Financial and Social Emergency Support Package

Chi Onwurah Excerpts

Wednesday 25th March 2020 Commons Chamber

[Jesse Norman]

I was just discussing the process of improving the Government response through feedback, often from colleagues, so I am very grateful to the hon. Lady for giving her feedback on those specific areas. In so doing, she will have activated Government processes with the relevant Departments, which will then look at the issues that she has mentioned.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

In the spirit of clarifying anomalies, I have been contacted by many businesses who tell me that, because they do not have business premises or work in co-working spaces, they appear not to be eligible for the business grants. I can understand why they would not be eligible for the rates support, but I do not understand why they would not be eligible for the grants. They are also telling me that they are required to put their own personal homes on the line to get the loans from the banks, so they do not want to take them up and get into debt.

[Jesse Norman]

I am grateful to the hon. Lady for raising that point. I will look into the question of whether there should be any relation between business loans; I am certainly not aware of one myself. It ought to be possible for people to claim business loans as she has described. As regards the business interruption loan scheme, borrowers are not required to pledge their house, but there may be some requirement for personal guarantees of other kinds, which is what one would expect, and which will open up lending in other ways. The Economic Secretary is very engaged on this issue. There are 40 lenders involved, so ironing out the guidance with all of them, to ensure a consistent picture, has not been the most straightforward thing one could imagine.

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[Stephen Timms (East Ham) (Lab)]

I am pleased to follow my right hon. Friend the Member for North Durham (Mr Jones). I begin my echoing his appeal for support for local charities and community organisations, on which we are going to be very dependent over the next few weeks, and which we need to survive the challenges they face with loss of funding, bookings and so on in the period ahead.

I warmly welcome the employment support package announced by the Government last week, including the commitment to pay up to 80% of the wage costs of those employees who are furloughed. I welcome the fact that it came forward quickly, just one week after the Budget. A huge package was put together in a very short period and I congratulate those responsible for it. I must say that, over the following week, the package has stood up quite well to the scrutiny to which it has been subject. The Government and those involved can take credit for that.

Like others, I think it is a shame that we still do not know what is going to be done for self-employed people. It is particularly regrettable that we are not going to know before the House rises, so Members are not going to be able to scrutinise that package when it is unveiled. Inevitably, we need to talk about the position that self-employed people are going to find themselves in over the next few weeks. Whatever is in that package tomorrow or the following day—I have no idea what is going to be in it—it is clear that universal credit is going to have to carry a fair amount of strain in supporting people through the period ahead.

I therefore want to speak about universal credit, picking up on some of the points made by the hon. Member for Glasgow South West (Chris Stephens), who was at the Select Committee on Work and Pensions session that I chaired this morning. He has referred to the very large number of people who have applied for universal credit—470,000 since Tuesday of last week, and 105,000 yesterday—and it is a good thing that, so far, the systems have not collapsed. We can be thankful for that. Like others, I have seen screenshots telling people that they are in a queue—due to the incredible volume of new users, there is a queue—and:

“Number of users in queue ahead of you: 79129. Your estimated wait time is: more than an hour.”

Indeed, it is quite a lot more than an hour.

It is right, however, to pay tribute to all those in the Department for Work and Pensions who are working very hard to deliver much-needed urgent support over this period. I am grateful to the DWP’s permanent secretary for offering this morning to give the Select Committee weekly updates on how things are going. It is clearly very important that, once people apply for universal credit, they get the help to which they are entitled quickly, because people are going to need urgent help, including those self-employed constituents we have heard about whose businesses disappeared last week. They need help urgently.

[Chi Onwurah]

My right hon. Friend is making an incredibly important point about universal credit.   The system of universal credit has been in design for years and was supposedly designed, so we were told, to be agile, adaptable and scalable. Is this not absolute confirmation that the system cannot be effectively scaled? Does he agree that universal credit needs to be scrapped and a system put in place that actually works?

[Stephen Timms]

I am grateful to my hon. Friend. We took evidence this morning on that very point—the need to improve universal credit and change some of the problems. Unfortunately we were told that, because of the IT systems, there is very little that can be done in the short term.

For example, one thing the Government have agreed to do is reduce the maximum deduction from people’s standard payment of universal credit. There are deductions for people to pay back the advance they receive up front and for other reasons. There is a case for suspending those deductions for the time being, but that is not the Government’s intention at the moment. They have agreed that the maximum deduction will be reduced from 30% of the standard amount to 25%, but they tell us that they cannot do that until October 2021 because of the problems with the IT system.

I am grateful to my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) for reminding the House that, years ago, we were all told that this was going to be done in agile, precisely in order that changes could be made quickly. I am afraid that those promises have not been fulfilled. We were assured time after time that all the problems of the old DWP systems would be solved by adopting the agile approach. Sadly, that does not seem to be the case. Despite that, I am going to press this afternoon, as I and the Committee did this morning, for changes to universal credit. A way has to be found to overcome some of the problems and to get these things done much more quickly than is suggested will be the case.

I very much welcome the fact that the headline rate of universal credit and working tax credit has been increased, although only for a year. Given the long freeze in the rates of benefits, there is a case for making that increase permanent rather than temporary. That is something we will no doubt come back to in the months ahead.

When it comes to universal credit providing much needed support to the self-employed, people who come off zero-hours contracts and freelancers, there are some serious problems with the way it works at the moment. The Trussell Trust has found that people on universal credit are two and a half times more likely to need a food bank than people on legacy benefits, such as jobseeker’s allowance.

There is a remarkable article in this month’s issue of The Lancet Public Health about universal credit, which finds that

“an additional 63674…unemployed people will have experienced levels of psychological distress that are clinically significant due to the introduction of Universal Credit”.

It goes on to estimate that more than a third of those people

“might reach the diagnostic threshold for depression.”

A little further on, the article states:

“When the policy change was introduced, the prevalence of psychological distress started to increase among those eligible for Universal Credit; however, the prevalence remained constant for people not affected by the change”.

Lastly, the article states:

“We also tested if there was an increase in the number of participants transitioning from unemployment into work in the intervention group after the introduction of Universal Credit relative to the comparison group; the reform had no effect on employment”.

There are serious problems with the way universal credit is working, and we are now forcing—understandably—hundreds of thousands of additional people on to this benefit. What is the problem? Why does it cause so much more difficulty for people than jobseeker’s allowance and other past benefits? A big part of the answer is the fact that people have to wait five weeks after applying to receive their first regular benefit payment. That is inevitably pushing people into debt with the Department for Work and Pensions. A lot of people are then choosing to say, “In that case, I’d better not pay my rent for a bit,” and they are getting into rent arrears. The National Housing Federation is reporting that people on universal credit are significantly more likely to be behind with their rent than people on jobseeker’s allowance, both in the past and currently. This is a problem that will affect very large numbers of those who are now applying for universal credit.

It seems to me that it cannot be a good idea—given the boldness and generosity and the welcome characteristics of the package for employees that was introduced last week— to force self-employed people, by contrast, on to an arrangement where they do not get a substantive payment for five weeks.

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[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a real privilege to speak in this incredibly important debate. As I am, I think, the last speaker from the Back Benches, it is appropriate to start by paying tribute to the Leader of the Opposition and the shadow Chancellor on the day of what may be their last appearances on the Front Bench. I regard both of them as comrades and friends, though I would not necessarily say that I have agreed with everything that they have said and done—but that is how it is in our great Labour movement. I particularly thank them for always bringing a deep care and concern for the most vulnerable in our society to the heart of our debates; for vanquishing austerity economics, which had such a grip on our political debate five years ago, and still has consequences for so many in our society today; and indeed for the way in which we are responding to the covid-19 crisis.

Like most Members here, I have been overwhelmed with emails from constituents—from a supply teacher who does not know how he will feed his family; from a plumber who feels that his health is in jeopardy, and feels abandoned by the Government; from a cancer survivor who needs to self-isolate, but does not know what she will eat on Monday; and from a circus owner who does not know whether her Newcastle-based circus will survive this crisis. Parliament should not be the only circus to survive the pandemic; I hope it is not disorderly to say that. It is really important that all our performers, and all our self-employed, of whom there are 5 million in this country, have the support that they so desperately need.

When I took the tube to Parliament today, I felt a bit of a fraud, because I did not feel like a key worker. I was not going to save lives. But when I thought about the impact of the Government’s delay and intransigence—I am sorry to have to use those words—in providing the support that is so desperately needed by freelancers and the self-employed, I realised just how much they need our voice. I have constituents who lost their jobs because the Chancellor delayed announcing the very welcome job retention package. The delay in respect of measures for the self-employed will not only cause lost jobs, but lead to deaths. The Minister shakes his head, but as we have heard in many excellent contributions, the absence of support for the self-employed is driving people to go to work when they should not, and to put themselves and others at risk, as well as causing enormous mental distress.

Parliament rises tonight, but I urge the Minister, Chancellor and Prime Minister to set out immediate measures to support the self-employed. Unfortunately, all those who are employed are not necessarily protected. We have heard again and again from Members of Parliament the desperate appeals from constituents whose employers are not protecting them from the coronavirus. I am going to name some from the emails I have received, and they can get in touch with me and explain how they are protecting their employees. DHL, the delivery service, is not offering any personal protection equipment to its deliverers and is not following the 2-metre guidance. Tolent builders are not following the 2-metre guidance. Serco and EE, which have many call centre employees in large rooms, are not following the 2-metre guidance. Santander is apparently bringing in contract workers to work on PPI, which I do not believe to be an essential service, and is not following the 2-metre guidance or social distancing. Then there is our very own Mike Ashley, the owner not only of Newcastle United but of SportsDirect, who, after claiming that SportsDirect was an essential service and finally—

[Bill Esterson]

It’s essential to his fortune.

[Chi Onwurah]

It is an essential service for his fortune, but not in this crisis. He finally agreed to close his shops, hiking prices online while still making employees come into empty shops to act as security.

The Government’s payroll support and job retention scheme are very welcome, but we must have greater clarity for businesses on what they need to do to stand by their employees, as the Prime Minister said. Any private sector bail-out must have strings attached to it. Banks were bailed out in the 2008 financial crisis and people were rewarded with austerity. In this crisis, we must champion the good businesses that are doing the right thing.

[Ian Blackford]

I congratulate the hon. Lady, who is making a very gracious speech and a number of strong points. She is talking about the austerity that followed the bail-out of the banks, and one thing we need to put down as a marker today is that when we get through this crisis the poor must not pay the price a second time.

[Chi Onwurah]

The right hon. Gentlemen makes exactly the point that I was going to make. It is pleasing to see that that is at least agreed across the Opposition Benches, and I hope to hear a message from the Government that in this crisis, after this crisis, the people must be rewarded and not asked to bear the burden.

[Bill Esterson]

On the behaviour of the banks, I mentioned the 39.9% interest rates that the banks have announced that they will charge pretty much across the board—funny that, isn’t it? Does that not suggest that they are already embarked on exactly that approach of trying to make everybody else pay when they should be taking the opportunity to pay back for their role in the financial crisis?

[Chi Onwurah]

My hon. Friend makes an excellent point. Without wishing to go into the financial crisis and the, in my opinion, very well deserved backlash against the financial sector, which continued to make profits while so many people felt the impact of that crisis, it now has the opportunity to demonstrate the social value and support it can provide in times of crisis and emergency, especially, as my hon. Friend says, for those who have taken out loans or credit cards and those who need loans. Many businesses are still saying to me that they are not getting the loans that they are promised, particularly the tech sector start-ups, which rarely have the assets that banks feel are necessary to offer such loans. We want greater corporate citizenship from the financial sector and from other businesses, too.

I applaud and echo what many of my colleagues have said about those who are suffering the most in this crisis, but my focus is on the impact of the digital divide in our country in relation to coronavirus. We know that access to and ability to use the internet is not evenly spread across our society. In the UK, data from the Office for National Statistics indicates that in 2018, 10% of adults said they did not have access to the internet at home, while 4.3 million had no demonstrable digital skills. That data also showed that 12% of those aged between 11 and 18 years reported having no internet access at home from a computer or tablet.

Since 2011, adults over the age of 65 have consistently made up the largest proportion of adult non-users of the internet. More than half of all adult internet non-users were over the age of 75. Across all age groups, disabled adults make up a large proportion of adult internet non-users.

In normal times, access to the internet improves hugely the chances of, for example, finding work. It also, as we have heard, makes it easier to access universal credit—in fact, it is essential to access universal credit—and it enables people to connect and communicate better with family, friends and the community. These are not normal times, however, and for the next few weeks and perhaps the next few months, social distancing is going to be the norm. Social distancing must be accompanied by digital coming-together, and for that we need digital skills and digital access. We have heard about the implications for mental health of isolation without the ability to communicate. I want the Minister to think about what that means for the 11% who have no access to the internet.

What I want to see from the Government in the next few days is first, digital skills. There are those who have access to the internet but do not have the real digital skills to use it. They need to be able to take advantage of the many different courses and means of entertainment and so on, which are all fantastically being developed at the moment. They need the digital skills to be able to access that. In that respect, I recommend the work of Sue Black with the #techmums initiative, which is still rolling out during coronavirus, and also the work of many other charities.

Secondly, there is the question of capacity. Here I am really concerned, because all we have had from the internet service providers and network operators is general vague promises that there will be the capacity and it will all be fine and all right. To be frank—I have been known to mention this, but I will say it again—as someone who worked designing telecom networks as an engineer for 20 years, that does not reflect at all my experience. Capacity needs to be dimensioned and built in. There will be capacity now that is dedicated to business networks that may need to be moved over to support home networks with the huge increase we are seeing in working from home.

Moreover, we need to be able to secure capacity for our essential services. I am already hearing that in Newcastle, for example, Newcastle upon Tyne Hospitals NHS Foundation Trust cannot provide the capacity for administrative workers to work from home. If those essential services can be delivered from home, it frees up space and hospitals and car parks and so on.

Just as with personal protective equipment—we had a lot of time to prepare that was perhaps not best used, and there was a lot of talk about everything being okay, which has turned out not to be the case—I fear that over the next few weeks, when we are all confined to our homes with only the internet to serve as a social medium that we can take advantage of, we will find that there is not enough capacity. Networks will fall over. There will be delays and, as always, it will be the most vulnerable and the poorest who will suffer most. I would like to see modelling of the traffic impact on our networks. I would also like to see a commitment to digital access for all, particularly for young people and schoolchildren who will be expected to be learning from home. They need to have free access to the internet to enable them to do that.

Moving on, I want to say a little bit about where we need to go from here. In economics classes, we were taught that the virtue of a capitalist market economy is that it ensures the efficient allocation of capital, as market competition drives inefficiencies out of the system, ensuring the cheapest, most innovative products and services possible. The best the state can do, we were told, is to get out of the way. But the capacity to deal with a major health or economic shock is, by definition, inefficient when that shock is not there, so extra ventilators and stocks of masks or toilet paper are inefficiencies that the free market system drives out. They can only be provided and stocked by the state, and the problem with the lean, mean state machine that the Conservatives advocate and have done their best to create over the 10 years of austerity is that the state is then no longer equipped to provide the resilience, the stock and the inefficiencies that are necessary to support our population in a time of crisis as we have now.

This is a war, and as a war it has real heroes—NHS workers, care workers, teachers, transport workers and cleaners. Not all of them are in the public sector: we have heroes in the private sector too, in supermarkets with our retail workers, and those isolating at home, which is something we have never asked people to do before. As a woman of colour, I know that there is despair at the realisation that natural hair may no longer be a choice, but the only option for us. There are many sacrifices, large and small, which are expected to be made over the next few weeks. Obviously, not everybody faces the particular challenge I just mentioned.

The heroes of this war must be rewarded. After the second world war, we had the national health service, homes fit for heroes and the welfare state. After this battle, we need an economy fit for heroes. We who have the privilege of walking in these corridors of power are insulated from some of the worst impacts—the desperation, the fear and the confusion that I know is going on in homes across Newcastle. I want the Minister’s reassurance that we will build a better and fairer economy out of this desperate crisis in order to be an economy fit for the heroes who are now helping us to drive out coronavirus.

I want to end on a note of hope and optimism, because in Newcastle and across the country we have vibrant, active people who want to do the right thing and want to support and look after others. We have great communities across our country, such as in Newcastle with the Newcastle City Council city lifeline, which allows people to volunteer their time to support community organisations and projects. We have already heard that the national Government scheme for national health service volunteers has been inundated.

Newcastle upon Tyne Central has 11 active community Facebook groups that residents can post their needs and volunteers commit their time to. Slatyford tenants association in my constituency, which offers bingo and tea once a week, has closed down for the duration of the coronavirus crisis, but is looking forward to opening again. Mrs T’s Café in Blakelaw, which supports the local community through excellent nutritious food, is looking forward to getting back.

Of course, we also have our food banks. Newcastle United Supporters Trust is one of the most impressive organisations I have ever seen. As a Newcastle United supporter, one of the most inspiring sights on a Saturday when walking past St James’ Park is the Newcastle United Supporters Trust stall, where those shaking the buckets, as I have done, will find people putting in £1, £5, £10 or £20. We should not need food banks, but when we do, such generosity from Geordies and people across the country is inspiring. Although we cannot have stalls on the streets—we have no more football matches for a while—we still get fantastic support online. Food is being donated by businesses such as Fenwick, TK Maxx and Thorntons. Geordies from Newcastle, but also from Brighton, London and, I understand, the Falkland Islands have donated money online. We also have Newcastle United Foundation, which is delivering hot meals to schoolchildren. They all need our support, as do our theatres, cinemas and charities.

Much of the real world is going online and we need to ensure that we have a real-world community, as well as real employment and a real support and welfare sector for when the crisis is over, when we can build an economy fit for the heroes we will create.

Royal Assent

[Madam Deputy Speaker (Dame Eleanor Laing)]

I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Contingencies Fund Act 2020

Coronavirus Act 2020.