £1.3 billion of funding for the Scottish, Welsh and Northern Ireland Administrations so that they can choose to do something similar. The hon. Member for Oxford East asked whether other areas had received that support, and was under the impression that none other had. I can correct the facts. Bolton is the only other area that has faced hospitality restrictions in that way and Bolton Council has received, at the last count, I believe almost £200,000 of support to compensate its businesses because they have been closed in a similar way.
Anneliese Dodds
I fear that the Chancellor is confused. I was not talking about the much-trumpeted local restriction support grant. He is right; it has been applied so far only to that one area of Bolton. I was talking about the business support that was delivered to Leicester, Oadby and Wigston, which I believe has not been provided to any other part of the country.
Rishi Sunak
It is the same type of support—support provided to the local authority to help their businesses. That was the question the hon. Lady asked my hon. Friend the Member for Harborough (Neil O’Brien), and I am happy to answer it.
The third part of our plan is to provide additional funding for local authorities. Again, I am happy to correct what may be a misunderstanding of the situation for the hon. Member for Oxford East. It is not the case that that support is only for local authorities in tier 3. There is a scaled structure. All local authorities placed into different tiers will receive extra financial support on a per capita basis, using the funding formula that my right hon. Friend the Chief Secretary is implementing. That funding will be worth up to almost half a billion pounds on a national basis, to support local areas and their public health teams with their local response, whether that is more enforcement, compliance or contact tracing. That comes on top of the almost £1 billion announced by my right hon. Friend the Prime Minister that we will provide to all local authorities, as we talk to them about their needs over this difficult period, to ensure that they can provide the services they need to. That also comes on top of the £3.7 billion already provided to local authorities.
This Government are dealing with the world as it is. While the hon. Member for Oxford East may not wish to confront that reality, I do not have that luxury. We cannot just let the virus take hold, but nor can we blithely fall into another national spring-style lockdown, as the Labour party wants to, rather than following our regional, tiered and localised approach. We are dealing with a once-in-a-century event, and I can assure Members on both sides of the House that the Government are doing all they can to support the country through this crisis.
We need a balanced approach, we need a consistent approach, and—as you will have seen, Mr Speaker—we also want a co-operative approach. But any responsible party calling for a shutdown of our entire country should be honest about the potential economic and social costs of such a dramatic measure. At the very least, they should have the integrity to acknowledge that what they are proposing will cause significant damage to people’s lives and livelihoods. I have never said that there are easy choices or cost-free answers. This is the reality we face, and it would be dishonest to ignore that truth. So no more political games and cheap shots from the sidelines. The Labour party can either be part of this solution or part of the problem. It is called leadership, but from them, I am not holding my breath.
Mr Speaker
There will be a four-minute limit on speeches after the SNP spokesperson. I call David Linden.
David Linden (Glasgow East) (SNP)
Recently the Government have quite rightly given stark and serious warnings of a second wave of coronavirus cases, with the numbers in hospitals increasing, the infection rate rising and further restrictions being put in place across the UK. While my SNP colleagues and I welcome what the Chancellor of the Exchequer has said recently, it is clear that he and his Government are not acting with the urgency that the situation deserves. Quite simply, the plans that he has set in place do not go far enough.
I have had countless constituents get in touch over recent weeks who are concerned about potential job losses and financial insecurity, with many wondering how they will get through the tough winter months ahead. The SNP has consistently warned the Chancellor that his economic plans, as they stand, are inadequate. We have repeatedly called for support for the industries suffering most during the pandemic, for an extension of the furlough scheme and for the increase in universal credit to be made permanent, but those calls have, I am afraid, fallen on deaf ears. It is my hope today that the Government will listen to what needs to be done, especially considering the recent serious warnings about the devastating impact of the second wave in which we find ourselves.
The SNP welcomed the Chancellor’s announcement that further support will be given to businesses being forced to close in new local lockdowns. However, that scheme, like the other financial packages that the Chancellor has announced, does not go far enough. From 1 November, the Government will pay two thirds of each employee’s salary for businesses forced to close in new local lockdowns, but that does not apply to workers whose employers cannot afford wages due to poor trading conditions, rather than any new Government lockdowns. For them, from 1 November, the furlough will be replaced by the new job recovery scheme, whereby the Government will pick up a maximum of just 22% of pay. To be eligible for the job recovery scheme, a company must pay an employee to work at least a third of the contracted time, and the remaining wages are split into three. The UK Government and the company pay a third each and the worker loses the rest. That is, I am afraid, completely absurd. Most people simply cannot afford to lose a third of their salary. They do not get a third off their rent, a third off their fuel and a third off their shopping when they go to Tesco.
I turn to the issue of hospitality. Yesterday, James Watt, the owner of BrewDog, had a conversation with Scotland’s First Minister, Nicola Sturgeon, to discuss supporting jobs in the hospitality sector, which is a massive priority for us. He was very clear in his agreement with the First Minister that the end of the job retention scheme will lead to a “a tsunami of unemployment”. He continues to urge the Chancellor to extend the scheme, stating:
“The proposed ‘Job Support Scheme’ will not protect jobs.”
This is not me, as an SNP MP, saying to the Chancellor that this is inadequate. This is somebody who is highly respected in the hospitality sector, and the Chancellor would do well to listen to him and not fiddle on his phone.
Anthony Mangnall (Totnes) (Con)
It is surprising to hear the hon. Member talk about the need to support tourism and hospitality sector when the SNP is putting forward rather puritanical bans on alcohol sales, no longer helping pubs and no longer helping the businesses in that sector. How can he lecture the Government on what form of support they should be giving after everything that they have done on the 15% cut?
David Linden
That was a wonderful addition to try to be a nice Parliamentary Private Secretary, but I am afraid that the hon. Gentleman clearly has absolutely no idea about the £40 million package put forward by the Scottish Government for the hospitality sector. Perhaps when he is sitting on the south coast of England dreaming up these lovely interventions to please his Whips, he would do well to read the full briefing paper.
The leaders of businesses across the UK agree that ending the furlough and job retention scheme is a very irresponsible and reckless decision, so to avoid mass redundancies, the UK Government must extend the furlough scheme in full. With the huge rise in covid-19 that we have seen so far with the second wave, and with the winter months approaching, now is not the time to be taking chances on job losses.
Mr Perkins
The hon. Member is absolutely right about the appalling health and economic consequences of this. Do he and his party support the advice from SAGE for a two-week circuit-breaker so that we can get on top of this health crisis and try to give the Government time to get test and trace to work? Does he support what the Labour party has called for?
David Linden
One of the things that we are seeing in Scotland is that test and trace is working a lot better, and that is because we have not hived it off to, for example, Serco. We have been very clear that we will follow the scientific advice and we will do our very best to get that balance. That is what we have seen with the restrictions that came into place last week in Scotland. We will see how that goes. We are always keeping things under review, but the reality is that we need to follow the advice and get a balanced approach. That is exactly what we are doing, and I am sure that we will see that bearing fruit.
I turn to the issue of the excluded 3 million. The SNP has consistently and continually raised the 3 million who were excluded from the Chancellor’s initial financial support packages back in the spring. Let us be clear that the Treasury continues, I am afraid, to exclude artists, freelancers and the newly self-employed from these recent economic plans. Three million people were shut out of the vital financial support that they desperately needed during the first wave of the pandemic and they were left to face huge financial insecurity, with their livelihoods and businesses put at risk. Rather than listening to the calls of these 3 million people, the Chancellor has decided to leave behind the self-employed yet again in his economic plans, with a 70% replacement of profits being replaced in November with just 20%.
Another group that has repeatedly been excluded from the Chancellor’s financial packages has been the arts and culture sector. We saw this week the closure of all Cineworld theatres across the UK, including the one in my constituency in Parkhead. I again call on him to provide sector-specific support for the arts and culture sector, which we know will continue to suffer during the second wave of the pandemic. [Interruption.] I hear the hon. Member for South Suffolk (James Cartlidge) chuntering away that the Chancellor has just done that, but many people in our constituencies in the arts and culture sector make it clear to us that that support does not go far enough. If the Chancellor has done that, why is Cineworld in Parkhead closing?
I have described thus far a very tough image of countless jobs being at risk. Many sectors are vulnerable and some businesses are wondering if they will make it to the new year, but the rising cases should emphasise to the House that we are still in the midst of this pandemic, which has already delivered severe blows to people’s incomes and financial security, with the most vulnerable people facing a disproportionate economic hit. That is why the SNP has repeatedly called upon the Government to make the £20 increase to universal credit permanent, especially after the latest findings from the Institute for Fiscal Studies, warning that 4 million families could see their support slashed if the Tory Government refuses to make that £20 uplift permanent.
The Joseph Rowntree Foundation has highlighted that nearly three quarters of a million more people, including 300,000 children, could be forced into poverty if the uplift is not made permanent. That must serve as a wake-up call for the Government. The Chancellor cannot continue to turn a blind eye to the vast inequality that exists right across the UK. With the winter months approaching, the poorest and most vulnerable people will suffer the most from the Chancellor’s economic plans, and it is quite clear that he has a choice in front of him and that he needs to do much better by them.
Patrick Grady (Glasgow North) (SNP)
Is that not exactly right? One way or the other, the Government are going to have to pay for this. They are going to have to meet the costs, and they can either do that by extending job support schemes by looking at really imaginative, creative, long-term support such as universal incomes, or through universal credit and all the social consequences that come from long-term unemployment and taking us back to the Thatcherite 1980s.
David Linden
I agree with my hon. Friend, but I have to say that I did give the UK Government a degree of praise at the beginning of the pandemic, because it did seem that they were moving in a way that perhaps was not part of traditional Tory ideology, with a lot more state intervention and a lot more Government support. I think there were quite a few of us in this House who, while we would disagree enormously on the politics, welcomed the fact that the Chancellor was willing to be innovative and try new things.
One thing I would say is that nobody prepares us for a global pandemic. Politicians and people in this House have seen recessions and people have seen wars, but nobody prepares us for a pandemic. Yes, there has to be a degree of flexibility on the part of all of us in this House, but the thing I am most concerned about is that the British Government seem to have moved away from those creative, innovative solutions they had at the beginning of the year. We now find ourselves in the midst of a second wave, and all of a sudden that dynamism and creativity the Chancellor has been credited with seems to have gone away, because of the pressure that comes from people on the 1922 committee. I do not think that people on the whole are going to forgive that.
Kevin Hollinrake
Does the hon. Member agree with the Opposition that there should be multiple circuit breakers, and if so, is that what the policy will be in Scotland?
David Linden
I am not sure that the official Opposition are proposing multiple circuit breaks, to be fair to them, but it is not my job to defend the policy of the Labour party. However, what I will defend is the approach of the SNP Scottish Government, who are trying to do this in a balanced way, but we would like to see a lot more financial flexibility to do that. It would help if the UK Government gave us those financial powers. That is what I would say to the hon. Gentleman on that.
I want to come on to that very point, and highlight the work that the Scottish Government have done in supporting business during the second wave of the pandemic. The Scottish Government’s total package for businesses is over £2.3 billion. That is more than the consequentials received from the UK Government. As I mentioned to the hon. Member for Totnes (Anthony Mangnall), the Scottish Government are making an additional £40 million available to support businesses that will be affected by the new measures, and will work with affected sectors in the coming days. I am in no doubt of that. My city of Glasgow is one of those that have been under local lockdown restrictions, and the restaurants and bars in my constituency have had to shut down, but we have recognised when we have asked them to shut down, which is a way of trying to reduce the spread of the virus, that support must be coming.
The Scottish Government will continue to discuss with businesses how the support package we have offered can mitigate some or all of the employer’s contribution to the UK job retention scheme. We have put in place a £230 million “restart the economy” capital stimulus package to help stimulate the economy following the pandemic. We have announced details of a £38 million package of support for innovative early stage businesses. We have committed £2.2 million of funding to the Music Venue Trust, which will provide stability to grassroots music venues over the coming months.
What all this should highlight is that the UK Government’s financial plans have been and continue to be inadequate—excluding the self-employed, freelancers and artists; prematurely ending the furlough scheme; and refusing to make permanent the £20 increase in universal credit. Where we have had the power, the Scottish Government have spent £6.5 billion on tackling covid—above the Barnett consequentials—and they are doing all they can and all within their powers to support businesses across Scotland.
That is the issue at hand. There is only so much that the Scottish Government can do when the vast majority of Scotland’s tax and spending decisions are taken here in Westminster. The fact is that the Government cancelling the UK Budget simply demonstrates that Scotland remains an afterthought for the Tories. I would be more than happy to give way to the Chancellor if he can stand up and give some sort of clarity to Scotland’s Cabinet Secretary for Finance about what budget we are supposed to set when the Government have just gone ahead in this way.
Rishi Sunak
I have addressed this previously, in this place and others. There is absolutely no bar on the Scottish Government setting a Budget in advance of the UK Budget. The fiscal framework itself allows for that very possibility. That is exactly what happened at the start of this year, so there is simply no reason why that cannot happen. The OBR forecasts were provided as normal this autumn. Those forecasts are used by officials to make all the necessary calculations. It is simply wrong to suggest that the Scottish Government are unable to set a Budget until the UK Government have.
David Linden
Conservative Governments used to be really good on upholding the rule of law, and Conservative Governments used to be really good when it came to managing the economy, but we now have a Chancellor who appears to want the Scottish Government to set a completely blind Budget. For somebody who tries to advocate the idea of fiscal responsibility, that strikes me as rather bizarre.
People in Scotland are increasingly aware that the only way to move forward in terms of protecting our economy, managing our own finances and standing on our own two feet is with the powers of independence. With the United Kingdom Internal Market Bill destroying their hard-fought devolution, more and more Scots are supporting the SNP in calling for independence.
An Ipsos MORI poll revealed yesterday that 65% of people in Scotland think Britain is heading in the “wrong direction” compared with just 12% who think Britain is heading in the “right direction”. If we want to continue looking at polling, and I know the UK Government are doing quite a lot of polling on this issue at the moment—they are being a bit coy about releasing it—Ipsos MORI released a poll today showing that 58% of Scots now support Scottish independence.
I suggest to the Chancellor of the Exchequer that that backs up the point that people in Scotland can see this UK Government are not doing enough, and therefore they want to see these powers being transferred to Scotland so we can take our own decisions on these issues.
Stewart Hosie (Dundee East) (SNP)
Does my hon. Friend not think the Chancellor’s intervention was rather peculiar? The Chancellor is, of course, absolutely right that the Scottish Government can set a Budget, notwithstanding that it would be blind, but, depending on the Chancellor’s decisions, it may lead to subsequent in-year cuts or in-year changes. I am sure this Chancellor would not tolerate it if someone else was setting part of his Budget.
David Linden
I thank my hon. Friend for putting that on the record.
I do not want to detain the House too much. In conclusion, SNP MPs have stood up in this Chamber and made calls for the UK Government to do the right thing and support the public through the second wave of covid-19 cases. What they have put on the table so far does not go far enough, and that is why we will vote for the motion before the House tonight. I am grateful for the House’s forbearance.
Mike Wood (Dudley South) (Con)
Hospitality is one of Britain’s biggest employers. Some 3.2 million people across the country rely on hospitality for their jobs, including 4,300 of my constituents in Dudley South. My right hon. Friend the Chancellor has always been a real and true friend of the beer and pubs sectors, in particular. He knows how much they have been affected by this pandemic, and he has delivered a comprehensive and unprecedented economic support package. Without such a support package, many thousands of pubs and breweries would simply not have survived the spring. They would not have got through the first phase of this outbreak.
I do not know whether the Chancellor has seen his rather fetching likeness on posters in pubs up and down the country, recognising the contribution that many of those support measures have made to making our pubs and other hospitality viable over the past six months but, as we are now firmly in a new phase of the pandemic, new measures are vital for those businesses that are not necessarily legally compelled to close. For those that are required to close their doors, the grant he has announced, although it may not cover the whole rent and all the fixed costs, will make a substantial contribution to the costs those businesses incur even before they pull a single pint or serve a single meal. However, there are also enormous challenges facing venues that are not legally compelled to close, those in tiers 1 and 2, where the legal restrictions that have been introduced make it impossible for them to operate. We know that one in 10 pubs has never reopened since March’s lockdown, and about two thirds of those that did reopen were already trading at a loss last month. That was before the introduction of 10 o’clock closing, mandatory table service, and of course the new restrictions that have come into effect today.
Alex Cunningham
Simon Longbottom of Stonegate, one of the largest pub groups in the country, has written to me about this, and he could have been making the speech that the hon. Gentleman is making now. He is very concerned that in tiers 1 and 2, he gets no help with his business costs whatsoever. Can the hon. Gentleman give the Chancellor some direct advice on what he needs to do about that?
Mike Wood
I would not presume to attempt to direct my right hon. Friend the Chancellor, beyond saying that pubs and hospitality cannot, of course, continue to operate with almost no income and without additional support that is proportionate to the legal restrictions they face. Those restrictions may not be in their immediate area. I have heard today from Titanic Brewery, a brewery in Stoke. The majority of its customers are in Liverpool and Merseyside, which are tier 3 areas, but that brewery will not receive support even though that is where its customers are based. These pubs need urgent additional support; otherwise, many of them are going to close their doors for good and never reopen, which would be a huge loss to not only our economy, but our communities.
Maria Eagle (Garston and Halewood) (Lab)
I rise very much to support the motion that my hon. Friend the Member for Oxford East (Anneliese Dodds) has moved, particularly the part that says
“this House believes the Government should do what it takes to support areas with additional local restrictions”.
My own constituency is in the Liverpool city region, which is under tier 3 restrictions. The Chancellor might not know the unemployment figures for my particular constituency, but I can tell him that probably not unlike many other places, they have doubled this year. That is about 5,000 people.
I also have 15,000 people still on furlough in my constituency. I understand that when the Chancellor introduced the national furlough scheme, he wanted it to have an end point, but surely he anticipated that it would be ending when the pandemic was waning. In Liverpool, the pandemic is surging. We have no intensive care unit beds in Liverpool’s main hospitals: they are now full, and covid is impacting on other critical care, so the health service in Liverpool is already being impacted severely. Furlough is going to end in two weeks, and those 15,000 jobs are severely at risk, right in the middle of a huge resurgence in the virus.
The Chancellor has introduced his local furlough—that is the colloquial term—for those businesses that are forced by law to close, such as pubs, gyms, and other such businesses. I think it is wrong that those people who benefit from that, especially if they are on the minimum wage, should only get 67% of it. The Prime Minister said today that the figure was 93%, but they should get 100% of the national minimum wage. There should be a floor—let us be clear about that—and I hope the Government can do something about that. One does not have to pay 67% of the bills when furloughed, and food does not cost only 67% of what it normally does, so something needs to be done to help those people.
However, the Chancellor should also be very clear that there are many other businesses in my area, such as restaurants, that have not been forced to close but whose business is severely impacted. They have to close at 10 o’clock, and they have fewer tables. In my area, there is advice against non-essential travel. It is not essential travel to go to a restaurant, so people are advised not to go there, but these businesses are not going to get any support to keep their restaurants open through the local furlough scheme, and many of them will go bust.
Maria Eagle
I am afraid I cannot give way, because I have only four minutes and some points to make. I apologise to the hon. Gentleman. The point is that many businesses and many thousands of jobs are at risk. They will not be getting extra support—I am sorry that the Chancellor is not listening—from any of his schemes in a tier 3 area. Those jobs and businesses are going to go. Those people will be unemployed and the Government will still have to pay towards their support.
May I also make the point in the short time I have left that 77,000 people in the Liverpool city region have been excluded as self-employed people from any Government support? They are barely hanging on and now with tier 3 restrictions yet again there is no support for these people or these businesses. What is happening will turn this pandemic, by the time Liverpool comes through it—and we will—into a cause of severe poverty and penury. It is not right that the Government are not doing enough to help.
Gareth Davies (Grantham and Stamford) (Con)
It is a great pleasure to speak in this debate. It is right that we have this debate and that across the House we talk about our national economy. It also gives me a great opportunity to thank the Chancellor on behalf of thousands of Grantham and Stamford constituents for the colossal support we have received. Some 16,000 of my constituents were furloughed, 99 of my large businesses received coronavirus business interruption loans worth £33 million and 1,527 small businesses received bounce back loans worth £44 million. We had £23 million of grants and, just last week, we received £230,000 of cultural funding, so I thank the Chancellor on behalf of literally thousands of my constituents.
There was a £200 billion package of support, which was unprecedented and globally competitive, and we must be mindful of our public finances. In the first five months of this tax year, our tax receipts were down 35%. At the same time, our debt-to-GDP ratio is the highest since 1963. That is a potent combination, which must be a sobering fact for everybody across this House, regardless of party politics. Therefore, it is right that we have a job support scheme that targets support to those who are facing depressed demand.
I encourage the Chancellor to continue with his £30 billion plan for jobs that will see the creation of green jobs through the green homes grant and new jobs for young people through the kickstart scheme. I encourage him to double-down and continue with that package of support.
I also encourage the Chancellor to focus on economic growth. That is what ultimately will benefit all of our country. There are three aspects to that for me. The first is to release businesses from the burdens they have had for so many years. We saw the success of the Chancellor’s policy to reduce VAT on hospitality businesses. We saw how well received the VAT tax deferrals were by the CBI. I encourage the Chancellor to look at regulations to ensure that we manage our national regulatory budget to ensure that any new regulation meets robust cost-benefit analyses.
The second thing I highlight is the mobilisation of private investment capital. The future fund—it is not spoken about in this place enough—is one of the truly innovative policies of this Chancellor and this Government. It directly intervened and supported pre-revenue, pre-profit businesses. We are the start-up capital of Europe, and this Chancellor and this Government supported those start-up entrepreneurs. The key aspect of that policy was the fact that it mobilised private capital. We shared the risk with private finance. They brought efficiency to those investments, and I again urge the Chancellor to look at initiatives such as a British development bank, which would help mobilise more private capital for infrastructure investments in the future.
Finally, the issue of productivity has been pervasive throughout the decades. Whichever Government are in power, productivity has been weak compared with our international competitors. Infrastructure investment is critical to this, but so, too, are skills. I warmly welcome the Prime Minister’s efforts and his announcement around the lifetime skills guarantee. This will help constituents such as mine in Grantham, Stamford and Bourne and in all our villages to get the skills they need for the jobs of the future. I warmly applaud the efforts of this Government to date, and I thank you, Madam Deputy Speaker, for the opportunity to lay that out.
Alison McGovern (Wirral South) (Lab)
I am grateful for the opportunity to contribute to this debate in what has been a horrendous week for all in Merseyside. I would like to pass my thanks, through the Chancellor before he leaves the Chamber, to the Chief Secretary of the Treasury for agreeing to meet Merseyside Members of Parliament on the 20th of this month. Just as the Chancellor walked out of the Chamber now, it has felt to us in Merseyside that it has just been too difficult to get the attention of the Treasury during what has been the most extraordinarily challenging week. I ask the Economic Secretary to the Treasury to flag up to all his colleagues inside the Treasury how very difficult this situation is for us. We have uniquely been placed in the top tier of restrictions, and that surely demands a unique level of attention and a unique set of interventions to ensure that our economy does not go under. I know that the Minister will take those comments very seriously.
I want to take the short time that I have to make a couple of comments about Merseyside, but before I do so I just want to thank all those businesses in my constituency that have been in touch with me. I have had sobering conversations with the management of the Thornton Hall Hotel, and with James, who runs the Rose And Crown pub in Bebington. They have made it absolutely clear to me what the consequences are of this situation. They have done everything that could possibly have been asked of them. This situation is not of their making, and I hope that it is a cross-party endeavour in this House to back our hospitality industry. That is particularly important for the Liverpool City region. We have spent 20 years working to ensure that our visitor economy replaced much of what was lost in de-industrialisation.
Now, Madam Deputy Speaker, if you had said to me when I was a child that, one day, people would come for a mini-break to Merseyside, I would have laughed. Most people in the country—well, they did not think that much of us. All that work could go down the drain if we are not careful, so I say to the Minister: “Don’t do it. Help us.” I urge him to make sure that this place of opportunity, with these young and growing businesses, has the chance of an economic future that says to anywhere in our nation: “It does not matter how far down or out you are, Britain offers you hope.” There is a way to do that. Although our businesses are young and they do not have huge cash reserves, they are incredibly creative and, crucially, fast growing. If the Treasury wants to see growth, I heartily recommend it backing the creative, cultural and visitor economies such as Merseyside.
Alison McGovern
The Minister is nodding, and I thank him for it.
We really need that practical support now, so, if the Minister is prepared to work with us to help Merseyside—I know that I speak for the shadow Chancellor here as well—we will be there. We never want to go back to the dark days. I simply ask everyone in this House to work together to help.
Neil O’Brien (Harborough) (Con)
It is a pleasure to follow such a good and impassioned speech.
Let me start with two important bits of context. The first is that this country and this Government are providing much more support to the economy and to preserve jobs and livelihoods than comparable countries. According to a report by the Institute for Fiscal Studies earlier this week, while France, Germany and the US are spending about 7% of GDP to support jobs, the UK is spending about 12% of GDP, so it is a much more powerful intervention to help people and preserve livelihoods. That is quite right, because, of course, we want to avoid the scarring effects of unemployment and to keep businesses that are viable together.
The second bit of context leads on from that, which is that, according to the IFS, we will borrow £350 billion this year, or 17% of GDP. It is the case not only that we have never borrowed so much before in our entire peacetime history, but that it is more than we have often borrowed in wartime—more than we borrowed in the first year of the second world war. Although the vigorous action that the Chancellor and his Ministers are taking is quite right, we would be wrong to think that this is consequence free. We must spend on a grand scale and we must spend quickly, but we must also spend wisely.
Although many Members may suggest different things we could do additionally, it is important to take stock of what we have done so far. We have had the furlough scheme and its equivalent for the self-employed, which have helped 18,300 people keep their jobs in my constituency alone. That is an amazing achievement: a huge public sector IT project delivered by civil servants without any problems. We should be thankful to them for that fantastic achievement. We now have the job support scheme, which is more generous than the equivalents in France and Germany. Unlike in the US, where no such scheme exists and people are just on their own, we are going to help people to keep their jobs. In addition, there are all the other things we are doing to keep jobs: the £57 billion-worth of loans across the different schemes, with £51 million handed out in my constituency alone; the VAT cut for hospitality and the deferment of VAT across the board, which has put £30 billion into businesses’ cash flow; the grants of up to £25,000 for businesses, and £20 million going to businesses in my constituency in hospitality alone; the business rates holiday; and the eat out to help out scheme, which has pumped half a million pounds into cafés in my constituency alone.
As well as protecting jobs, we have also protected incomes. We have boosted universal credit by £1,000 a year; we have spent £8 billion in total on extra welfare and a hardship fund; we have introduced a mortgage holiday that has helped one in six people with a mortgage in this country; and, most importantly of all, we are taking steps to create new jobs, with £2 billion for the kickstart scheme and a £1,000 bonus to take on new trainees. We are also abolishing stamp duty to get the housing market moving and creating new green jobs with home insulation schemes. We have the brilliant, visionary policy of giving every adult over the age of 23 the opportunity to get an A-level qualification wherever they are in their life course and not writing anybody off any more. That is a huge levelling up policy that we can be proud of.
A recent report for the think tank Onward pointed out that schemes such as the coronavirus business interruption loan scheme and the job retention scheme had helped to keep one in eight businesses in this country going and avoided a rise in unemployment of 5 million people. The Treasury can be rightly proud of averting that disaster, and I encourage the Chancellor, who has been so unorthodox in response to this unorthodox situation, to keep being unorthodox and keep thinking about ways in which we can create jobs. A lot of young people have lost out on their education and a lot of young people are looking for jobs, and perhaps we could bring the two of those things together. There is still more we can do to create employment and new opportunities.
The last thing I wish to say is about the big picture. Local lockdowns do work. Leicester’s did work, as we brought the cases down from 160 per 100,000 to 25 per 100,000. If we can make that work, it is much the best way for this country to go in order to avoid real hardship. There have to be real lockdowns. We have to crack on with it and act quickly, and I am frustrated that some leaders in the north are not doing that. If we can make a targeted approach work, that is must the best way to go and that is the best future for this country.
Naz Shah (Bradford West) (Lab)
On 10 May, the Prime Minister announced that the country would be easing out of lockdown, despite analysts highlighting that his calls were coming early, and that without a vaccine and a proper track and trace system we would fail to reduce the rise of the virus. In July, he set out plans for significant normality by Christmas and said that people should start going back to work if they could. He talked about opening sports stadiums and big venues by October. In August, the Chancellor announced his flamboyant flagship policy for people to eat out to help out. At the end of August, the Government launched an entire ad campaign to try to get people back into their offices for work. Three weeks later, the Government’s message changed to say that people in England should work from home if they could and that pubs and restaurants were to be placed under 10 pm curfews to reduce social mixing and slow the spread of the virus. If businesses, employees and this country needed one thing they could have hoped for during this crisis it was some sort of clarity in communication, but the Government and this Prime Minister failed to provide even that.
For those in constituencies such as mine, which have spent the past two and a half months in further local restrictions, the impact on the local economy has been far more drastic. The unemployment rate in my constituency is the highest in Yorkshire and the Humber, and seventh highest in the country, Figures released today by End Child Poverty show that Bradford West has had the highest rate of rising child poverty in Yorkshire and the Humber over the past four years.
The Government were late planning the furlough scheme. The first reported case of the coronavirus confirmed by the chief medical officer in England was on 31 January. The Treasury did not announce plans for significant funding to support businesses and individuals until the Budget on 11 March and it was not clear to the Treasury until the following week that the furlough scheme would even be needed. The furlough scheme had gaps where people who had started their new job after 11 March were not eligible for the scheme and were missed out. The self-employed income support scheme has failed many, especially the new businesses that have started up, as the scheme pays out based on profit made, not on actual business turnover, and most businesses make very little, if any, profit in the first few years, yet they still have expenditure.
Let me share some examples of people in my constituency. We have Art of Acoustics in Clayton. According to Musicians Union research, 87% of musicians will be earning less than £20,000 this year, well below the UK average income of £29,600, while 65% are facing financial hardship right now, 47% have been forced to look for work outside the music industry, and 36% do not have any work at all. John and Lauren, landlords of The New Inn pub in Thornton in my constituency, said today: “It’s the local situation. Our turnover is massively down, the pub’s appeal has changed, people feel uncomfortable coming into the pub.”
The Government need to listen to businesses more and seriously rethink this, as they are currently at risk from a health and safety perspective as well as facing the economic risk. The Image Mill in Thornton, which provides photographers, says: “We have fallen through the gaps as most do not have premises and are not eligible for business grants. With the 15-person wedding restriction, there are less weddings. We have missed the wedding season and we’re waiting until next year.” That has a real domino effect.
Becky from Thornton Furnishings says: “People feel the Tories are the party of business but their catastrophic mishandling of this crisis only proves they are the party of incompetence and one that does not care for small businesses or the health and wellbeing of people. I can say with certainty as a business owner I will not be voting Tory at the next election.” I think Becky really sums it up for the whole of my constituency regarding the failures of this Government.
Bradford West needs more support. I urge the Chancellor to address that. I said this yesterday and I will say it again and again: Bradford West needs some targeted support not just for its businesses but if we are not to fail the next generation.
Suzanne Webb (Stourbridge) (Con)
These are without doubt uniquely challenging times. Every Government around the world has had to shut down their economies to save lives. The consequences and impact of having to do this have been brutal not just for our economy but the world’s economy. Covid-19 is a medical force majeure unlike any we have known in the modern era. Scientists and policymakers alike are still trying to get to grips with its medical and economic consequences. No one has the holy grail in these many regards. We simply do not know enough about it.
But what we do know enough about is this Government. They are a Government who put people and their livelihoods at their very heart, who have been resolute in their response to this pandemic, and who have put in unprecedented measures to protect jobs and businesses with their economic support packages, for which my constituents are truly thankful. In my constituency alone, we have seen 13,000 jobs protected by the furlough scheme, over £9 million to support the self-employed, over 1,000 bounce back loans worth over £30 million to small companies, 64 loans worth over £11 million through the coronavirus business interruption loan scheme, and over £15 million of business grants paid out. This has all come from a £200 billion package of support that has been committed since the beginning of this crisis.
This is a Government delivering world-leading measures to protect jobs and support businesses through this crisis. We know that we are facing demand-deficient unemployment and the risk of structural unemployment. Just hearing the words “recession” and “unemployment” inspires dread, particularly having seen the harm done by welfare dependency in the past. We should not forget that before this pandemic infected our lives, it was the Conservatives who had a history of protecting, supporting and creating jobs. In 2019 we saw the highest figures on record for employment, and roughly 3 million jobs were created in the decade before the pandemic. We should not lose sight of that. Nor should we lose sight of the political opportunism of others who blame and criticise, as we have heard today from the Opposition, but without their own plans.
This is a Government interested in responsibility and accountability because it is the right thing to do, with the Chancellor launching a £30 billion plan for jobs in July, including measures such as the £2 billion kickstart scheme to help young people. It is very clear to me where the commitment lies. They are a Government focused on providing new work opportunities and not pretending to people that there is always a job to go back to in perpetuity. We cannot, after all, as a society of taxpayers, fund what would be the Opposition’s classic policy of letting people fail. This is a Government prioritising support and resources for jobseekers and the provision of retraining for those who need it.
Unlike the Opposition, who seem to thrive on the perceived delights of hindsight, the Government thrive on foresight: as the crisis evolves, their policy evolves. The Government have put people’s livelihoods at the very heart of the covid-19 policy and continue to act in the national interest while balancing the simultaneous objectives of keeping schools open and the economic engine firing and saving lives in more ways than one.
The Conservative party is the party of economic competence and sound financial management. This Conservative Government have stood up and protected jobs, incomes and businesses with unprecedented measures. They have not cowered under the weight of the pandemic; they have not abstained under the weight of the pandemic. At their heart they have enterprise to create, support and extend opportunity to as many people as they can.
Paul Bristow (Peterborough) (Con)
In my speech in the House yesterday I said that something remarkable happened in my city of Peterborough during the recent lockdown and covid pandemic. We looked after the vulnerable. We ensured that those shielding had food and supplies. We housed and fed our rough sleepers, thanks to restaurants and takeaways. We came together as one city. That made me very proud not only to represent the city but to have grown up there.
Having said that, I do not want to go through that again, but Labour Members would hit poor people in my city with another national lockdown, and it is for them to tell us how many jobs that would cost in Peterborough.
The remarkable resilience of my city is down to its people, but we did not do it alone. The Government protected jobs and businesses and provided the economic security needed to get us through this. They put their money where their mouth is: 15,600 jobs have been protected through the furlough scheme; 4.500 people claimed grants through the self-employment income support scheme; 2,185 bounce back loans were awarded; 70 coronavirus business interruption loans were awarded; and business grants worth more than £22 million were awarded.
What does that mean on the ground? It means that Eve Taylor, a fabulous historic skin and body care products company in Britain, has brought manufacturing capacity back in-house, expanding the business and employing more people. The Bottle & Board bottle shop in central Peterborough has been able to survive during this tough time. My friend Lisa Aldridge owns and runs Loxley Barbers, which had the dubious privilege of giving me my first haircut after lockdown. A bounce back loan has helped it to survive. My friends Billy and Tony Kertolli, who run a carwash in Carr Road, gave free car washes to NHS workers. There are countless further examples—all businesses that my office has helped. These are real people, real jobs and real businesses, and these people are my friends. Peterborough is a small but big city and we depend on one another, and when we needed Government support they were there for us.
The cultural recovery fund has been a lifeline for my city. We needed support and the Government listened. It would be remiss of me not to mention some of the businesses that could not be supported, including those who were moving business premises just before lockdown, sole traders with not enough money and those who paid them through dividends. I wish we could have done more, but this was one of the most generous schemes in the world, and I am pleased that the support will be there for businesses and individuals in Peterborough when we need it.
The job support scheme has been expanded to provide temporary and localised support to businesses whose premises are legally required to close as a direct result of the restrictions. The last thing my city needs are localised restrictions. They are not needed or wanted, as my city has done the right thing and rates are, thankfully, still low. Labour Members would put Peterborough back into national lockdown misery, whatever our successes and whatever our individual circumstances. I am going to make sure that local people in my city know who it is that wants to restrict their freedoms, take their jobs and make their businesses go bankrupt when there is no reason to do so. This is typical Labour, and we are going to make sure that the people of Peterborough know who would put them back into national lockdown misery.
Charlotte Nichols (Warrington North) (Lab)
At the start of this crisis, the Government promised to do “whatever it takes” to get our country and our economy through covid. They have broken that promise. My constituents, who have been subject to the tier 2 restrictions for weeks now—before the term was coined—are being left behind. We are in the frankly perverse situation where many pubs and hospitality venues would see more support to close that they would to stay open. This cannot continue. We need a financial package for tier 2 local authority areas and businesses to protect jobs as a matter of urgency.
Many sectors need additional targeted support, but the Government have so far been unwilling to stump up anything like the amount of investment required. Sector-specific support for aviation has not been forthcoming for my constituents who work at Liverpool and Manchester airports and in our local supply chain. Equally, sectors with large employment multipliers that are ready to create the kind of highly paid skilled jobs our country is crying out for are being stymied by Government inaction. The nuclear sector is perhaps the most egregious example of this. It directly employs almost 4,500 people in Warrington North alone, a growth of 700 on last year. It wants to grow further, but the Government’s tardiness in publishing the energy White Paper and making the necessary commitments to the next generation of new nuclear, including Sizewell C, is holding it back. If decisions are not made soon, we could lose those jobs forever, and at the worst possible time for our economy and the environment.
Just as whole sectors of our economy are being let down by this Government, so too are the lowest paid in our communities, from the new starters and newly self-employed who have been excluded from support to those expected to live on 67% of the national minimum wage. Do the Government not understand what “minimum” means? It is a rate independently set as the least that a person could get by on. I know that I could not get by on £5.84 an hour, and I do not know why anyone in this House thinks that a single one of their constituents should have to do so. For those not on the full rate of the national minimum wage, 67% of their salary could be as low as £3.04, which is less than the full rate of the minimum wage when Labour introduced it in 1998. If the Government will not commit to supporting all those on the job support scheme with a package at least as generous as furlough, the very least they can do is ensure that no one is being asked to live on less than the minimum wage.
The response to covid has been the worst of all worlds. The lockdown that was announced too late, that was too lax and that finished too early, ostensibly to protect the economy, and the social distancing purgatory that is failing to stamp out domestic transmission have hurt our economy far more than a national lockdown ever could. We could have modelled our response on New Zealand. It adopted a zero-covid strategy that meant short-term pain and enforced quarantine for all visitors, but its economy is now back open and people are allowed to hug their friends and families again. That should be our aspiration, too.
Kevin Hollinrake (Thirsk and Malton) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I am one of the 5.7 million business people in this country for whom this is not a theoretical concept but an existential crisis. I listened carefully to the shadow Chancellor, the hon. Member for Oxford East (Anneliese Dodds), when she talked about business confidence. I agree with much of what she says, although probably not that much in this debate.
One thing that really damages business confidence is when you flip-flop. To say on Monday that you are willing to support a local lockdown strategy and then to say today that it has to be a national lockdown is totally wrong. That damages business confidence, and it damages consumer confidence. One thing that has bolstered business confidence has been the unprecedented levels of support we have seen from the Treasury and the Government. This is the third recession I have been through in our business, including in the years following 2008, and I have never seen support like this.
We need to be honest with people when we talk about a national lockdown and a circuit breaker. Are we talking about just one circuit breaker, one hit? The reality is that the SAGE advice says we might need multiple lockdowns, multiple circuit breakers, to keep the virus at low levels. Imagine the devastating impact on businesses and consumer confidence. The shadow Chancellor has to be honest with the business community. She needs to say that this might mean—[Interruption.] I did not hear it in her speech. She needs to say that this might mean multiple lockdowns, multiple hits and multiple costs to the taxpayer, and a devastating impact on businesses. A circuit breaker will buy 28 days. It will put us back in the same place in 28 days’ time—that is what it says. Please be honest with the people. What I would like to hear from the Opposition are some ideas on how we keep the economy open. I have not heard anything from them about how we tackle this public health crisis while keeping the economy open. I have not heard that.
If we cannot look to the Opposition, we should look to best practice internationally. There is no European country I am aware of that has gone back to a national lockdown. The leader in managing this crisis is Germany, which uses not just a local lockdown policy but a sub-local lockdown policy. It closed down Gütersloh and Warendorf, with 300,000 people per district. That is what we should look at. We should stop looking at wide regional lockdowns and look at sub-local lockdowns. The hon. Lady is looking at a national lockdown, which is the antithesis of what we are talking about.
Anneliese Dodds
I regret the fact that the hon. Member, for whom I have a huge amount of respect, particularly when he campaigns on banking and other issues, has not listened to what the Opposition have consistently said about test, trace and isolate. He is absolutely right about Germany. We wish we were in the situation where test, trace and isolate was working effectively. That would mean we could have a fine-grained response. We do not have it in the UK and that is why we need a reset to fix that system. He should be honest about that.
Kevin Hollinrake
I agree with that, but it is not either/or. Of course we need to improve test and trace, but that should not mean we have to lock down the entire economy. That is absolutely the wrong thing.
I have three solutions. The number one thing is that we look at this on a super-local basis. We know that the rate of infection in Liverpool is 670 per 100,000. It is 60 in parts of North Yorkshire, but it varies significantly across North Yorkshire. We need to look at a district-based approach that would increase the amount of ownership and responsibility local people have for managing the crisis through peer pressure and from understanding that their actions would be effective.
I fully support having different tiers. I supported them on Monday and I support them today. Having said that, the two higher tiers do lead to a difficult situation. Bars and restaurants in tier 2, and restaurants in tier 3, are not required to close. That means they cannot access furlough support. There are two things we could do: extend the furlough support, which is a hit on the taxpayer; or, instead of coming down from six households per table, as it was last week, to one household, we could go to two households. That concession would have a very important effect for lots of pubs and restaurants, which would then be viable.
The third solution is business support. We need a new iteration of the bounce back loan scheme and the coronavirus business interruption loan scheme, which has been so successful. As my hon. Friend the Economic Secretary to the Treasury knows, we also need to make non-bank lenders part of that new tranche of business support. We need forbearance for SMEs. We should phase support back in, so we move VAT from 5% to 10%, and not back to 20%. We should also phase back in business rates and perhaps stamp duty.
Christine Jardine (Edinburgh West) (LD)
It is a pleasure to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake). He made some interesting points, although he will not be surprised to hear that I do not agree with most of them.
I am delighted to take part in this important debate, which, regardless of what the Chancellor says, is not about cheap shots and getting at the Government. I believe that all of us in this place are united in our determination to tackle covid-19, and to see the impact on the people’s health minimised, and their businesses and economy prepared for recovery. That is why I wish to make it clear today that the Liberal Democrats support the motion from the Labour party. More than that, we repeat our call for furlough to be extended to June next year. I know that that will cost £10 billion, but it is what the country needs, and it is a drop in the ocean compared with what will have to be spent if we get this wrong. The scheme also needs to be reformed and expanded to include the 3 million people in this country who are still waiting for any help from this Government; that is not good enough.
I also support the Labour party’s call for the Government to take on board the scientific advice and bring forward a two to three-week circuit breaker. I know that the thought of us all having to endure that again is not what any of us wants to hear, and particularly not businesses. My constituents in Edinburgh West, like individuals, companies and families up and down this country, have already endured unimaginable stress about their futures and their health, and some have endured very real hardship.
The situation that we face could have been avoided if this Government had used the summer to create a world-beating test and trace system—not one that they tell us is world-beating, but one that is. I am one of the people that my hon. Friend the Member for North East Fife (Wendy Chamberlain) talked about who jump from one app to the other when they travel. I worry that I may be on the wrong app when I need to be traced; how will they find me? A circuit breaker must be used to ensure that test and trace can and does deliver. The Government also have to provide the support for a sustained and fast economic kickstart when the circuit breaker period is over.
Let us be clear: it is not the virus that is solely responsible or to blame for where we are. It is the Government’s incompetence and inability to use the time they had over the summer effectively. We need a strategy that sets out not only the support available but a plan for recovery—a route map out of this—to provide the certainty that every sector of the economy craves. That brings me back to the extension of furlough. The Chancellor said that we need to take responsibility, and he is right, but the Government are not leading; they are responding. There is no strategy or consistency. There is no improvement. What we have instead is an astonishing chop and change, knee-jerk reaction to support for business.
We were understanding in March—we had not faced this before—but seven months down the line, enough is enough, with 635,000 cases, more than 43,000 deaths and the mourning, the job losses and the suffering that people have already had to face. Unprecedented does not have to mean impossible. The Chancellor asked us to look at the numbers. We learned this week that the economy has grown by less than half the amount expected, and the Bank of England has warned of 3 million unemployed, which will only be exacerbated by leaving the EU without a trade deal. Just in case those on the Government Front Bench think that, because I am Scottish, I am nationalist, I am not. This is not about saying that the Scottish Government are wonderful, because they are not, even though they say so. It is about asking for what the country needs—
Anna McMorrin (Cardiff North) (Lab)
It is a pleasure to follow the hon. Member for Edinburgh West (Christine Jardine). The UK Government have spectacularly failed to use the time that we had to get a grip of this virus. It need not have been this way. The UK Government have failed to work collaboratively with all four nations to implement a coherent national strategy, putting people first and protecting lives. This is not for want of trying by the Welsh Labour Government, whose repeated efforts of co-operation have been ignored.
The UK Government have failed to produce a joined-up and effective test, trace and isolate system in England to halt the spread and shield the vulnerable. Where this Tory Government have squandered millions on failed attempts by companies such as Serco, the Welsh Labour Government, in contrast, have introduced test, trace and protect, delivered by local health boards and local authorities, with a success rate of over 90%.
When nations across the world such as Germany were extending and strengthening support to protect jobs and livelihoods and provide the level of flexibility needed, this Treasury was whittling away economic support, reducing the furlough scheme and failing to support the excluded 3 million. I recently asked my constituents in Cardiff North what they thought of the current crisis and how they were managing, and the overwhelming majority of businesses that took part were worried beyond belief. They are worried about their future. There needs to be a flexible economic approach that truly supports our businesses, families and people’s livelihoods so that they are not in fear for their future. The job support scheme needs to be reformed so that it incentivises employers to keep staff on rather than letting them go. That is what constituents and businesses in Cardiff North are crying out for—an economic package that allows people to isolate if they have to and provides security and peace of mind.
Businesses in Cardiff North such as Tom at Mr Brightsides café in Llandaff North, Alwen at Iechyd Da in Whitchurch, the fantastic Birchgrove pub run by the brilliant Welsh Brains brewery, and Sue and Laura at Selah café in Llanishen, as well as the self-employed and local traders—local people who support local jobs and are at the heart of our community—have all told me that what they need is sustained economic support. The Welsh Labour Government have already brought forward a wave of measures to protect jobs and livelihoods, including the most generous package of support for small and medium-sized enterprises anywhere in the UK, and a resilience fund that has supported 13,000 companies and helped to secure 100,000 jobs in Wales.
Earlier, the Chancellor called what he is doing leadership. Really? My constituents do not see leadership; they see incoherent messaging, confusion and a Chancellor who is worried more about maintaining his brand than about showing real leadership, which means changing tack in the national interest even when it is uncomfortable. They see a Cabinet at war with itself on whether to protect health or protect the economy, failing to grasp that the two must go hand in hand. That is not leadership. People are suffering. Livelihoods are being ruined, and loved ones lost. We need a reset. Stop playing games and put people’s lives first.
Sam Tarry (Ilford South) (Lab)
This was never going to be easy—no Government were ever going to put everything right—but as millions of people face the prospect of Christmas without a job, the facts speak for themselves. Britain’s economic downturn is now the worst in Europe, and the OBR forecasts that unemployment will reach 11.9%. As a consequence, extreme poverty is set to double. In the first half of this year alone, the UK endured the worst recession of any G7 country, with GDP falling by more than 22%. We are left mired in the worst recession in our history.
Just this week, an Institute for Public Policy Research report revealed that 2 million jobs are at risk, but the job support scheme will save only 10% of them. That is because, in its current guise, the scheme simply does not incentivise businesses to retain their staff. Other countries, such as Germany and Denmark, have offered far more comprehensive packages that save a significant number of jobs. That report was followed yesterday by the announcement that redundancies are up by a record 114,000 this quarter and that the unemployment rate is at its highest for three years, leading the Office for National Statistics to revise its own estimate of the current employment rate to 4.5%.
That is why it is incredibly worrying that the support package recently unveiled by the Chancellor fell well short of what is required. Just days before the furlough scheme ends, it is forecast that between 10% and 20% of those on furlough will likely end up unemployed when the scheme ends. That means a minimum of 4,500 people in Ilford South alone losing their jobs. All this at a time when support for the self-employed will collapse next month to just 20% of profits, down from 70% currently.
More than 33,000 voters in my constituency are on some form of job support, be it furlough or the self-employment income support scheme, as a result of the pandemic. That is more than one third of the entire constituency. What am I supposed to tell those workers who are already struggling to put food on the table for their families? How many more people have to lose their jobs before this Government get a grip on the health and jobs crisis? Is the Chancellor honestly saying that, after decades of austerity, the infrastructure is in place to retrain all those who have lost jobs? Does he even know how long it would take a waiter who lost their job in Ilford to retrain as a Python computer coder? The Government’s new skills training initiative will not even be ready until April. They have their head in the clouds.
It should come as no surprise, therefore, that there is significant public backing for a new way of running our economy. A recent Survation poll found that 74% of the public are in favour of the wealthiest in our society paying more tax. I am sure Government Members will want to know that 64% of Conservative voters are in favour of that, while YouGov found that a staggering 94% of the UK public believe there needs to be a change from the status quo of the pre-pandemic economy.
The Government are simply burying their head in the sand and carrying on as though we are not still in the middle of a global pandemic. That is simply not the answer. We learned that if we had locked down the country just one week earlier during the first wave, the death toll would have been halved. The Prime Minister suggested on Monday that only very high-risk areas will get additional funding for local test and trace. I wonder whether he agrees that we need to fix test and trace across the country.
Redbridge has one of the worst infection rates in London. Time is simply running out to tackle this health and economic crisis. The UK Government have lost control of this virus and lost control of the message. They are no longer even following scientific advice. That is why Labour is calling for a circuit-breaker lockdown, coupled with the package of economic measures that we need to support and lift our people, and stop another generation going into poverty.
Beth Winter (Cynon Valley) (Lab)
The covid pandemic has exposed and exacerbated an already broken economic system that is rigged in favour of the wealthy while eroding workers’ rights and remuneration. The system is broken.
My constituency of Cynon Valley is a case in point. The local authority has endured £90 million of Tory Government cuts since 2010 and austerity. Some 23% of the population are living in poverty while child poverty rates are even higher—at 35%. Alongside that, we are one of the areas that have been hardest hit by the coronavirus like other of the poorest communities elsewhere in the United Kingdom. We have one of the highest rates of covid and of death from covid in Wales and, in certain points, one of the highest in the UK. Tory austerity measures have left people in my constituency poorer and therefore more susceptible to the virus.
Since the 1980s, we have experienced the demise of traditional industries and unemployment rates have risen sharply recently. A quarter of the workforce have been furloughed and workers are fearful for their future. Figures for universal credit claimants have almost doubled this year and they are above the UK average. The future is also bleak for our young people. The number of benefit claimants doubled between March and July this year.
The UK Government’s original furlough scheme was welcome and did provide a lifeline for many businesses but it fell short of what was required. The Chancellor’s belatedly announced job support scheme is woefully inadequate and is applicable only to certain groups. We have done things differently in Wales and the Labour-led Welsh Government have put in place an extremely generous package of support for businesses—the best in the UK. This includes the economic resilience fund, which is providing further grants to enable businesses to adapt to post-covid realities, to support the foundational economy and to assist businesses adversely affected by the local lockdown.
But the purse strings remain with the UK Government, and that places severe constraints on what we can achieve in Wales. The current arrangements between central Government and Wales are insufficient to meet our needs. We need a genuine four-nation partnership approach not only to eradicate the virus from our country—it can be done, because other countries such as New Zealand have done it—but to develop the right economic strategy and end the poverty trap that damages so many communities and individuals both financially and in terms of health. We need to end the dead hand of financial inflexibility from the UK Government so that the Welsh Government can carry over moneys from one year to the next and ease borrowing limits.
The current situation is not an inevitable consequence of the pandemic; it is the result of a political choice. With the UK entering the worst recession of any OECD country with estimates as high as 4 million unemployed, action is needed now and I urge the Government to stand by their commitment to do whatever it takes and provide an economic package that will cater for everyone. This could include reforming the job support scheme to reimburse everyone at 80% of wages or higher, provide sector-specific support, provide support for specific groups and end precarious working arrangements. Alongside that, we desperately need welfare reform to provide a safety net, and we can begin by reversing the £30 billion cuts in the social security budget since 2010.
We can afford that by taxing wealth. It is estimated that if wealth were taxed at the same rate as income tax, it would raise £174 billion a year. In 2008, the Government paid £500 billion to bail out the banks. We can do this if the political will is there. Do this Government have the political will to act to help people in communities like mine or will they continue to help the millionaire cronies with juicy contracts so they can profit—
Carolyn Harris (Swansea East) (Lab)
It is a pleasure to speak after my hon. Friend the Member for Cynon Valley (Beth Winter).
Yesterday, I received a message from a beauty salon owner, and she told me:
“5 out of 8 appointments cancelled today due to clients being in contact with someone who may have Coronavirus.”
Incidentally, before either of the Members on the Conservative Benches start patting themselves on the back that that was because of the track and trace system; it was not. It is all linked to a local outbreak in a local pub. This woman is a successful business owner, who is now left wondering how long she can sustain this level of cancellations without financial support. Having only been open for two months following the extended forced closure of the industry, she has been attempting a new normal turnover, which is already considerably less than prior to the pandemic. The spike in cases means that, this month, she is looking at being down 20% on that new normal. She is struggling; she is worried; and she is asking when the Government will recognise this industry, which has been constantly overlooked and undervalued throughout the pandemic, and offer it some financial support. My response to her is that I am wondering the very same thing.
Over the past six months, I have asked on countless occasions for support for this industry. I have sat in this Chamber while the Prime Minister openly sniggered when asked a question by one of his own MPs about supporting these businesses. His trademark flippancy and ridiculing of a sector struggling to survive is not welcome, and it has left some 370,000 employees, mostly women, feeling belittled, undervalued and angry.
As co-chair of the all-party parliamentary group on beauty, aesthetics and wellbeing—with my good friend, my hon. Friend the Member for Bradford South (Judith Cummins)—I have heard heartbreaking stories of job losses, businesses collapsing and financial insecurity for those who work in this sector. I have asked in this Chamber for the beauty and wellbeing sector to be taken seriously and to be treated with the same respect as other industries. I have written to Ministers, to the Chancellor and to the Prime Minister, and I have asked for a support package to help these businesses survive, but I feel my pleas have constantly fallen on deaf ears.
This multibillion-pound industry is currently on its knees. It is great to see the Chancellor outlining the money that will be available to support other businesses to help them survive, and I wholeheartedly support this, but where is the help for our beauty and wellbeing sector? The hospitality and leisure sectors have now had a VAT reduction to 5% for more than three months. It has been a real boost to industries that have struggled due to closures at the first peak of the pandemic and reduced income as they started to reopen.
At the risk of sounding like a broken record, I ask again: can this VAT reduction be extended to the hair, beauty, spa and wellness sectors? Can they, too, be given this financial support to help them survive with further measures looking increasingly likely, and if not, can the Minister ask the Chancellor please to tell me and the 370,000 people who earn their living from the sector, why not?
Taiwo Owatemi (Coventry North West) (Lab)
I am pleased to be speaking in the debate today. Yesterday, my hon. Friend the Member for Oxford East (Anneliese Dodds) raised a pertinent question with the Chancellor regarding the economic support available to individuals and businesses in the areas subject to additional public health restrictions. We have repeatedly spoken in the House about the Chancellor being out of touch with the financial needs of the businesses, employees and employers in our constituencies, and he is proving us right yet again. I ask him: what good is the job support scheme to businesses in Coventry North West if it does not provide crucial support to employees in tier 1 and tier 2 lockdown areas if businesses choose to close because of coronavirus restrictions? I will tell him: it does absolutely nothing.
The Chancellor’s sink-or-swim approach to the job support scheme is letting down my constituents who will not be able to access it. The job support scheme provides less security to employees than the furlough scheme. My constituents will go from receiving 80% of their wages to just 66% on the job support scheme—and that is only if people can work a third of their stipulated hours. If they cannot work, they do not receive anything. What does the Chancellor think will happen to people on lower incomes and people on zero-hours contracts? I will tell him: it will push them further into poverty, and possibly into financial destitution.
Financial support will apply only to businesses in regions under a tier 3 lockdown that are forced to close. The Chancellor has called the scheme a safety net for businesses, but it will not be a safety net for businesses that choose to shut down; nor will it be one for businesses that are told to close by local public health authorities. I do not know what the Chancellor considers to be a safety net, but this is not it. The financial support offered by the Government will do nothing for those who have been excluded from support from the very start of this pandemic, and it will do nothing for businesses that are not forced to close but need to. This is not fair and not right.
Her Majesty’s Revenue and Customs estimates that there are several hundred thousand fewer people on payroll since the beginning of the pandemic, and economists expect unemployment to increase, so what is the Chancellor doing to safeguard employees? We have already established that many people will fall through the gaps in the new financial scheme on offer. The Bank of England has estimated that the unemployment rate may well be 7.5% at the end of 2020. In Coventry North West, unemployment claimant figures have risen to 4,815, and I fear that number could rise more.
The Chancellor needs to ensure that economic support goes hand in hand with the imposition of local restrictions. We cannot have a one-size-fits-all tier system: it is doomed to fail from the very start. Were Labour in government, we would put in place a job recovery scheme that fixes the problems with the Government’s scheme, so that employers can keep more staff on rather than having to let people go. This would ensure that no one on the scheme would fall into poverty, and it would be open to all businesses impacted by the restrictions. A tightly designed and targeted scheme would also ensure that money is spent where it is most needed.
Owen Thompson (Midlothian) (SNP)
It is a pleasure to follow the hon. Member for Coventry North West (Taiwo Owatemi).
It is with something of a sense of déjà vu that I rise to speak with the Economic Secretary to the Treasury sat on the Front Bench, having had exchanges with him yesterday in a Westminster Hall debate on financial support for the events industry. I do not intend to go over the same ground today—I am sure that he will be glad to hear that—but, as with so many issues, the lack of support for those in the events industry extends much further. As I said, though, we covered much of that yesterday.
These are businesses that we just cannot abandon—businesses that are successful and will be successful again very soon. If support could be made available, it could see them over the hill. We cannot pretend that 22% of the wage bill will be even close to enough for employers to keep on staff when many are in a worse position than they were in March and when restrictions are still preventing them from carrying out their main business.
Many fantastic high-turnover businesses, such as Saltire Hospitality in my constituency, have seen the major events that they normally supply cancelled—they simply have not been able to take place during the covid pandemic. Saltire Hospitality has changed its business—it has pivoted and tried different ideas—again and again to adapt to changing circumstances, and it will have a full diary when events and conferences get up and running again. But where is the support from the Government to get it there? Such successful and viable businesses are put at real risk if the Government fail to listen.
I welcome the recognition that some extension of support was needed for wages, although it came late in the day, and I welcome the continuation of the 5% VAT rate for hospitality until 31 March, although, as my hon. Friend the Member for Glasgow East (David Linden) suggested, we would like to see that extended far more. Sadly, this support is simply not enough to halt the frightening tsunami of job losses that we can all see on the horizon.
The self-employed have all been abandoned, with the 70% profit replacement reduced to just 20%, and there is still nothing for the 3 million excluded from any support at all. The financial support available is half-hearted at a time when we need the Government to stay fully committed to doing “whatever it takes”, as the Chancellor said.
The Labour party is today asking the Government to go further, and I support that. The Scottish Government are already taking action to plug the gaps in support where they can, providing tailored packages above and beyond the Barnett consequentials, including the new £40 million fund for firms that are having to close. They are finding resources from a very limited budget and spending them wisely, something that this Government are not best known for; they could do much to learn from the Scottish Government. One wonders how many businesses could have been comfortably supported with the botched billions that have been blown on dodgy private contracts with Tory cronies and the unnecessary costs of building the Brexit border.
However welcome Scottish Government action is, without serious rethinking of the job support scheme, they are papering over cracks in a sea wall just before the tsunami hits. If this Government will not act, they should provide the Scottish Government with the fiscal levers that Scotland needs to take the right decisions to protect jobs and lives wherever necessary. Decisions on available support are not carved in stone; they are made by a small group of people with big responsibilities on their shoulders. It is a political choice, and based on the actions this Government are not taking at the moment, it is a short-sighted one. The Scottish Government calculate that extending furlough would save 61,000 jobs in Scotland. The good news is that these are decisions that can be rethought, and I urge the Government to do so for the sake of all our futures.
Alex Davies-Jones (Pontypridd) (Lab)
It is an honour to follow the hon. Member for Midlothian (Owen Thompson); I share a lot of his concerns, and I think it is vital that we recognise that the numbers often quoted in this place relate to real people, with real bills to pay and real children to look after.
Given the Chancellor’s absence yesterday, he may not be aware that my local authority of Rhondda Cynon Taf has been under local coronavirus restrictions for some weeks now, so I can speak from specific experience. Hundreds of people across Pontypridd feel utterly failed by the Chancellor and this Government. As colleagues from across the House will know, this is not the first financial hardship my community has faced this year. Pontypridd, along with the communities represented by my hon. Friends the Members for Cynon Valley (Beth Winter) and for Rhondda (Chris Bryant), was hit only eight months ago with some of the worst flooding ever recorded. Storm Dennis decimated parts of our constituencies earlier this year, and the Prime Minister said that funds would be passported to help us rebuild. Where is that money? It just shows how much stock can be placed in a promise from this Government: all these months later, we and our communities are still waiting. That is absolutely disgraceful, and shows just how little care this Government have for the people of Wales.
This Government are still pursuing a one-size-fits-all approach to protecting jobs during this pandemic. For months now, the Labour party has been calling for a sector-specific support deal, and still this Government have not accepted responsibility and have not put in place a plan to support these industries. We know that the aviation sector is facing specific and substantial challenges because of the virus. In Pontypridd, major employers including GE Aviation in Nantgarw and British Airways in Llantrisant have sadly been forced to make redundancies. Across this country, 1.6 million people’s jobs and livelihoods rely on the aviation sector. We cannot just let those jobs disappear.
The coach industry, too, is facing specific challenges as a result of the coronavirus pandemic. Like aviation, this is a seasonal industry that is very reliant on tourism. Industry experts estimate that up to four in 10 companies could go bust and 27,000 jobs could be lost if no support is made available. This will hit communities hard, as many of these companies are family-owned small businesses, such as Edwards Coaches and Ferris Coach Holidays in my constituency. It really does not have to be this way: this Government have the opportunity to save jobs with sector-specific support packages, but have instead decided to proceed with an economic support package that is clearly not fit for purpose.
The high street is also feeling the strain. Just this week, the group that owns Peacocks, a significant employer in my constituency, announced that it is appointing administrators. That puts 24,000 jobs across the country at risk, and other well-known high street brands are also feeling the strain. River Island recently closed its store on Pontypridd’s high street after being doubly hit, first by flooding from Storm Dennis and then by the coronavirus pandemic, and Pontypridd’s high street is sadly not alone.
Then, there is still the problem of all the people who have been left out of Government support altogether. Earlier this week, I asked the Minister about support for people who have been excluded from the Government’s support schemes. His response was that the Government had covered the issue. Well, the 3 million people who have been excluded from UK Government support during the coronavirus pandemic do not feel like this issue has been covered at all. When will the Government take some responsibility? They cannot govern with eleventh-hour announcements and leaks to the press. People in areas under local restrictions need clarity and guidance, not slapdash announcements that have not even been thought through. I urge the Chancellor and the Minister to consider their priorities deeply going forward, because our constituents all deserve a secure economic future, and people across Wales deserve better than to be consistently forgotten and betrayed by this Government.
Ms Angela Eagle (Wallasey) (Lab)
The Government have already conceded that fighting the spread of this dangerous covid-SARS virus in our country requires extraordinary levels of state action and support, but now, just as the fight is intensifying, it is clear that they have lost their nerve. We are not only battling this deadly virus; the Prime Minister is fighting his libertarian instincts and the right-wing ideologues in his party. They are opposed to the collective state action that is necessary to save lives and mitigate the damage from the pandemic. The delay that this fight caused in March left us with a double whammy of the highest per-capita death toll in Europe on top of the largest economic hit in the G7, and now, this unforgivable dereliction of duty looks like it is happening again.
As the Prime Minister dithers, the virus spreads. His failure to take timely and firm action will cost more lives and wreak more damage on our economy. As he courts his mutinous Back Benchers and abandons the science to keep them sweet, all the warning signs are flashing red again. He is behind the curve and he knows it, and since the SAGE minutes were published on Monday night, we all know it, too.
The Government have lost the trust that they need to lead the fight against this deadly threat. Their partisan, high-handed behaviour has made it worse, excluding Parliament completely. There are constant briefings to the media, and an obsession with outsourcing and centralisation has caused the failure of Test and Trace and the scandal of PPE supplier contracts to Tory donors. And:
“We will do whatever it takes”—
has now turned into the inadequate furlough-lite proposals that the Chancellor has recently come up with. Just as the virus returns, he has packed up the safety net.
For my constituents in Wallasey, who are now in tier 3 and facing a local lockdown, vital support disappears at the end of the month. In Wirral, 31,000 people are still on furlough and it will disappear at the end of the month, just as the virus comes roaring back. What replaces it is completely inadequate, as the Chancellor knows only too well, and those who are losing their jobs or their business do not want a lecture from him about how much he has already spent. Those who are excluded completely from this support in the first place—the freelancers, some of the self-employed—do not want that lecture either. They want a Government who will recognise the hardship that the pandemic has caused and be there to help. The least that the Government could have done was to repurpose the £40 million in unspent support allocated to the Liverpool city region, which is now in tier 3, to support local businesses, but again today the Chancellor has refused even that modest request.
Those forced to self-isolate to stop the spread of the virus need the support to do so and not to have to choose between feeding their family and obeying the rules. Wirral Council, which has been at the forefront of the fight against the virus, has not been reimbursed for what this has cost and, like many other local authorities, it is teetering on the verge of bankruptcy.
So what do we need? We need an increase in generosity of the furlough-lite scheme. It has to pay more to those whose jobs are affected. We need wider eligibility; it has to go to businesses that are affected, not only those that close. We need to include the excluded, which means freelancers and the self-employed, and we need to pay adequate sick pay for those forced to isolate. If we do not do that, the virus will roar back, and the economic cost will, in the end, be far greater and the cost in lives will be unbearable.
Layla Moran (Oxford West and Abingdon) (LD)
Today I want to focus on the forgotten—those who have been forgotten by this Government in my constituency and right across the country. There are 3 million people who are excluded, not to mention the 4 million who are now reliant on the flawed universal credit system.
In Oxford West and Abingdon, the claimant rate has increased by 255% since March, and what scares me is that here we are again. They all suffered when we went into lockdown. We had meeting after meeting to raise these issues with the Government, and we were told that if we come together and clap for our frontline workers every Thursday, we will get through it, yet here we are with a three-tier system that will inevitably lead to another lockdown.
We are hearing that the Government have begun to abandon listening to the scientists and are instead following a strange balancing act, which they are trying to present as Goldilocks—the best of both worlds—when, in fact, we have some of the highest case numbers per capita in Europe and some of the poorest performing economic metrics. It is the worst of all possible worlds, not the best.
In my constituency, like many others, there are some horrific stories. The director of a small gym in my constituency pays himself via PAYE and dividends, and he is petrified of what he sees happening in the north, with the closing of gyms. He is wondering what is going to happen. Will there continue to be no safety net? He is worried about going out of business altogether.
These are the 99% of businesses in this country that form the backbone of our economy, and once they close, as the Minister and the Chancellor well know, it will be difficult for them to start up again. I have a constituent who is working two jobs, because neither pays enough to cover the cost of living. She gets nothing now, because 47% of her income is from self-employment, and the most striking thing in her correspondence with me, and in the correspondence of my constituent Christopher who works in the creative arts industry, is the real sense of fear and deteriorating mental health.
Reading the emails from the beginning of March to now, they are tetchy. They apologise to me for the tone of their emails, but it is not they who should be apologising. It is the Chancellor, the Minister and this Government who should be apologising to them for the stress they are under. Christopher has not earned a penny since March, and he makes the point that he has spent his whole life paying his taxes and that he has a contract with this country, and I totally agree.
We need to improve furlough. We need sector-by-sector bail-outs where needed, but Christopher has received absolutely nothing. He is supporting his wife and two children, and he has paid taxes his whole life, and he feels completely abandoned. He is now talking about feeling depressed and anxious. The long-term effect of the lack of Government support on people’s mental health is one consequence of this pandemic that we are not taking seriously enough, so I hope those constituents and others across the country who are hearing the speeches from the Opposition know at least they are not forgotten—even if they might be excluded by this Government. All I would like to say is a plea on their behalf. Please, this is not dealt with. Yes, there are support packages for others, but it has not reached them.
Kate Osborne (Jarrow) (Lab)
It is an honour to follow the hon. Member for Oxford West and Abingdon (Layla Moran). I agree with so many of her points.
In my constituency of Jarrow, people have been living under local restrictions for over a month without any clear support package in place. The Chancellor’s indecisiveness has left workers and businesses across all constituencies, particularly in areas under local restrictions, in complete limbo and often confused by ever-changing rules and regulations. It is no secret that wealthy areas, including the Chancellor’s own seat of Richmond, are avoiding being locked down, despite higher covid-19 rates than in less wealthy areas that are subject to restrictions.
It begs the question: if London and the south of England had been asked to live under the same restrictions as those implemented in the north, would the Government have found new strategies a long time ago? This utterly stinks of classism and serial incompetence at the heart of this Government, and the empty Government Benches tell me how much the Government are not listening.
The Chancellor has made a U-turn of sorts, but people in my constituency have already suffered, and for many this has come far too late. It feels to many like an intentional managed decline. This is not levelling up; it is levelling down.
Let us take the example of Kieran, a bar manager in my constituency who got in touch, heartbroken that his bar has turned from a hiring business to a firing business in the weeks since the local restrictions were introduced. Kieran’s business saw infection rates staying stable for the two months after reopening, so like many of us he is at a loss to understand why the hospitality industry is being made a scapegoat for the rise in cases, when no concrete evidence has been produced by the Government to prove that, despite Members from all parts of the House asking repeatedly for that evidence.
There is nothing new for the self-employed, nothing again for those who have been excluded from the start and nothing for businesses that are not forced to close, but are suffering because of their local restrictions. In fact, some local hospitality businesses and others have told me they would rather be in tier 3 than tier 2 due to the lack of financial support. The Chancellor’s chaotic habit of trying to fix problems of his own making at the last possible minute is costing jobs and causing chaos. The UK is on course for a 1980s-style jobs crisis, and the Chancellor’s name is all over it.
I fully support the proposals by the shadow Front Bench team that would put in place a job recovery scheme that fixes the problems so that many employers can keep more staff on. If the Chancellor’s current plans are not reformed, millions of people will be pushed into unemployment, yet the Government will still be required to offer financial support through many benefits, such as the inadequate universal credit. Households will feel the squeeze and the prospects for recovery will be hampered by a lack of income and low confidence among British households. The legacy from the last period of mass unemployment already casts a shadow over the British economy, particularly in the north, and I can only imagine what the legacy of the Prime Minister and this Government will look like. Nobody is asking for the furlough scheme to go on forever, but workers and jobs must be protected if we are to return to any kind of normality when we finally defeat this virus. The Government should put the correct levels of support in place, make the correct political decisions and save jobs by supporting all businesses, no matter the size or the sector.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to follow a fellow north-east MP, my hon. Friend the Member for Jarrow (Kate Osborne). The UK has one of the highest covid-19 death rates in the world, with thousands of lives lost and families torn from their loved ones far too soon. The UK is also on track to have one of the worst recessions, with millions out of work and people looking for employment in the most hostile conditions imaginable. Yesterday, it was announced that the UK unemployment rate had surged to its highest level for over three years at 4.5%. The disastrous mix of the pandemic and Tory incompetence continues to decimate our jobs market.
While the national picture is devastating, what is happening in the north-east of England is utterly catastrophic. We have among the highest mortality rates for deaths involving covid-19 and our unemployment rate has soared to 6.6%, the worst in the UK. As Niamh Corcoran of the North East England chamber of commerce said yesterday:
“The North East now finds itself with the highest unemployment rate, the lowest employment rate and the lowest average hours worked of all British regions…Although the Government’s amendments to the Jobs Support Scheme offers some support for our region in the event of tighter restrictions, it does not go far enough.”
For thousands of families, their income is precarious, dwindling or has disappeared, and new child poverty statistics released today by the End Child Poverty coalition show that the north-east has seen the biggest rise in child poverty. In my constituency and next door in Stockton South, the proportion of children living in poverty has risen to 34% and 29% respectively, with others in the Tees valley higher still. Those are not empty statistics, but represent thousands of living, breathing children plunged into poverty as a result of poorly paid jobs or no jobs at all for their families.
The Tees valley is haemorrhaging jobs. Some 12,565 have been lost since March, and thousands more are now destined for the scrapheap thanks to the Tory response, yet businesses in tier 2 lockdown, such as those in my constituency, have no safety net whatever. They are not legally mandated to close, yet we know for a fact that many of them will, and many will not open again. They will have few, if any, customers, but they will get no proper support from the Government. Simon Longbottom, CEO of the Stonegate Pub Company, which has 10 pubs in my constituency, said:
“Whilst we are continually working to protect jobs, with every new instruction from Government our delicate business balance fractures further.”
Even businesses that are mandated to close will only get partial support for wages, which can only mean another wave of job losses.
Across the Tees valley and the north-east, we are crying out for serious and sustained economic investment. Our Tory metro Mayor promised job creation for the Tees valley, but he has spent £100,000 on each job he has created in the last three years. Then there is Houchengate. The Tory Mayor proudly donned his hard hat to announce that he was spending £1 million on a new gate to an industrial estate, with few, if any, jobs. That £1 million could have provided 100 vulnerable businesses with a £10,000 lifeline and probably saved many of them from closure. Sadly, it has been spent on a gate. There is no protection scheme for jobs. For every job announced in the last three years, five have been lost in the last six months.
We need a serious vision from the Government—one that is not just about creating a few eye-wateringly expensive new jobs but about protecting the good jobs that already exist. If the Government do not act, not only will we see the poor suffer even more in communities like mine in Stockton North, but many families who have never experienced poverty in their lives will experience it for the first time. That is not a place that we as a country want to go.
Stephen Kinnock (Aberavon) (Lab)
The last seven months have been extremely difficult for individuals, families and communities across our country, so I want to start by paying tribute to those in my constituency who have kept our economy and our community going. Key workers and community groups have pulled together in an incredibly resourceful and compassionate way to get us through these difficult times, while local businesses have turned their hands to manufacturing PPE at the drop of a hat and showcased an amazing amount of skill and flexibility. It has been an inspiration to witness.
However, many of my constituents have been badly let down by the cracks in Government schemes or by incoherent UK Government communications. For instance, holidays are not seen as a reasonable excuse to leave a lockdown area, yet because the flights are going ahead, some travel companies and insurers are refusing to give refunds or pay out. One constituent of mine lost £1,800 on a trip to Turkey by trying to do the right thing in staying home, and another faced hardship over a trip to Portugal. I would like to hear what the Government are doing to apply pressure on those firms and to compensate customers where a firm has gone bust.
There is still a lack of support for self-employed people during local lockdowns, and many of Aberavon’s pubs and hospitality firms are increasingly concerned that they are not receiving sufficient compensation. The Chancellor needs to recognise those problems and listen to those on the Opposition Front Bench, who have been constructive and consistent throughout this process. Labour has stated clearly that the Government should put in place a job recovery scheme that fixes the problems with the Government’s schemes, so that employers can keep more staff on, rather than having to let people go; that ensures no one on the scheme falls into poverty; and that is open to all businesses impacted by the restrictions.
We need the Government to recognise the large number of holes in their recovery plan and actively strive to fill in those holes, rather than simply ticking the boxes and turning away. That is why Labour is stating clearly that a two to three-week circuit-breaker lockdown should be accompanied by the reopening of the Government’s closed £1.3 billion fund, using the underspend to support businesses in need.
By far the biggest employer in my constituency is the Port Talbot steelworks, yet Tata Steel has fallen through the cracks in Government schemes and is yet to receive a single penny of covid-related support. Steelworkers are key workers. The steel industry continues to operate and serve Britain through the crisis as we look to rebuild our economy. It is the foundation of our entire manufacturing sector. We need our steel, but the industry can only get through this crisis with urgent support from Government.
Make no mistake about it: steel underpins our entire manufacturing sector, from defence to aerospace, automotive and construction. It builds resilience and reliance into our economy. It is also far greener to make steel in the UK than to import it. There are some fantastic projects such as SPECIFIC in my constituency, which is about creating photovoltaic cells with a steel-based film. The Government must offer long-term support to steel in the form of a sector deal, such as the one that aerospace and construction have, but they must first offer immediate short-term support to get us through this crisis. The message is clear: we need our steel. Steel is a 21st-century industry that forms the backbone of our economy, and there can be no post-pandemic recovery without a strong and healthy steel industry.
Kim Johnson (Liverpool, Riverside) (Lab)
Yesterday, I received the latest claimant figures for my constituency, and its rate of claimants has doubled since the pandemic began in March. The level of joblessness in my constituency is one in five, and this includes those, like many of the ExcludedUK members, who do not feature as they are unable to claim any support whatsoever. Now that Liverpool has been declared a tier 3 zone, our leisure facilities and gyms, and our hospitality sector, are being forced to close. Across Liverpool, approximately 30,000 people are employed in this sector and they all face at least four weeks without work. The job support scheme offers less support than comparable schemes in other countries; it will provide only 67% of earnings, and this will force many people into poverty. The point has been made this week by colleagues that bills, rent and food costs are not reducing by 67% to match that. The support for those who are self-employed and reliant on the hospitality and leisure industries for business reduces to just 10%.
I watched the interview with Natalie Haywood on ITV this week. She is the owner of Leaf and OH ME OH MY, two of our city’s leading hospitality independents, and it was heartbreaking to watch her despair at having fought hard to recover from the first lockdown and now being faced with losing the iconic businesses she has built up, and worse, possibly having to lay off her staff. She is far from alone. Another interview was with the owner of Lunya, a business that has paid more than £10 million in taxes in its 10-year history and employs dozens of local people. The business has been adapted to ensure its survival throughout this first lockdown, but he now risks losing his business and his home. Yellow Sub, one of the best-loved children’s indoor play areas, was one of the last businesses allowed to open. It missed the busy summer season and will now miss the half-term, with the business being put in jeopardy, jobs being axed and more people without work. Many of these businesses accessed the Government grants in the first lockdown and saved their businesses, and they reopened, even on a limited capacity basis, in September. This unforeseen enforced lockdown, without that support, has left them reeling and looking at the bleakest of futures.
Liverpool’s hospitality and leisure industries are critical to our economy. In one of the top five UK destinations, the sector contributes £5 billion to the Merseyside economy and sustains 50,000 jobs. Forcing this entire sector to close for an indefinite period, without the financial support that was available in the first lockdown, will decimate our city and our region.
I must thank our metro Mayor, Steve Rotheram, and the six local authority leaders for pulling together a £40 million support scheme for the sector, without which we would undoubtedly be facing a domino effect of shutdowns in our city centre, but we need more. The local restrictions grant scheme will not provide enough to cover the overheads of most of our small independent businesses, the ones that make Liverpool so unique. I call on the Government to repay the city the unspent discretionary grant fund and allow us to invest in our economy. I am a very proud Scouser and I am privileged to represent such a resilient city, which always fights back to protect its people. But let us have a fair fight. Give us the money we need to protect jobs and livelihoods, and keep our economy going, and we will respond by supporting our businesses and workforces, and we will come back stronger.
Matt Western (Warwick and Leamington) (Lab)
Never has a relationship between the health of a nation and the wealth of a nation been laid quite so bare as it has over these past six months. We were promised “world-beating” by this Prime Minister and his Health Secretary, and we got it—the UK has seen not only the worst rate per 100,000, but the worst economic impact among G20 nations. In response to calls from Labour and the TUC, the Government wisely introduced the furlough scheme, and the initial financial support from the Government was a lifeline to many of my constituents. Some 16,000 people in Warwick and Leamington were furloughed. Business grants and loans kept our local economy going, and the district council was superb in how it did that. Why then, as we head into a second wave, are the Government hellbent on pulling the plug on that support? On 11 March, the Chancellor promised to do “whatever it takes”, but the job support scheme incentivises keeping on one employee instead of two. People working for businesses that have closed under local lockdowns will receive no more than two thirds of their salaries, even on a minimum wage—imagine that, the minimum wage is no longer a minimum. The winter economy plan offers no additional support for those businesses that are required to close. There is no support for those viable businesses severely hampered by the ongoing situation. There is still no answer to the calls of the 3 million taxpayers who have been largely excluded from financial support since the beginning of this crisis, and the offer to self-employed people at 20% of average monthly profits is miserly.
The chart and data published by the OECD, an independent international body, shows how the UK was the hardest hit of any major economy from April to June. Growth is slowing and the economy is still 9% smaller than before the pandemic struck. Our unemployment rate has hit the highest level in more than three years. Our young people have been hardest hit, but across our communities we know that there are many more job losses to come. The number of claimants in my constituency is already up 135% since the start of the pandemic. Whole sectors have been flattened. Automotive manufacturing, which is so important to my constituency and to many others, was brought to a standstill. It has had its worst September sales this century, and this is resulting in the UK industry facing massive financial pressure.
Across the economy, from our assembly workers to our energy engineers, our brewers to our baristas, our dancers to our designers, all too many fear losing their jobs, but it did not need to be this way. If we look at the countries that have the strongest economies now, they are those that took clear early action to suppress and eradicate the virus. China, Taiwan and other Asia-Pacific economies are on course to grow in 2020. They took early action to suppress covid-19 to extremely low levels and put in place highly performing track and trace systems. The only consistency from this Government was their inconsistency. Barbers could work, but beauticians could not. We could spend four hours alongside 300 people on an aeroplane, but not with 50 people on a coach or bus.
The Government had the whole summer to produce a plan for schools, a plan for universities, a plan for care homes and, most importantly, to fix test and trace, instead of which they spent their time telling us to eat out to help up and they blew their budget. We could have eradicated the virus with a proper strategy, but the Government dithered and delayed. They ignored the approaches from personal protective equipment manufacturers in my constituency—businesses such as Staeger Clear Packaging in Coventry and Tecman more locally to me. These businesses could have helped us through, but they were ignored.
The Labour party has called for the Government to follow the science and immediately implement a circuit breaker to regain control over the virus and implement a proper strategy to protect public health and therefore the economy. I just hope that they listen.
Siobhain McDonagh (Mitcham and Morden) (Lab)
This debate is about fairness, because the costs and sacrifice faced by businesses in certain sectors are clearly not equal. That is often just down to definition and description contained in regulations. The word “unprecedented” has been used an unprecedented number of times in this House throughout 2020, but asking businesses in sectors that have remained closed since March to keep their doors closed for the winter months ahead really is unprecedented. Their simple guilt is that they supply the events and hospitality sector. They supply the flowers, the laundry and the lighting for events. I do not challenge the science. These businesses understand their responsibility, and the extraordinary circumstances that we are in, but their sacrifice cannot continue to go on unsupported.
Although the businesses that I am referring to today are from my constituency in south London, where additional restrictions are not yet faced, they are reflective of businesses and industries right across the country. I quote directly from an incredibly sad letter from Mary Cole, managing director and founder of Skyline Whitespace, a very successful modular reusable exhibition production company in my constituency. Mary, a single parent, has built the business up over 20 years while having leukaemia and a bone marrow transplant. She employs 52 people and had a substantial turnover and profit in 2019, but the closure of her industry means that sales have plummeted and, with winter events now ruled out, her company is in freefall. Put simply, it is on the brink of collapse. Government-backed adverts crassly suggest that she should rethink, reskill and reboot, but that is hardly welcome news for her staff, who may face imminent redundancy. The Chancellor promised to do everything that he could, so can the Minister make it clear to me how the business is expected to survive? I quote directly:
“We do not expect special treatment as a sector. We simply want to be treated like all others that have been allowed to reopen under Government-approved guidance. We currently do not feel like our industry is being treated fairly.”
That is no isolated case. I have been contacted by actors, musicians, dancers and organisations that support the events industry—floristry, lighting and linen businesses: Larry Walshe Studios, Just 4 Linen, Dash Linen, Crystal Everest Linen, Tuxedo Express, Lightwave Productions, White Light Ltd, Focus Lighting, Oxygen Event Services, La Credenza, and so many more. They are all unable to open, yet they are receiving little or no support.
This is about fairness. How are they supposed to survive? Stipulations and support must come hand in hand, so what message does the Minister have for those businesses today? A harsh winter appears on the horizon and must not be made even harsher. The entire sector is on the brink of collapse.
Ruth Jones (Newport West) (Lab)
This pandemic has hit our country hard. It has hit families, businesses and communities back home in Newport West and many other communities across the UK.
The motion has my full support. We need the Government to do whatever they can to support people through the crisis. I say this with no relish, but the Chancellor’s dithering over whether and how to support people living under local restrictions has put jobs at risk, left workers in limbo and, as we have heard today from many colleagues, created a sense of chaos, fear and concern in the midst of a pandemic.
Over recent months so many people from across Newport West have got in touch about their experiences. I have listened carefully to each of them and made many direct representations to Ministers, some of which remain unanswered. I think of John Atkins, who owns the Events Agency, a business based in Newport West. His business is part of the exhibitions and events sector, which now finds itself on the brink of extinction. John’s business has been closed since March 2020 and unlike other parts of the economy it has not been able to open since.
We need proper financial support for businesses such as John’s. He is part of the creative arts sector and his business will be viable once we have resolved the current crisis. He does not need to retrain, as the Chancellor has suggested, because his business will be back up and running, and he will contribute to the local and national economy by paying taxes and shopping locally. He needs financial assistance now to ensure his business is able to continue in the future.
I think of Sam, who runs the pub in Newport city centre—a pub and social enterprise that employs people, helps those in need of food and contributes to the local economy. Businesses in the hospitality sector such as Sam’s need a Government on their side, not one who walk on by.
I think of Charlie Magness, a wedding photographer living and working in Newport West. Three years ago, she set up her own business and has been reinvesting and building it up ever since. As a result, she is not eligible for the financial support she so desperately requires—another local viable business that will thrive in the future but needs financial support at the moment.
John Lewis is a local electrician who gets his salary through dividends in the limited company he was advised to set up. As a result, he has received no financial support during the pandemic. His is a vital small business giving a great service to the local community that again has had no help, and he has fallen through the financial safety net.
Many of my constituents are hurting and need Ministers to wake up—and wake up fast.
Chris Stephens (Glasgow South West) (SNP)
The Chancellor told us in March that no one would be left behind, but that has now become: Government support is not a universal scheme.
I very much associate myself with Members who have spoken of the excluded: the newly self-employed, many of whom are on zero-hours contracts; freelancers; and artists, including comedians. You would think that the Government would have shown some solidarity with comedians, but, no, they have not. I make a serious point, which was made very well by the hon. Member for Newport West (Ruth Jones) about the creative arts. The creative arts sector is very important, particularly in bringing young people into work who do not want to go into a conventional office environment, factory environment or the rest. The creative arts has that place. It is important that the Government reflect on the support that they could give the creative arts, but also on the support that they are going to give, and should give, to those who have not received anything at all since March.
I very much agree with the criticisms of the job recovery scheme and what it means for individuals who are currently being paid the national minimum wage. Now that we are in this crisis, I ask the Government to look at poverty-proofing their policies. I hope that the Minister might want to say something about that. I have a very real concern that the lack of support they are giving will put more people into poverty.
That brings me quite nicely on to universal credit and making the temporary £20 uplift permanent. I am a member of the Work and Pensions Committee, which will be looking at this and we hope that it will be debated in the Chamber in future. I hope the Minister will reflect on this because we are in the middle of a global pandemic that has delivered a severe blow to people’s incomes and livelihoods right across these islands, and vulnerable households are taking a disproportionate economic hit. Far too many people are living under the constant threat of poverty and the coronavirus pandemic crisis is only exacerbating the financial challenges facing those families and the impacts on their health, particularly their mental health.
The findings are that 4 million families could see their support slashed if the Government refuse to make the £20 uplift to universal credit payments permanent. I hope that they will reflect on that. Making the £20 uplift permanent is the bare minimum that we would ask them to do to rebuild social security, with the findings showing that it would undo, at most, two thirds of the benefit cuts made since 2015, let alone those made during the time of the coalition. With mass unemployment on the horizon and other key support schemes being prematurely ended, it is critical that the Government heed the warnings from anti-poverty charities and strengthen that support by extending the £20 uplift. I hope that the Government will also look at sector support, particularly for aviation; I have many constituents employed in that sector.
It is ludicrous that there is not going to be a Budget. That impacts not just on the Scottish Government but on local government, which will have to be in the dark in trying to put its budgets together next year. That is a ludicrous position and I hope that the Government will reflect and think again.
Mr Toby Perkins (Chesterfield) (Lab)
I was really frustrated by the sense, in some of the interventions on my hon. Friend the shadow Chancellor, that the Labour party, in making this extremely serious suggestion, was taking lightly the economic consequences of going into a circuit-breaker arrangement. We should not be starting from here. We have all been saying throughout the course of the past seven months that the approach the Government are taking was not working. They failed on PPE. They were slow into lockdown. The testing and tracing regime has been an expensive fiasco.
We have seen the approach that the Government have taken that has got us to this point and has been failing, and they then turn to us and say, “Don’t you realise there are costs to the economy of trying to get on top of this health crisis?” Of course we know that it is costing the economy: we have been saying that throughout the course of the past seven months. But we have now reached a point where the Government have lost control of coronavirus and only the measures proposed by the Leader of the Opposition yesterday, recommended by SAGE, are likely to get us back on top of the virus. So there is no naivety from our perspective about the costs that are attached to this, but we also see the costs that are attached to constantly, inch by inch, surrendering ground to the virus, as we have done over the course of the past seven months.
Many people are confused. They do not know which area they are in. We look at Sky News and it tells us that Derbyshire is in tier 2. In actual fact, only a very small part of Derbyshire is in tier 2. The majority of it is in tier 1. I have people saying, “Well, am I allowed to travel into tier 2 to get a meal? Can someone from tier 2 come into tier 1?” because they have booked a table and want to meet their friends in an area where they are allowed to do that. There is utter confusion about what is actually happening out there.
As I have said to the Chancellor previously, saying that pubs can stay open in tier 2 areas, but you cannot meet anyone there other than your own household is really disingenuous. All the publicans I speak to say that moving to that approach, on top of the other restrictions, simply makes their businesses unviable. In most cases, they would be better off not paying staff and staying closed than they would be opening under those terms, yet the Government say, “You’re allowed to open, so we do not consider we have anything else to do.”
The Chancellor is fond of saying how much he has spent, but how much has he wasted? My hon. Friend the Member for Oxford East alluded to a variety of things that are leaving people out in the cold. We all know 3 million self-employed people have been excluded, but what about all the self-employed people who were given money unconditionally when many of them were carrying on working? There was no conditionality on the self-employed scheme which said, “The money is there for you if you are forced to not work, if you are in a business that is unable to carry on,” yet 3 million people are left out in the cold.
The Government have let people down. The strongest sign of that fact is how few Conservative speakers there have been in this debate. Just six Back-Bench Tories wanted to stand up and speak up for the approach the Government are taking. That speaks louder than any speeches we have heard.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
We have heard today from many Members on the Opposition Benches, but, sadly, rather fewer from the Government side. Owing to time constraints I am afraid I cannot mention every Opposition Member who spoke in today’s debate, but the House will have heard the despair that so many of our constituents feel at the prospect of their jobs disappearing, the very real difficulties their businesses are under, and the growing anger that while the Chancellor thinks it is too hard for the Treasury to provide targeted support, he is very happy to write off businesses and jobs as unviable. What all those contributions have in common is the need for the Government to provide clarity and consistency. Health restrictions and economic support must go hand in hand, or else the restrictions will not work and the costs will spiral.
What is extraordinary is that we are having to have this debate at all. At the start of the pandemic, the Chancellor—what a delight it is to see him with us today in the Chamber, gracing us with his presence—set out an economic support package for individuals and businesses. The Government were clear, and our party supported them, that, if restrictions on people’s ability to earn a living were necessary as part of a national endeavour to bring the virus under control, support was also necessary to prevent destitution and the collapse of businesses across the country. But since June, as area after area has been placed under local restrictions, we have seen the Government slowly retreating from that obvious common sense.
Today, millions of people, not just in England but in Wales, Scotland and Northern Ireland, find themselves living under fresh restrictions. They may be local in scope, but the people of my constituency, and all the other areas facing such restrictions, rightly look to this House for answers. The restrictions strike at livelihoods, whether they are employed or self-employed. For others, it strikes at the heart of the viability of family-run businesses that for so many years they have put their life and soul into building up. It is heartbreaking to hear their stories and to hear the fear in people’s voices about whether they will still have a job by Christmas.
Families and businesses do not expect handouts from the Government; they expect fairness. They expect that, if the Government stop them working, the Government will step in to make sure they do not go hungry or lose their homes. As the shadow Chancellor rightly said, we cannot see people left to sink or swim. As well as the support needed to stop people’s jobs disappearing, the shadow Chancellor set out the Government’s failure to provide a safety net worthy of name for those whose jobs have already gone. I am aware that time is short, so I will not repeat her questions, but I note that, sadly, none of them was answered.
These are not new concerns. In July, we warned the Government that what was needed was not a stopgap statement, but a full back to work Budget. We warned that removing furlough too soon—a one-size-fits-all approach—failed to recognise the very different challenges faced by different sectors in the months ahead, with so much uncertainty about the future of the pandemic. We warned then that what would be needed was targeted support, and that the Government should be planning on that basis. We asked the Government then what they planned to do to support the excluded—the people who fall between the gaps of the Government’s schemes.
The refusal to think and to plan ahead and the refusal to fix problems until it is too late is becoming a theme of this Government. Five weeks ago today, Conservative Members argued and voted that
“any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy”.
Only a fortnight had passed before the Chancellor was dragged to this House by the shadow Chancellor and deviated from his plan—to announce a winter plan, a replacement for furlough. Within weeks, he was at it again, on television this time, announcing yet another deviation. Of course, we cannot claim perfect foresight, but I do not think anyone in this House would have foreseen, even in our darkest nightmares, that the test, trace and isolate system would still be such an almighty mess almost seven months after the start of this pandemic.
Whatever our frustrations about the mishandling of this crisis, what matters above all else are the jobs and livelihoods of the people we represent, and Labour’s alternative is clear. We would put in place a job recovery scheme that fixes the problems with the Government schemes so that employers can keep more staff on, rather than having to let them go; that ensures that no one on the scheme falls into poverty; and that is open to all businesses impacted by restrictions. We would ensure clear, consistent and fair funding to every local area as soon as local restrictions are applied. We would reopen the Government’s closed £1.3 billion fund to support businesses in need. We would fix the yawning gaps in the Government schemes for the self-employed. We would stop wasting money on failing private contracts to deliver test, trace and isolate. The money should instead go to local areas, and should not be delivered only once infections have skyrocketed. Our scheme would be designed and targeted so that public money was spent where it was most needed, not splashed on unnecessary bonus schemes or without proper safeguards for workers.
It is not too late for the Government to listen—to the Opposition, to businesses, to families, to trades unions and to everyone whose livelihood and business is now at risk—and I urge the Government and the Chancellor once more to stop, to listen, to think again and to put in place the support our country desperately needs.
The Economic Secretary to the Treasury (John Glen)
It is a privilege to close this debate on behalf of the Government. First, I thank hon. and right hon. Members across the House for their insightful and considered contributions. From listening to those contributions, it seems to me that we can agree about the nature of the challenge, which is to find a flexible and sustainable response to the twin health and economic emergencies caused by the virus. This Government have designed and implemented such a response. The Chancellor called for a toolkit to protect jobs and businesses over the difficult weeks and months to come, and in closing today’s debate, I will outline its newest elements and respond to some of the points made by Members across the House.
On Monday, the chief medical officer, Professor Chris Whitty, observed that we face two potential harms:
“a harm for society and the economy on the one hand and a harm for health on the other hand.”
In other words, the decisions we take are about finding that right balance. The need for balance as we evolve our economic response was expressed eloquently by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who has provided wise counsel over recent months and set out very clearly how the Government’s intentions are to keep as much open as possible for as long as possible. In formulating the Government’s economic response to the pandemic—the subject of today’s debate—my right hon. Friend the Chancellor has sought that balance. He said earlier that we must not shy away from the burden of responsibility to take decisions and lead. We have not, and we will not.
The primary goal of our economic policy remains unchanged: it is to support people’s jobs. That is why we have progressed the next phase of our winter economy plan with the express intention of laying the track for economic recovery by protecting jobs through the coming months. As the Chancellor said, the new phase of that plan has three key elements: the job support scheme; cash grants for businesses that are forced to close; and additional funding for local authorities. These more targeted measures will come into force as the furlough scheme winds down at the end of the month. That scheme has supported more than 9 million jobs, but the House will understand that it cannot continue indefinitely, as the Chancellor made clear from the outset.
First, we will expand the job support scheme. This will help to protect jobs in businesses that can continue to operate as well as in those that cannot. For those businesses that can open safely but where there is reduced or uncertain demand, the Government will directly subsidise employees’ wages, meaning that those employees can work shorter hours rather than being made redundant. Businesses that are forced to close will also be aided by the scheme. In circumstances where staff are unable to work for a week or more, they will still be paid two thirds of their normal wage up to £2,100 a month. This will be covered by the Government and will apply right across the whole of the United Kingdom. Crucially, because the scheme will run for six months, it will give people and businesses the certainty they need. We have intentionally designed the scheme so that there is no gap in support for employees. Staff can remain on the furlough scheme until 31 October and will benefit from the new job support scheme from the following day.
Throughout this crisis, we have not forgotten about the self-employed, which is why we are extending the existing self-employed income support scheme for a further six months. This is in addition to the support through initiatives such as business rates relief, bounce back loans and the local restrictions support grant. For those who question the generosity of the job support scheme, we have looked closely at schemes implemented by our friends in countries such as Germany and Italy, and they are very closely in line.
Importantly, businesses can also access a wide spectrum of other help that we have made available in recent months. As the City Minister, I have been most closely involved in the temporary loan schemes that have been rolled out at pace to meet the needs of businesses large and small and recently extended to ensure that businesses that still want to access them can do so. As of 20 September, more than £57 billion has been provided to businesses of all sizes through Government guaranteed loan schemes.
At the same time, the welfare safety net available to those most in need has become more generous and responsive. Treasury analysis shows that covid-19 welfare changes, together with Government interventions since March, have supported the poorest working households most of all, reducing the scale of losses for working households by up to two thirds. I note the comments made by the hon. Member for Glasgow South West (Chris Stephens), who is no longer in his place, about the continuing need to address carefully the needs of the most vulnerable. The universal credit standard allowance and working tax credit basic element have both been increased by £20 per week for 2020-21, and given the way in which universal credit replaces 63% of lost income for the lowest earners, this means that someone on the job support scheme at 67% of their original earnings will see universal credit make up at least 63% of the 33% they have lost. This will mean that they will end up, in many cases, with nearly 90% of their original income.
Kevin Hollinrake
Can I take the Minister back to the loan schemes, which were delivered at pace and were a fantastic success? Does he agree that we will need a new iteration of those loans scheme to take us through the next phase and that, wherever possible, we should make those loans available to all businesses, regardless of where they hold their business account, including those that hold that account with non-bank lenders?
John Glen
I very much agree with my hon. Friend. That is something that the Chancellor and I are working on as a live issue, and we will report back to the House in due course.
The second element of the winter economy plan is cash grants. Businesses in England that are required to close for health reasons can now claim a grant of up to £3,000 depending on the value of their property. That is a cash grant, not a loan, that they will never need to pay back and they can use for any business cost. Should the devolved Administrations in Northern Ireland, Scotland and Wales adopt a similar approach, we will make an additional £1.3 billion available to them to help—part of a £7.2 billion total package—further demonstrating the importance of the Union as we face these challenges together.
I turn to the third component: local authorities. I pay tribute to the efforts of local authority leaders and their officers throughout the crisis, and I pay particular tribute to my own in Wiltshire. Up to £465 million will be made available to those local authorities at high or very high alert to support public health and local economic initiatives. That is on top of the £1 billion to protect vital services, which itself is in addition to the £3.7 billion we have already provided since the spring.
Let me conclude by saying that, as we have throughout this crisis, we will continue to listen carefully to represent- ations of hon. and right hon. Members on behalf of their constituents, keep the whole of our support package under review and, where necessary, adapt and evolve our response. Members from across the House have made representations today, and the Government will reflect carefully on them.
I vividly recall coming to the House in March, 209 days ago, prior to the launch of the furlough scheme, to answer an urgent question on jobs. The House made its view plain on that occasion, as it has today. We were listening then, and we are listening now. We will do everything possible to carry this country through the crisis, in the knowledge that we can and we will succeed. We need what the Chancellor has called a consistent, co-operative and balanced approach. The Government will continue to strive for that crucial balance, protecting lives and livelihoods flexibly and sustainably for as long as it takes. That is why I urge the House to support the Government amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Sara Britcliffe (Hyndburn) (Con)
On a point of order, Madam Deputy Speaker. This afternoon during Prime Minister’s Questions, the Leader of the Opposition, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), said:
“this morning, the council leaders in Greater Manchester that he just quoted, including the Mayor and the Conservative leader of Bolton Council, said in a press statement that they support a circuit break above tier 3 restrictions”.
The leader of Bolton Council has since clarified that he made no such remarks, nor was the press statement unanimous as the Leader of the Opposition suggested. The press statement also qualified support for a circuit break, which the Leader of the Opposition inadvertently failed to represent. Madam Deputy Speaker, could you advise me on how I can secure a correction from the Leader of the Opposition so that the record accurately reflects the statement made by council leaders in Greater Manchester?
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the hon. Lady for her point of order, and for having given me notice of her intention to raise this matter. I trust that the hon. Lady has informed the right hon. and learned Member for Holborn and St Pancras.
Madam Deputy Speaker
I see that she is nodding, so she has informed him. It is very important for good order in the Chamber that if a specific criticism is being made, the Member being criticised should be informed. That is perfectly in order.
The hon. Lady asks me how she might draw attention to—excuse me, please stay back there. I am addressing the hon. Lady; you have to sit down. [Interruption.] Yes, no matter what is going on in here, it is important that we keep social distance, and are seen to keep social distance, at all times.
The hon. Lady will be well aware that the Chair is not responsible for remarks made and points brought forward by right hon. and hon. Members in the Chamber, nor is it for me to adjudicate as to whether what has been said is or is not accurate—which is fortunate, because that would be a full-time job. However, the hon. Lady has asked me how she might draw attention to the point that she has made, and I would say to her that she has already done so.
Naz Shah (Bradford West) (Lab)
On a point of order, Madam Deputy Speaker. In the spirit of making corrections, this morning during Prime Minister’s questions, the Prime Minister suggested that 93% of the current income of people in pubs and the hospitality industry would be ring-fenced or supported, which is actually untrue and is very confusing for my constituents. I did not have the honour of informing him, but given that Twitter is awash with it, I am sure that he is well aware of this.
Dame Eleanor Laing
First, I must say to the hon. Lady that she heard my answer to the hon. Member for Hyndburn (Sara Britcliffe). This is a matter for debate, not a point of order for the Chair. I have to say to the hon. Member for Bradford West (Naz Shah) that as she was criticising a Member—whoever that Member might be—she ought to have informed the hon. Member that she was intending to do so. Once again, it is a point of debate and it is not for me to adjudicate on the accuracy of statistics, but she has drawn her important point to the attention of the House and, indeed, to those on the Treasury Bench.
Chris Bryant
Further to that point of order, Madam Deputy Speaker. I hear what you say, but my understanding was that you did not have to notify Ministers. Ministers are, as it were, fair game, because they are accountable to the whole House. That has never been the rule that has operated previously and, of course, there is a specific reason for that, because Ministers have an opportunity to correct the record. The Prime Minister, if he wanted to, could correct the record, but as you say, he might spend all day every day correcting the record.
Dame Eleanor Laing
And I might spend all day every day adjudicating between one side of the House and the other, and that is not what I am here for, but I am grateful to the hon. Gentleman for the point that he has made. I am very anxious not to eat into the time on the important motion in the name of the Leader of the Opposition, which we are about to debate.