Caroline Nokes
Main Page: Caroline Nokes (Conservative - Romsey and Southampton North)Department Debates - View all Caroline Nokes's debates with the HM Treasury
(1 day, 7 hours ago)
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Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. In the region of 10 Members wish to speak. If they restrict themselves to about five minutes each, I will probably get everybody in.
Esther McVey
I do not believe the evidence proves that. We can look to other parts of the world where that was not the case.
This policy had unwavering and enthusiastic support from across the House, with just a few of us in this House —too few—raising valid concerns, but we were shut down. It should be obvious that some people cannot be damaged in the name of protecting others with interventions such as lockdowns that we do not even know will work. The moral mathematics never added up.
And now we must live with the consequences of what we did. We spent in the region of £400 billion on the covid-19 response—a vast sum that will be clawed back through increased taxation and hardship for generations to come. Of course, the Conservative party had to put up taxes to pay for that £400 billion, and it was voted for by pretty much every Member in the House. For me, such a statist, socialist intervention would never work, and that is proving to be the case.
Those businesses that did manage to survive after everything that was thrown at them in the name of covid are now having to face more gloom and doom from this socialist Government in charge of our country, with their two tax-rising Budgets and their removal of business rates relief without understanding it—
Madam Deputy Speaker (Caroline Nokes)
Order. The subject of the debate is financial support specifically during the covid pandemic. The right hon. Lady might want to make sure she stays within scope of that.
Esther McVey
Thank you, Madam Deputy Speaker. I added on that sentence because I felt it was very relevant that those who did manage to survive the pandemic are now not surviving, because of the extra taxes that are being put upon them and the removal of business rates relief that was introduced during covid, and it seems that the Chancellor does not even know how that works. Those businesses are suffering twofold, because some of that covid benefit is now being removed. It is no wonder Labour MPs are being banned from pubs, as we see mass closures of pubs.
I simply ask that we examine the bigger picture. Those 3.8 million people who were excluded from financial support suffered a terrible injustice, but so too did those who received support, because lockdown took from everyone: children denied education; mothers forced to give birth alone; people suffering heart attacks, strokes and sepsis but too frightened to burden the NHS; bereaved families unable to mourn the dead—the list of injustices goes on and on. None of it should ever have happened. The costs were always going to be too high, and worse, there appears to be no evidence that lockdown prevented covid infections.
The covid inquiry recently made two incredible assertions. One was that lockdowns were harmful but should have started earlier, and the other was that the modelling should not have been used to justify major policy but simultaneously proved that 23,000 lives could have been saved. Finally, lockdown was, as Professor Sunetra Gupta from the University of Oxford said—
Madam Deputy Speaker
Order. The debate is not about lockdown; it is about financial support. I hope the right hon. Lady is concluding her remarks.
Esther McVey
I am concluding my remarks. I am pleased to have been able to speak today as one of a handful of 650 MPs who stood by “the Forgotten Ltd” and by many of our constituents whose businesses went out of business. I was one of the few in the House who stood up for them.
Finally, as Professor Sunetra Gupta said, this was like taking a hammer to a fly on a pane of glass: you might or might not kill the fly, but you definitely shatter the window. It will take us a long time to pick up the pieces. Next time we face a similar crisis, let us not panic and reach for the hammer.
Andrew Cooper
The Chancellor of the Exchequer has done exactly the right thing by setting up the covid corruption commissioner. During the pandemic, there were those who saw it not as a moment of national emergency in which we should all get together, but as an opportunity to line their own pockets. The Chancellor is doing exactly the right thing by trying to root out those people and make sure that they suffer the consequences.
We cannot change what happened, but we can choose what happens next. Let us learn the lessons from past schemes that left too many people excluded, and move forward by building systems that protect everyone. Let us ensure that in any future crisis, we never again leave millions to face hardship alone. What specific steps will the Government take to ensure that any future emergency financial support schemes are designed with the flexibility, fairness and real-world applicability needed to prevent millions from ever again being excluded in their moment of greatest need?
Madam Deputy Speaker (Caroline Nokes)
There will now be a formal four-minute time limit.
Euan Stainbank (Falkirk) (Lab)
In the early days of the pandemic, the country came together in the worst of times, making unprecedented sacrifices in all of their lives so that they could collectively fight the pandemic and save lives. The pandemic also put the structure of governance and our public finances under extreme strain; there were undoubtedly difficult—sometimes impossible—choices that had to be made. Such is the responsibility of government, but as the covid inquiry and many of our constituents have told us, there were people who were failed.
Financially, individuals and small businesses in my constituency and—as we have heard powerfully—across the country found themselves excluded from support, as their lives did not map cleanly on to the fantasy of seamless transition from workplace to workplace and from business to business. They were told that their circumstances meant they did not qualify. They included new businesses, the newly self-employed, freelancers, those on parental leave, and company directors of small businesses who received their income from dividends and a salary, to name just a few. That point has been made powerfully by several Members, especially my hon. Friend the Member for Montgomeryshire and Glyndŵr (Steve Witherden).
Those who were in the most precarious employment were also hit hardest, with job opportunities limited. We saw youth unemployment spike during the pandemic, from 12.4% immediately before the lockdown to 15.2% only four months later. Many of those young people were made unemployed because of the high turnover and insecure nature of their workplaces—they were not on the payroll when 19 March 2020 came around. Just before the first lockdown, I and many other students were working seasonally in the hospitality sector, on zero-hours contracts, taking time off during February and March to complete the honours levels of our degrees. We expected to return to work that summer alongside pursuing our careers, but we were not given any support during the pandemic and found that our employment opportunities were limited, with no furlough available.
There was no restitution for the loss of income and opportunity many young people faced during the pandemic. The impact was that the generation most likely to be employed in those casualised or ad hoc employments were set back. Plans to move out of home, pay off their student loans and begin a career—the proof points of a successful journey through our economy—were delayed. For many, survival became the predominant need; the desperate need to pay their bills, feed their kids, and survive through any means possible. Although the pandemic was hopefully a once-in-a-lifetime event, this Government must be prepared for any such eventuality. What I have described is a good reminder of the harm of balancing the labour market in one direction.
One constituent who got in touch with me about this issue was a company director who was paid in dividends and a small salary, and who received no support because of that gap. They pointed out that not only was the lack of support hugely challenging, but colleagues and competitors in the same industry with a clearer definition of self-employment did receive support and were provided with a significant competitive advantage, which continues to this day. That is harmful to the economy, and is an injustice to my constituent and limited company directors like them. Years later, people feel like they are still trying to tread water with a weight chained to their ankle as they maintain businesses while paying back extensive loans that they took out to bridge the pandemic’s severe impact on their business.
I commend the Government on the very good work they have done to identify the clear waste and instances of fraud that occurred during covid. The covid corruption commissioner identified £10.9 billion in losses due to weak accountability, bad quality data and poor contracting under the previous Government. We can go further, and I would welcome an acknowledgement from the Minister that better design in the previous Government’s schemes could have averted those losses. That money should and could have been spent on deploying support that would have unchained many people, including my constituents, from the extensive consequential impacts they went through at the time. Those impacts should be recognised through a clear and unambiguous statement of support for those people by delivering an apology on behalf of the British state.
I commend the campaigners at ExcludedUK and its supporters, who have been relentless in advocating almost six years on from the start of the pandemic. They are fighting every day, chained financially to the circumstances caused by the pandemic—
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I refer Members to my entry in the Register of Members’ Financial Interests. I thank the hon. Member for Stratford-on-Avon (Manuela Perteghella) for securing this important debate. The covid pandemic was an unprecedented crisis that placed immense strain on ruling parties worldwide. Few, if any, could dispute that rapid, decisive intervention was necessary to prevent an utterly catastrophic collapse in the British economy. However, acknowledging the scale of the challenge does not absolve the Government of responsibility for how that money was spent, how their support schemes were designed and implemented, or how recklessly public funds were safeguarded.
While some degree of waste and fraud is inevitable in a crisis, the scale of loss during the pandemic was not inevitable, but the result of systemic failure within the UK Government. That failure remains unchecked under the current Labour Administration. The Office for Budget Responsibility estimates that covid support measures totalled somewhere between £169 billion and £192 billion. That included a variety of schemes, from furloughing individuals to protect them from unemployment to grants and loans intended to help businesses stay solvent.
However, the support system simply did not work for nearly 3.8 million freelancers and self-employed workers. Many were excluded altogether from financial assistance through rigid eligibility criteria, outdated data or the blunt distinction drawn between modern forms of work. That said, much of the covid-19 spending—for those to whom it was available—undoubtedly saved jobs and prevented mass insolvency. Departments and public bodies were forced into reactive policymaking, scrambling to design schemes in real time, often without effective oversight or proper safeguards against abuse. Nowhere was that more evident than in the scale of fraud committed against the Government support schemes.
According to the independent covid counter-fraud commissioner’s final report, published last month, some £10.9 billion of taxpayer money was lost to fraud and error across covid support schemes. Of that sum, only £1.8 billion has been recovered so far. The remainder, as the report makes clear, is likely beyond recovery, with fraud prevention efforts identified as falling short across Government. The causes of this failure are well documented in the aforementioned report, but one particular point that stuck out to me was that banks were instructed to suspend their usual due diligence, despite voicing explicit warnings about heightened risks of fraud.
Better design was possible. Britain appears to stand alone in the G7 on the scale of fraud experienced during covid. Other countries managed to move quickly while still embedding stronger checks. The lesson is not that speed and scrutiny are incompatible, but that the Government of the time chose not to prioritise the latter. That so few consequences have followed these failures only deepens public cynicism with democratic political processes. Keir Starmer was elected on a—
Madam Deputy Speaker (Caroline Nokes)
Order. We do not refer to the Prime Minister by his name, but as the Prime Minister.
Iqbal Mohamed
My apologies, Madam Deputy Speaker. The Prime Minister was elected on a platform that pledged to clean up politics and crack down on those who defraud the public purse. However, instead of introducing stiffer penalties for individuals and corporations that are illegally profiteering from a crisis, the Government are spearheading punitive legislation on alleged welfare fraud, criminalising innocent benefit claimants.
In conclusion, what unites all of what I have spoken about, as it does Members from all parts of the House, is that fraud, waste and cronyism are a failure of governance and a failure to adequately plan and properly design systems to protect the public purse. If we are serious about restoring—
Susan Murray (Mid Dunbartonshire) (LD)
I thank my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) for securing this important debate. The covid-19 pandemic was undoubtedly one of the most impactful and damaging events to unfold in our lifetimes. Being told to stay inside was incredibly difficult for everyone; people were unable to see loved ones and were uncertain about the future. Thankfully, that time is now just a memory for most—one that we would rather forget, and which we can put behind us as we move forward.
Sadly, though, covid is something that many people cannot move past, as we have heard. Across the country, people have lost businesses, lost their homes and, in the worst cases, lost loved ones to the financial stress that the pandemic caused. To add to that distress, the hard-working British people who fell through the gaps have had to watch on as numerous instances of fraud and PPE procurement mismanagement have come to light. Billions of pounds have been wasted and lost; had it been managed properly, that money could have saved people’s livelihoods.
In my constituency of Mid Dunbartonshire, we have seen local businesses close. One constituent, who still feels the impact, has told me that a complete lack of support forced their takeaway business, which they had built up from scratch, to shut, yet when they tried to move on, they found that they were at a disadvantage. Despite holding a personal taxi driver’s licence, they had to rent a taxi plate at a cost of more than £400 a week.
The absence of meaningful support during covid did not just cost them their business at the time; it continues to have a direct and measurable impact on their ability to rebuild their livelihood today.
My constituent is just one of the nearly 4 million people impacted, and these people deserve support, acknowledgment of the loss that they suffered, and an apology. Beyond that, we need to listen to the voices of those affected, and to learn from their experience, so that we can find and plug the gaps in our system that people have fallen through. As the world becomes more unstable, we must make sure that, at home, people and businesses have security. If we are serious about building resilience as a country, we cannot simply move on and hope that those left behind will do the same. We must recognise the harm that has been done. We must be honest about the failures that allowed people to fall through the cracks, and we must take steps to fix them.
Madam Deputy Speaker (Caroline Nokes)
That brings us to the Front-Benchers’ speeches. I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
I thank my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) for securing this debate and for her excellent opening speech, and I thank the Backbench Business Committee for giving us the time to debate this important topic.
Small businesses and self-employed people played a vital role in sustaining communities throughout the challenges of the covid-19 pandemic, often at significant personal and financial cost. The pandemic placed unprecedented pressure on people, affecting the livelihoods of millions from all walks of life. There were additional concerns for self-employed people and small business owners, who faced even greater uncertainty because of the lack of support from the then Tory Government. The Liberal Democrats have stood by those people from the get-go. We were the first party to call for support for self-employed people during the pandemic, and we helped to secure the support scheme for them.
The covid pandemic had a devastating impact on people across the country, and tens of thousands of people lost their life. We must never forget the tragedies of that pandemic, as people lost mothers, fathers, grandparents, siblings, friends, husbands or wives. People were left isolated, unable to see others for weeks on end. They were unable to visit sick relatives, attend the wedding of a loved one, or hug their family at funerals. It is possibly a measure of how much time has passed and how much has changed since then that only a minority of those in the Chamber were Members of Parliament during the pandemic; I think I am the only Liberal Democrat in the Chamber who was here then. Like many MPs during the pandemic, I received heartbreaking correspondence from my constituents. Their struggles will stay with me, and I will remember their suffering for as long as I continue to represent my constituency.
I reflect with gratitude on the bravery of the doctors, nurses and carers who did everything they could; they often worked incredible hours to save lives and support those around them, and often put themselves at risk. I think of the thousands of people who selflessly helped their communities, be it as vaccinators, by picking up prescriptions, or by shopping for elderly and vulnerable neighbours. We must not forget those who suffered, and those who made sacrifices to ensure that the suffering was limited as much as possible.
The strong sense of public service and neighbourliness shown by people across the country was not reflected by the Government of the day. The covid inquiry has confirmed that systematic and political failings worsened people’s suffering. A lack of scrutiny and accountability led to wrong decisions, often with catastrophic results—from the lack of preparedness for a pandemic to the failure to protect those in care homes, the cruelty and inflexibility of the isolation that people endured in the most desperate circumstances, including on their deathbed, and most shockingly of all, partygate. We must ensure that there can never again be such suffering or such a lack of preparedness.
It is particularly important that the Government continue to recognise the contribution made by small businesses and the self-employed during the covid pandemic. The Government should ensure that they have learned the lessons of that period, and keep under review its long-term impacts. Ensuring that people and businesses can leave behind the series of economic challenges that began with the pandemic—including the energy crisis, the rising cost of living and the growing tax burden—and remain resilient is essential to our long-term economic and social wellbeing.
The Government need to do more to recognise the value of the self-employed, contractors and small businesses to our economy. There is so much more that they could do to support them, and to show the value of what they contribute—the flexible working, the specialist expertise and so on. There is a range of ways that contractors, the self-employed and small businesses can support the broader economy. We need to do much more to recognise that value. The Liberal Democrats are calling for greater transparency and support for the self-employed in, for example, Making Tax Digital. That was originally intended to simplify the tax system, but it has created new burdens, costs and confusion. We must make sure that the self-employed are properly informed and supported through that reform.
The Liberal Democrats strongly supported the expansion of workers’ rights during the passage of the Employment Rights Bill, and we pushed for some of those benefits to be extended—
Madam Deputy Speaker (Caroline Nokes)
Order. I appreciate that the hon. Lady is referring to the self-employed and small businesses who were impacted by covid-19 financial support, but I am not convinced that Making Tax Digital and the Employment Rights Bill fall within the scope of this debate.
Sarah Olney
Thank you, Madam Deputy Speaker. I wanted to reflect the value of the self-employed to our economy, and to reflect on how, as we learn the lessons from covid, that group of workers can be supported more broadly. That is a pressing issue for now, but I accept that we are debating what happened six years ago.
The extremely challenging period that small businesses and self-employed people went through just a few years ago makes it even more important that the Government address the major challenges that they are experiencing here and now. For many, those challenges include repaying the loans that they took out to maintain their business. Today, as they face increased cost challenges, that continues to be a huge burden. I sincerely hope that the Government will listen to the impassioned speech of my hon. Friend the Member for Stratford-on-Avon and think about how they can do more to support self-employed people, contractors and small businesses, who contribute so much to our economy.