Economy Update

Anneliese Dodds Excerpts

Thursday 5th November 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

Businesses and workers have been pleading for certainty from this Government, but the Chancellor keeps ignoring them until the last possible moment, after jobs have been lost and businesses have gone bust. The national lockdown was announced on Saturday, many weeks after both SAGE and Labour called for a circuit breaker. The Chancellor ridiculed those proposals for a shorter, more effective circuit breaker as a “blunt instrument”. Just a moment ago, he argued that it was only last week when the Government’s scientific and medical advisers presented data showing that the NHS was at risk of being overwhelmed. SAGE presented that evidence on 21 September, so I will give him the chance now to correct the record and state that actually, the Government knew about that evidence many weeks ago, rather than last week—he can intervene on me if he wishes to correct the record. No, he has not done that. That delay in implementing those measures, we know, has cost livelihoods and lives.

When the lockdown was announced, the Prime Minister said that furlough would be extended for a month, five hours before that scheme was due to end. Two days later, realising that the self-employed had been forgotten, there was a last-minute change to the self-employment scheme. Now there are further changes—the Chancellor’s fourth version of his winter economy plan in just six weeks. The Chancellor can change his mind at the last minute, but businesses cannot. We need a Chancellor who is in front of the problems we face, not one who is always a step behind.

Until last Saturday, hospitality workers in the north had to plan on the basis that they would receive two thirds of their previous income—not 80% or 93%, as I think the Prime Minister said, but two thirds for huge numbers of them, because of this Government’s failure to fix flaws in the social security system. The Chancellor said no to those hospitality workers, only to accept their demands today. Ahead of announcing a firebreak, the First Minister of Wales made workable requests that could have offered support for Welsh workers. Again, the Chancellor said no, only to U-turn now.

Labour argued that Scotland should have access to the furlough scheme should there need to be a national lockdown north of the border. Once again, the Chancellor said no, then the Prime Minister said yes—cue another undignified scramble to accept that demand today. How many jobs could have been saved if this Government had recognised reality and let businesses plan for the future? Will the Chancellor apologise to those who have already been made redundant because of this last-minute approach?

Earlier this week, I called on the Chancellor to use the moment of the national lockdown to set out a proper plan for the next six months. Finally, today, he has indicated that furlough will remain for lockdown areas until March, as Labour called for. Of course that is welcome, but many other questions remain. When will he deliver any information about the retention incentive, which Labour has been warning for months is poorly targeted?

By the time we get to March, it will be a whole year since the first economic support package, but there was still nothing in the Chancellor’s remarks for those people who have been excluded from Government schemes until now. What does the Chancellor say to those groups? Will we face another scramble before the end of March? Can he guarantee that we will avoid such uncertainty then—dependent, of course, on the health circumstances? Other countries seem to be able to plan for the future. Why cannot this one?

What is the future of the phantom funding formula, providing a seemingly arbitrary £20 a head to local areas under tiered restrictions for business support? How long will that support last? What happens when it runs out? When will the Chancellor fix social security, so that it stops penalising the self-employed, homeowners and huge numbers of other workers facing hardship because of problems that could be fixed quickly? What are his Government doing to rectify the problems with the £500 self-isolation payment, so that workers receive it when they need it and are not pushed into debt for doing the right thing?

Above all, when will this Government enable all local areas to deliver the test, trace and isolate system, which we know is more effective than the enormously expensive outsourced national system? The Chancellor needs to stop blaming our NHS, as he appeared to do a moment ago, when it is his Government who are still blocking local areas in lower tiers from delivering a more effective service. Our economy is struggling much more than many other countries’, because this Government simply will not acknowledge that, until they get a grip on the health crisis, they will not be able to deal with our economic crisis. Confidence is indeed key, and that is what this Government need to start delivering.

[Mr Speaker]

We do not have interventions in statements, so if Members are wondering why the Chancellor did not intervene, that is why. It is no problem at all; I am just trying to be helpful.

Lockdown: Economic Support

Anneliese Dodds Excerpts

Tuesday 3rd November 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on economic support available to individuals and businesses during and after the recently announced lockdown.

[The Chief Secretary to the Treasury (Steve Barclay)]

Yesterday, the Prime Minister set out why we are introducing new measures to tackle coronavirus.

--- Later in debate ---

[Steve Barclay]

Thank you, Mr Speaker.

Yesterday, the Prime Minister set out why we are introducing new measures to tackle coronavirus. This decision is not one we would wish to take, but it responds to the soaring infection rate.

Just as we have a responsibility to protect lives, we must also safeguard livelihoods. That is why the Government have provided unprecedented levels of financial support throughout this crisis, in a package described by the International Monetary Fund as

“one of the best examples of co-ordinated action globally”.

This package includes an extension to the coronavirus job retention scheme, where employees will receive 80% of their usual salary up to a maximum of £2,500, while employers need only pay national insurance and pension contributions. We will provide more support to the self-employed. We are increasing the self-employed income support scheme grant from 40% to 80% in November. This boosts the total grant from 40% to 55% of trading profits from November to January, up to a total of £5,160, aligning it with the furlough scheme. In addition, homeowners hit by the pandemic can continue to claim a six-month mortgage holiday, and businesses that are required to close can receive non-repayable grants worth up to £3,000 a month. In total, these grants are worth over £1 billion a month.

We are also planning to extend the existing business loan schemes and the future fund to the end of January, as well as making it possible to top up bounce back loans. Local authorities will also receive £1.1 billion to support businesses more broadly, and up to £500 million to support the local public health message through the contain outbreak management fund. We will also uplift the Barnett guarantee this week to give Scotland, Wales and Northern Ireland further certainty over their up-front funding.

These measures build on the Government’s economic package that now totals over £200 billion. They will provide security to millions of people while giving businesses the flexibility to adapt and plan, and they underline our unrelenting focus on listening and responding to the damaging path of this virus.

[Anneliese Dodds]

Thank you very much for granting this urgent question, Mr Speaker. The circuit breaker that Labour proposed three weeks ago would have been shorter and more effective, so less damaging to jobs and businesses, than the Government’s last-minute, but lengthy, lockdown. The cost of that Conservative delay will be counted in lives and livelihoods, so was it the Chancellor who vetoed the circuit breaker? Why did he tell the Welsh Government that it was impossible to extend furlough, and why did he dismiss those in the north who said his plans would lead to hardship?

I heard from one restaurant about the strain caused by this panicked, last-minute approach. As rumours of a lockdown circulated on Friday, staff wiped away tears before putting on a brave face to customers. They did not know whether, in the following week, they would be working as normal, facing redundancy, being paid at 67% of their normal wages or being paid at 73%.

Similarly, the self-employed endured intransigence and then rumour, before a last-minute announcement yesterday that still leaves many people with nothing. Businesses need to know what support they will receive if their area faces further restrictions on the other side of lockdown, but the Prime Minister said yesterday that they will not find out until just before those restrictions are imposed.

How can any business plan on that basis? How can people cope with that level of insecurity? The lack of any plan for economic support is making a very, very difficult situation even worse. Will the Chancellor and his Ministers finally get a grip, and set out the plan for the next six months? Will they indicate how the different scenarios facing us will be dealt with, not retrospectively, or at the last minute, or once businesses have gone bust and jobs have already been lost, but in advance? Will they set out a plan for support if the lockdown is extended, or if some regions or devolved nations remain under restrictions for longer? Finally, will I continue having to drag Government Ministers here week after week as this Government stumble from one crisis to the next?

[Steve Barclay]

The hon. Lady started by saying that the circuit breaker would have been shorter, but those on her Front Bench have repeatedly said, when interviewed, that a circuit breaker would have to be repeated.

The deputy chief medical officer was clear that an earlier national lockdown would not have been appropriate, because at the time, the path of the virus was very slow in certain areas, such as the south-west, so the economic damage would have been disproportionate. I might have expected to hear the hon. Lady’s argument from some Members of the House, but it is surprising that the economic spokesperson for the Opposition was willing to see that economic damage. [Interruption.] She chunters, but I am simply quoting the deputy chief medical officer, whose advice was that a lockdown would have been the wrong action to take at that time. I am pointing to economic damage, which she seems to see as trivial and something to be disregarded.

The hon. Lady then claimed that the Government had in some way dismissed certain parts of the United Kingdom. I gently point out that furlough was not ended; it continued to the end of October, and has now been extended. Furlough has continued in all parts of the United Kingdom without any gap in its provision.

The hon. Lady asks whether the Government have a plan in place. My right hon. Friend the Chancellor came to the House on 24 September to set out our winter plan for jobs. It included the kickstart scheme, which is up and running, and provides much-needed training to our constituents across the country. While setting out his winter plan, he said candidly that if the pathway of the virus changed, the Government would listen and adapt, and that is exactly the action that we have taken.

Finally, somewhat strangely, the hon. Lady said that she needs to “drag” Ministers to the Chamber to set out their approach. [Interruption.] She is repeating the point. Mr Speaker, I thought the Prime Minister was here yesterday to give a statement to the House. It is somewhat strange to say, the day after he did that, that Ministers have to be dragged to the Chamber to give updates on the position.

Covid-19: Economy Update

Anneliese Dodds Excerpts

Thursday 22nd October 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

For months, we have urged the Chancellor to get ahead of the looming unemployment crisis and act to save jobs. Instead we have had a patchwork of poor ideas rushed out at the last minute: a bonus scheme that will pay £2.6 billion to businesses that do not need it; a job support scheme that simply was not going to work for the majority of businesses under pressure and that we said at the beginning did not do enough to incentivise employers to keep staff on; and an approach to support for areas entering tier 3 that has been nothing short of shambolic.

This has had real consequences. The deadline for large-scale redundancies came and went before the Chancellor announced the job support scheme, the deadline for small business redundancies passed before he realised that he needed to amend it, and many parts of our country have spent months under tier 2 restrictions without adequate support. How many jobs have been lost because of that inaction? Over a million have already gone. In the last quarter, we saw a record rise in redundancies. The Chancellor could have done much more if he had acted sooner.

Now we see yet another last-minute move. Let me ask the Chancellor. What has changed that means that this is the right thing to do now but it was not when parts of the north and midlands entered tier 2 many weeks ago? Does he agree with his own Mayor for the west midlands who said that

“this particular point was just one that was completely missed”.

Completely missed was the need for support for tier 2 areas. The Chancellor has only caught up and listened to the anxiety of workers and businesses when it looks like these restrictions will be affecting London and the west midlands. Will he apologise to those who have already lost their jobs and seen their businesses slip through their fingers in those areas that have not had that support until now?

The Chancellor referred to £1 billion of generous up-front grants for businesses and jobs provided in a “fair and transparent way”. There has not been a system of up-front grants for those in the north and midlands, and the process has not been fair and transparent for businesses and workers. To be honest, it is nothing short of insulting to describe what we have seen over the past few weeks as fair and transparent. The Government still have not published the formula that has been used for business support in tier 3 areas, and they still seem addicted to the approach where they say they are in negotiations with different areas but the reality is something completely different. When will he come clean about that support and the formula that is being used?

Will the Chancellor also make good on his Government’s claim that the JSS extension will be topped up to at least 80% for workers facing hardship? I know this is difficult for the Government. I see that the Prime Minister is sitting next to the Chancellor; he thought it would be topped up for everyone to 93%. I think that is what he said. Clearly the Government are not very sure on this, so maybe I can spell it out for them. That support does not amount to 80% for huge numbers of workers facing hardship—for example, those who have modest savings or who are excluded for other reasons, as so many are—and they have to wait five weeks anyway before they get that help. That could be fixed speedily by the Government, but they are refusing to do so. Does the Chancellor also recognise that those fixes for social security must apply to the self-employed, for whom an increase to just 40% of their previous income will not stave off hardship—and that is not to mention those who have been excluded throughout.

This is becoming like a long-running television show: the winter economy plan, series 3. But the twist is that it did not last the winter, it did not do enough to help the economy and it was not a plan. We have to get ahead of this crisis instead of always running to keep up. That is why Labour has called for a national circuit breaker to give us a chance to reset and to fix the broken test, trace and isolate system, but time is running out to implement that circuit breaker so that it includes half term and maximises the opportunity it brings. Will the Chancellor change course?

[Rishi Sunak]

This is the third time I have come to this House in several weeks to outline additional support for the economy, jobs and livelihoods. It is a sign of the seriousness of the economic situation we face, and I will never make any apology for acting fast as the moment demands and as the health situation evolves. But at the heart of this debate is a more fundamental difference on the right approach for protecting livelihoods and lives. We on this side of the House believe it is right to be honest about the hard choices we confront and about the fact that there is no easy cost-free answer. With every restriction comes difficulty, and that is why we are doing everything we can to strike that balance between saving lives and protecting livelihoods.

We have made progress, and that is why we are now able to operate a localised, tiered approach. That is why, even now, in the most affected areas we are striving to keep businesses open, and that is why the support I have announced today is as generous as it is, to give as many businesses and employers as possible the opportunity to keep working and keep trading. All this progress and all this hope are being put at risk by Labour Members’ repeated calls for a damaging, blunt, national lockdown. They will not say for how long, but they have already admitted that it would roll on with no clear end in sight. They will not say how many jobs would be lost through such a national lockdown. They claim that their approach—an indefinite series of national on-off lockdowns—would be better for the economy. I am afraid the facts simply do not support that conclusion.

The policies we have outlined today strike that balance. They support our approach—a localised, regional approach that is striving to get that balance between protecting jobs and protecting livelihoods. They will support people in every region and nation of this United Kingdom. They will protect people’s jobs. They will support their incomes and provide their families with security and with hope for the future.

Throughout this crisis, I have always stood ready to work with all hon. Members in every business group, industry group and trade union to work through solutions and deal with this crisis. While the situation evolves and the challenges change, my approach will not—to build consensus, to reach out to those with different views, to work past tribal political point scoring and to support our country through this moment of immense challenge so that we come out on the other side a stronger, more United Kingdom.

Additional Covid-19 Restrictions: Fair Economic Support

Anneliese Dodds Excerpts

Wednesday 21st October 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I am grateful to everyone who has participated in this debate. There have been a number of fantastic contributions, particularly from Opposition Members. I am sure there would have been many more if we had had time. Running through all the contributions, including those from the Government Benches, are three questions that the Government seem absolutely determined not to answer. I hope they finally will do so in the next 10 minutes.

The first question is about this phantom framework. It is not Halloween yet, but it feels like we are already there with this phantom framework. The Housing, Communities and Local Government Secretary said there was a framework for support for jobs and businesses in tier 3 areas, and he said that the framework offered £20 per head. If that framework is there, why have the Government not published it? Why will they not put it in front of us? Why will they not write it down anywhere so that we can see it? Why will they not let us vote on it? I know the reason why. They will not do that because they know it has not always been used—I will come back to that point later—but also because they know that it is iniquitous. There is no reason why only a per capita formula has been used. For example, we could be looking at the length of time that areas have been under restrictions. We could be looking at the number of businesses impacted, the number of workers impacted, the extent of deprivation or the extent of low pay, as my hon. Friend the Member for Manchester, Withington (Jeff Smith) set out so ably. Why are the Government so secretive about this phantom framework, and why are Conservative Members letting them get away with it?

Leicester, for example, was not covered by that phantom framework. It received less than half the business support that other areas have received. Here is the rub—the rub we all know about, but which Conservative Members do not seem willing to stand up to. If that phantom framework was in place all the time, why on earth have we had the spectacle of these one-sided negotiations? As my hon. Friends the Members for Chesterfield (Mr Perkins) and for Ashton-under-Lyne (Angela Rayner) have said, the Government are picking regions off one after the other. It has been an iniquitous mess over the last couple of weeks, and it is getting messier day by day. The Chief Secretary said today that Barnett consequentials are going to be used for this phantom formula. Are they? Again, is that written down anywhere? I cannot see it. He made reference to funding announced by the Prime Minister, but we still have no detail on that funding for local government, with no indication of how it will be allocated and no indication of when it will arrive. We still know nothing about what has happened to the £1.3 billion underspend on the business grants programme. That could be used right now to support businesses that are struggling, but the Government are refusing to do so. The first question—and I would be really grateful if the Government finally answered this—is: why will they not be open about the phantom framework, when will they publish it, when will they let us vote on it and when will they stop this absolute chaos?

The second big question is: why will the Government not be open about the job support scheme extension and the fact that, alongside universal credit, it often will not prevent hardship at all? The Mayor of Greater Manchester and other local leaders are absolutely right to highlight this. The Government have been all over the place on this issue. The Prime Minister actually had to correct himself because he got it wrong. Again, the Chief Secretary mentioned some examples today, but I think we all noticed that he left some critical bits out of those examples, did he not? There is the fact that people have to wait for five weeks before they get that support, that they will not get it to the same extent if they have saved above £6,000 or, indeed, that it is dependent on their partner’s circumstances as well. My hon. Friends the Members for Makerfield (Yvonne Fovargue) and for Liverpool, West Derby (Ian Byrne) ably set that out. Those exclusions can be fixed to make a reality of what Government figures have said, rather than just the rhetoric, but the Government are refusing to do this. They could switch the initial grant into a loan in universal credit, they could remove the savings threshold and they could push local housing allowance up to median rents. Why will they not?

The third question that this Government are running away from is: why do they already seem to accept the failure of JSS—not the JSS extension, but JSS—even though it has not even started? I thought it was highly instructive that, when discussion about support for businesses in tier 2 areas came up during this debate, neither the Chief Secretary nor indeed any Conservative Members mentioned the JSS. It seems as though the Government have already factored into their plans the failure of that scheme. My hon. Friends the Members for Halton (Derek Twigg), for Birmingham, Ladywood (Shabana Mahmood) and, indeed, for Swansea East (Carolyn Harris) spelled out very clearly the implications of that failure and that of the new version of the self- employment income support scheme for their constituents.

While we have all been sitting in this Chamber, we have received the news that the Chancellor is coming tomorrow—he is coming tomorrow—to make an economic statement. I say to him: seize this chance. He should seize this chance to fix the JSS so that it actually supports jobs rather than doing so little to stem the tide of unemployment, and seize this chance to support workers facing hardship under JSS-plus—the JSS extension. He should also sort out this support for tier 3 areas and end this appalling charade. Finally, in the time I have left let me just say that the last thing the Chancellor needs to do tomorrow is to get with the programme—the programme of what his Prime Minister has said—because the Prime Minister said that he would not rule out a circuit breaker as he knows that the science supports one.

We all know in our heart of hearts, as we have heard time and again from Government Members today, that the system of rolling regional restrictions is hammering our country’s economy but not doing enough to get the virus down. The only alternative is a circuit breaker. Research shows that failing to implement a circuit break to fix test, trace and isolate could cost our economy £110 billion. Tomorrow, the Chancellor must come here and act now to get a grip on this virus and save lives and livelihoods.

Oral Answers to Questions

Anneliese Dodds Excerpts

Tuesday 20th October 2020 Commons Chamber

[Rishi Sunak]

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

[Rishi Sunak]

[Anneliese Dodds]

[Rishi Sunak]

Covid-19 Economic Support Package

Anneliese Dodds Excerpts

Wednesday 14th October 2020 Commons Chamber

[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.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

May I intervene?

[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—

[Cherilyn Mackrory]

I have.

[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.

[Neil O’Brien]

rose—

[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.

[Mr Toby Perkins (Chesterfield) (Lab)]

Will my hon. Friend give way?

[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.

[Angela Richardson (Guildford) (Con)]

Will the hon. Lady give way?

[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.]

[Ms Angela Eagle (Wallasey) (Lab)]

Shut up!

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Public Health Restrictions: Government Economic Support

Anneliese Dodds Excerpts

Tuesday 13th October 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on economic support available to individuals and businesses in areas of the country subject to additional public health restrictions.

[The Chief Secretary to the Treasury (Steve Barclay)]

Yesterday, the Prime Minister and the Chancellor set out further measures to support local authorities through the crisis. On Friday, the Chancellor set out how we will support jobs in every part of the UK through an extension of the job support scheme, and these announcements build on the Chancellor’s September statement on the winter economic plan.

Throughout the pandemic the economic policy focus has been clear—to save jobs. Last month, we set out our plans to help viable businesses that can open through the job support scheme. However, businesses that are required to close due to coronavirus restrictions will also need our help. On Friday, the Chancellor announced the expansion of the job support scheme. Where coronavirus restrictions legally require business premises to close, we will pay up to two thirds of an employee’s salary, up to £2,100 a month, if they cannot work for a week or more. The scheme is nationwide and will run for six months.

In addition, businesses in England required to close will be eligible for a non-repayable cash grant of up to £3,000 a month. This can be used for any business costs. On Friday the Chancellor and I agreed with the First Minister of Wales, the First and Deputy First Ministers of Northern Ireland and the Finance Minister of Scotland on this additional package of support. We have now also guaranteed an extra £1.3 billion of funding to the Scottish, Welsh and Northern Irish Administrations if they decide to do something similar, bringing total guaranteed Barnett funding for this year to £14 billion.

In addition, as announced yesterday, we are providing local authorities in England with around £1 billion to protect vital services, and up to £500 million for local authorities at high or very high risk.

These measures build on the Government’s economic package, one of the most generous in the world, and underline our unwavering commitment to the people of this country.

[Anneliese Dodds]

Just over a month ago the Conservatives passed a motion in the House stating that

“any deviation from this Government’s proposed plan will cause damage to the United Kingdom economy.”

The first deviation came two weeks later when the Chancellor announced his sink-or-swim job support scheme, design faults in which are already leading to substantial and unnecessary job losses. The second deviation came as a belated response to the imposition of localised restrictions announced on television last Friday, with further measures announced yesterday—yet Leicester, for example, has been under localised restrictions for over 100 days. The Chancellor told us to learn our new limits as we go. His handling of the economic crisis is testing patience to its limits, especially the patience of those whose jobs are threatened.

The Government must answer many critical questions, but here are just three: first, why will local areas be provided with support for test, trace and isolate only once they are already in tier 3? This is indefensible. Secondly, there is £1.3 billion-worth of unspent local grants. Why will not the Government allow this money to be used to support local businesses in affected areas? Thirdly, why are workers in closed businesses expected to face poverty as a result of the businesses they work for doing the right thing?

[Steve Barclay]

It is slightly odd that Opposition Front Benchers talk about deviation when their position has deviated as much as it has, not least on the curfew, which they said they would support yet refused to.

On the hon. Lady’s points of substance, the package of support announced by the Chancellor and Prime Minister did support local authorities with an additional £1 billion, as I said in my opening remarks, plus a further £500 million to address trace and trace locally, reflecting the fact that the Government are listening to local leaders and bringing forward responses. We saw that with the additional funding allocated to Merseyside and to Scotland, Wales and Northern Ireland—again reflecting our listening in conversations with the First Ministers of Scotland, Wales and Northern Ireland.

The hon. Lady makes a fair point about underspends that has been made by a number of colleagues. She is right to point to the sheer extent of support that we have offered, including the grants of £10,000 and £25,000. To deliver them at pace, they were allocated on the estimations that we had. As a result, the actual spend that has been required has led to some local authorities having very big underspends and others not. If we were to say that the authorities where the estimates were incorrect should benefit disproportionately, we would be accused of treating some unfairly compared with others. We met the need that was addressed at that time through the awards.

It is right from a fiscal point of view that the underspends are returned because they are surplus to the requirement on which they were allocated. In last week’s urgent question issues were raised by Merseyside Members, and ministerial colleagues engaged, listened and the funding for Merseyside more than doubled per head.

It is a slightly odd line of attack for the Opposition to say that we should not bring back underspends where they met their need but the estimations were inaccurate, yet not use the money to respond to the legitimate needs of areas such as Merseyside and elsewhere that are being moved into tier 3.

Areas with Additional Public Health Restrictions: Economic Support

Anneliese Dodds Excerpts

Tuesday 6th October 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on economic support available to individuals and businesses in areas of the country subject to additional public health restrictions.

[The Chief Secretary to the Treasury (Steve Barclay)]

The decision to extend tighter lockdown measures to Liverpool city region, Warrington, Hartlepool and Middlesbrough was based on the latest health evidence, including advice from the chief medical officer and local public health authorities. The resurgence of the virus has demanded further action to minimise harm to health and wellbeing, while preserving the ability of people to work and businesses to trade in the areas affected. That is why, throughout this crisis, we have sought to strike a balance between minimising the burden faced by businesses and protecting public health. To that end, we have provided one of the most generous and comprehensive packages of support for people, businesses and public services, totalling £190 billion by July.

As the path of the virus and the threat to the economy have become clearer, we have taken further decisive action. Last month, the Chancellor announced the winter economic plan—a package of targeted measures to protect jobs and businesses, including the job support scheme to support the wages of employees in viable jobs and an extension of the self-employed income support scheme to the end of April 2021. We are also continuing the temporary reduction in VAT for hospitality until the end of March 2021 and the Government-backed loan schemes until the end of November this year. We are also providing an additional £100 million in surge funding to support the hardest-hit areas in containing covid-19. That is on top of the £300 million provided through the test and trace programme. We are offering grants to businesses that have been required to shut because of the new measures, worth up to £1,500 for each three weeks of closure.

Throughout this pandemic, we have prioritised a flexible and adaptable approach to economic support. We will continue in that spirit, and we stand ready to evolve our policies as required.

[Anneliese Dodds]

Thank you, Mr Speaker, for your courteousness and patience, as always.

Seventeen million people—one in four of us—are living under additional covid-19 restrictions. That was not inevitable: experts agree that it is linked to the continuing failure to deliver a functioning test, trace and isolate system. That failure has profound economic consequences and puts businesses and jobs at risk. Today, nearly 1 million people are still on furlough in the areas of the country that are subject to local restrictions or are on the watch list.

Support for local areas has only ever come after restrictions have been imposed—for example, a month later in Leicester’s case. There are leaked suggestions that the Treasury will be involved in decision making around restrictions, potentially to prevent such delays. When will the Government finally be in a position to deliver support hand in hand with the imposition of restrictions, not trailing them?

The response has been inconsistent: £3 million for Leicester, £7 million for Liverpool city region, an undefined funding package for the north-east of England and nothing for Greater Manchester or the west midlands. What criteria determine the allocation of support to areas under local restrictions? Will they be published? If not, why not? Do they truly reflect the needs of areas subject to restrictions? I note that the Chief Secretary did not talk at any point in his statement about support for areas with economic needs, not health needs. He referred to the local restrictions support grant, but can he confirm that no area currently qualifies for that grant because of current restrictions?

The millions of people living under local restrictions deserve better. When will the Government grasp the scale of the challenge and act to recover jobs, retrain workers and rebuild businesses?

[Steve Barclay]

The shadow Chancellor almost implies that the resurgence of the virus is unique to the United Kingdom, yet anyone who looks across the continent will see that many other countries, as we come out of the summer period, are seeing exactly the same trend and are dealing with it in in many of the same ways as we are in the United Kingdom.

The hon. Lady says that support has not been offered to those suffering from economic harm, but that ignores, for example, the announcement that I made in the Chamber some weeks ago about the £1,500 of support for businesses for every three weeks of closure as the result of a local lockdown—[Interruption.] Hon. Members should let me answer, rather than chuntering from a sedentary position.

The hon. Lady also ignores the fact that my right hon. Friend the Chancellor has extended many of the measures that we introduced in our initial response, including the package of loans, the tax deferrals and pay as you grow. Those are universal offers to support businesses, irrespective of whether they are in areas of acute lockdown or otherwise.

As I said at the start, and as my right hon. Friend the Chancellor said yesterday, we will keep listening, and we will keep striving to be creative in response to the challenges that we face. Where we can, he will act. That shows our willingness to adapt. The package of measures that my right hon. Friend the Chancellor brought to the Chamber just a few days ago, with the winter plan, illustrates that willingness to listen, to evolve and to respond to the virus, as the economic needs of the country dictate.

The Economy

Anneliese Dodds Excerpts

Thursday 24th September 2020 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I thank the Chancellor for his statement and for advance sight of this announcement. I have called for the introduction of a system of targeted wage support 40 times. That call has been rebuffed by the Government 20 times. It is a relief that the Government have U-turned now, but we must be open and honest: that delay in introducing this new scheme will have impacted on businesses’ confidence. I know that from talking to them, and I am sure that Government Members know that from talking to businesses in their constituencies.

The deadline for redundancy consultations by large firms before the end of the furlough scheme came and went last week without a word from the Government. If the package of measures announced today can help people keep their jobs and help businesses through hard times, Labour will of course support it. There is much in the statement that we do support—as I just said, we have repeatedly called for a system of targeted wage support, and we have called for help for indebted, cash-strapped businesses over and over again—but we must ensure that these measures are as effective as possible at keeping workers in employment, getting unemployed people back into work and keeping viable businesses in operation.

As with many previous announcements by the Government, we must wait for the detail to be revealed—presumably following the press conference scheduled for later on today. Workers and businesses are hanging on the Chancellor’s every word right now, and they need to know what is promised here. So can the Chancellor be clear: will the wage support scheme actually keep more people in work? For that to happen, the scheme must make it more attractive for employers to retain more staff on reduced hours than to retain some full time and make others redundant. Does his scheme actually incentivise short-hours working?

What conditions, if any, will be applied to ensure value for public money? Will the scheme require commitments to continuing employment, unlike the existing furlough scheme, where there have been abuses? Will it require those participating to provide decent, sustainable work?

Will the scheme incentivise training and retraining? The German scheme does, and Labour has called for a UK version to include incentives for training, but that is missing here. Indeed, while, as I said, we welcome many of the elements that the Chancellor has announced, the lack of action on training and skills is worrying. I was waiting and waiting for the Chancellor to talk about training. He mentioned the word once, in passing. That is not enough. His Government have already allocated funding for a national skills strategy, but it is not being delivered on the ground. When will the Chancellor get serious about training so that people can be ready for the jobs of the future? He mentioned the fact that our economy is changing. Let us make sure that our population is ready for that change.

Labour has called repeatedly for continued, targeted support for the self-employed, so I am pleased that that is referred to here, but will these measures avoid the gaps in coverage that have bedevilled existing schemes? Why is there no forward plan for the needs of those who are extremely clinically vulnerable to the disease? Belatedly, will the Chancellor do more to demand that his colleagues get a grip on the UK’s public health crisis? Our country is suffering from a double tragedy: the highest excess death rate in Europe and the deepest recession in the G7.

Labour supports the Government in their announcement of additional restrictions this week. The Government’s messaging has been confused enough already, so the last thing we want to do is add to that confusion, but we are concerned that these restrictions are necessary only because of continuing problems with test, trace and isolate. The Chancellor referred to the money put into test, trace and isolate. As I said earlier this week, enormous sums have been devoted to that task, but those sums are not delivering the system that we need. We are still not at the stage of many other countries. The Chancellor must work on that, as well as his other colleagues in Government.

Finally, before the summer recess, Labour called for a back to work Budget focused on jobs, jobs, jobs. We did not get one. We expected a Budget this autumn. It appears, again, that we are not getting one. That is despite the challenges it poses for devolved Governments, and despite the fact that the Government have actually referred to provisions in a future Finance Bill as necessary for their approach to Brexit. The Chancellor announced that he would make a statement to Parliament today only after I had called for him to come here to answer an urgent question; I am very grateful to you, Mr Speaker, for granting that.

This Government have lagged behind on test, trace and isolate. They have lagged behind on wage support. They have lagged behind on support for those having to self-isolate. They are lagging behind on green investment. For these and for other reasons, it looks like our recovery will be lagging behind that of many other countries. So, finally, when will the Chancellor provide the back to work Budget that this country needs?

[Rishi Sunak]

I thank the hon. Lady for her comments. On the question of continued support for jobs, however, I had hoped that she would have welcomed strongly today’s measures, if for no other reason than that she has previously asked for something similar. However, her position on this matter has been somewhat changeable. At different points in the last few weeks and months, she has said that furlough should not go on for ever, and then changed her mind and said that we should extend it. Then she changed her mind and said it should be replaced, and then only yesterday the Leader of the Opposition said it should be extended again. That is not the kind of certainty that British businesses or British workers need.

To address the specific questions, this scheme absolutely does incentivise shorter time working. The company will pay its workers for the time that they are in work, and the Government and the employer jointly will subsidise the time the worker is not working. The conditions will be set out in guidance, which will be published shortly, and then over the next few weeks the further details will be worked through with businesses and unions, as we did with the furlough scheme.

I can reassure the hon. Lady that the new scheme does indeed have the conditionality that is appropriate for this stage of our response. Notably, this scheme will be available only for larger companies that are seeing a decline in their revenues as a result of coronavirus, ensuring that our support is targeted where it is most needed. Similarly, there will be restrictions on larger companies in capital distributions to shareholders while they are in receipt of money for their workers under this scheme. Indeed, they will not be able to give redundancy notices to those workers who are on this scheme throughout its duration.

We have increased training both for post-16 at the Budget and, indeed, in the recent plan for jobs, providing increased access for school leavers to level 2 qualifications across the board. Notably, one of the hallmarks of our skills system is our successful apprenticeship programme. What we announced in July was a significant increase in the incentive payment to businesses for taking on a new apprentice: a £2,000 cash incentive to businesses to take on an apprentice and provide that valuable in-work training that we know makes such a difference to young people’s futures. So we are committed to providing especially our young people with the opportunities that they need to succeed in the future.

The hon. Lady talked about jobs. In July, we outlined a £30 billion plan for jobs—to support, create and protect jobs across every part of our United Kingdom. Chief among the initiatives was the kickstart scheme, where right now employers—small, medium-sized and large—are rushing to put in applications to take on a young kickstarter later this autumn, to provide them with the opportunities that they need at an incredibly difficult time. I can assure this House and the country that my No. 1 economic priority is to protect people’s jobs, and that is what this Government will continue to do.

In conclusion, the Opposition wanted the furlough extended, but they never said for how long. Then they wanted the furlough replaced, but they would not say what with. Then they wanted the furlough targeted, but they would not say on whom. I do stand ready to work with the hon. Lady, if she knew exactly what she wanted. Today, the Government stand with the British people and British business, with the CBI, the British Chambers of Commerce and the Trades Union Congress, in bringing much-needed support to the economy. Yesterday, the Leader of the Opposition called for a plan B for the economy. The Labour party does not even have a plan A.

Oral Answers to Questions

Anneliese Dodds Excerpts

Tuesday 15th September 2020 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right. Manufacturing and exports, especially from the west midlands and the Black Country, will play a key part in driving our recovery. I am pleased to tell him that the Exchequer Secretary is shortly meeting with the Mayor, Andy Street. That comes on top of our plans to provide £1 billion to develop the UK supply chain for electric automotive vehicles over the next five years, and £850 million of allocations from the local growth fund for his region.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

The Chancellor will be aware of concerns that the UK risks a slower recovery than comparable economies for self-inflicted reasons. Despite the devastating impact on jobs, the Treasury Front Benchers have yet again today—six times—rejected targeted wage support. Economists are concerned about this Government’s inability to get a grip on the public health crisis, which evidence from the Scientific Advisory Group for Emergencies suggests stems in part from a failure to adequately support people who have to self-isolate. Rumour has it that the Chancellor is blocking attempts to improve sick pay, so I put it to him: can he put himself in the shoes of those low-paid workers who often have to choose between paying their rent and bills, and putting food on the table for their kids? If these workers are advised to self-isolate, they get £95.85 a week—and that is if they are even eligible for statutory sick pay. Surely the Chancellor must agree with the Secretary of State for Health that statutory sick pay is not enough to live on.

[Rishi Sunak]

From the beginning of this pandemic, we have made changes to the operation of statutory sick pay and our welfare system to ensure that those who are isolating in any circumstance receive support from day one, and that we improve flexibility, particularly for the self-employed, through the removal of the minimum income floor. As the hon. Lady knows, we are also trialling incentive payments in local lockdown areas.

[Anneliese Dodds]

I did not ask the Chancellor about the precise details of delivery and I did not ask about the scope; I asked him about the value of statutory sick pay. He needs to get a grip on this issue. If he fails to do so—and the blockage appears to be his responsibility—then we will see additional localised re-impositions of lockdown, with all the implications that has for jobs and businesses. Please, Chancellor, get a grip on this issue.

There are two other reasons why economists are worried about the UK’s recovery. First, of course, there is concern about our future as a trading nation. Both of the Chancellor’s predecessors warn that the threat to override the withdrawal agreement could damage our country’s reputation and prosperity. Why do those former Chancellors appear to be more concerned about our country’s economic prospects than the current one? The second reason for concern stems from the prospect of premature spending cuts or tax rises. According to the Financial Times, it is politics that could drive the Chancellor towards early tax rises, so will he rule them out for the rest of this year?

[Mr Speaker]

Order. I do want the Chancellor to answer, but we will have to shorten the questions.