Coronavirus: Job-Support Schemes

Meg Hillier Excerpts

Tuesday 7th July 2020 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I thank the right hon. Member for Central Devon (Mel Stride) and his Committee for their work on this issue. I represent a constituency—indeed, part of a borough—that is the epitome of the gig economy. That is an economy and style of working that this Government have helped to foster, with people working in different ways, and on different pay and conditions. It includes everything from people on zero-hours contracts to sole directors of companies, from people on repeated short-term contracts to people who are 100% freelance. Although the Government’s measures have included support for quite a lot of freelance workers, they have excluded, as the right hon. Gentleman has said, at least 700,000—if not, as his Committee estimates, a million—people, who are not supported by the schemes.

I have raised the matter repeatedly in this House, and we have had assurances from the Government that they have introduced a world-beating, groundbreaking set of initiatives to support people who are on furlough and self-employed. They keep parading that as though it were the answer to the question we are asking. Let me be absolutely clear: we could talk a lot about that, but the right hon. Gentleman has covered that territory and I do not need to repeat what he has said. We are talking today about the people who have not had a penny of income for the past four months. For around 100 days, they have had no money coming in.

I completely agree with the hon. Member for Winchester (Steve Brine). Those are not people who have been trying it on, chancing it or thinking that they can avoid tax by some clever dodge; they are hard-working people who have used mechanisms that have been promoted not just by the Government, but by Governments over time, and that have been particularly supported by this Government. They were told, “We will do whatever it takes,” but when push came to shove, they were left out in the cold.

I will give some examples. I came across a shocking example of somebody who worked as an occupational therapist in the NHS—not employed by the NHS, but delivering NHS services—and who was required to go into a personal service company to make sure that they had the required limited liability insurance. That reason drives many individuals to set up such companies. It is either that, or their house or other assets will be on the line—if they have them. I want to be really clear that most of the people who have contacted me about the matter are not on big incomes.

I will take another sector as an example. People who work in broadcasting and television are often on short contract after short contract. They are employed, but only for short timeframes, so they do not qualify for this support. Others who were freelance and employed, but the balance was wrong, got short-changed on this deal.

I think there is a technical challenge with sole directors of companies that is more difficult to solve, notwithstanding what I have said about many people being driven to that route. However, when people have records with HMRC—when they have paid tax while on short contracts or through self-employment, even if not for the length of time stipulated by the Government—it is not beyond the wit of this House, this Government, man or woman to work out how to deliver a solution for them. If they have a tax record, the reverse engineering that was done for other self-employed and employed people could surely be done for members of this group.

I urge the Minister, who has told me that he is reflecting on this, not to reflect but to act. After 100 days, where are people going to find work now? They need a solution, and they need support.

[Steve Brine]

Several constituents have said to me, “I will be quite honest with you; I did not need the help. I was not able to get any, but I did not need it.” The Government may have feared that everyone who earned the majority of their income from dividends would suddenly come forward and add a huge burden to the self-employment income support scheme, whereas the reality was that we could have trusted people. Yesterday, Barratt displayed a huge amount of corporate responsibility by saying that it would pay back the money that it had claimed through the furlough scheme. The fact is that a lot of people out there did not need the support, and they might not have come forward and claimed it. Perhaps we should have trusted them a little more and been a bit more flexible with the scheme.

[Meg Hillier]

The hon. Gentleman raises an interesting point. One of the issues that I have been looking at in the Public Accounts Committee is the fraud and error in this. I am absolutely in favour of the schemes that have been proposed. I am also keen that the Government come down hard on anyone who has tried to break the rules—I think we agree on that.

It is really important to remember that a lot of these people are not on big incomes—they have absolutely nothing. Because of the high price of housing in London, they are often renting properties, and they are at their wits’ end in how they can manage. This is devastating for them, and these are the people who will be the engine of any economic uplift. We also need to recognise that if we are going to foster this type of economy and working, there needs to be a safety net for people. They did not choose to take this risk. Someone working in broadcasting does not choose to be on a short-term contract; that is just the way the industry works. And do not get me started on the implications of the IR35 reforms. We have had that debate elsewhere, and it is one for another day, but I hope that others in the Chamber agree with me on that.

We need a solution. These people cannot live on fresh air. They cannot keep going on nothing. In many cases, their income will not magically increase in October or anywhere between now and then or next spring, especially if they work in the hospitality sector. I really hope that we will get some answers from the Minister today, and once again, I applaud the work of the Treasury Committee in highlighting these very real issues for many of my constituents.

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[Mr Baker]

Yes. I hope that the Minister will give us a detailed explanation of how these figures break down, because the figure to which I just referred is different from the one on the Order Paper. I refer Members to page 357 for the resource to cash reconciliation, which I am sure my right hon. Friend will be fully able to break down in detail if he wishes to.

I want to come on to some of the things that the Chair of the Public Accounts Committee said. In my constituency, there are plenty of people who, in one way or another, work in the arts and are in quite desperate straits. To reinforce her point about tronc, it has been a real disappointment to me that we have not dealt with the issue of people in the hospitality sector receiving perhaps half their income through tips, for which HMRC has PAYE information. I will never forget one particular email from a new father who was shocked to discover that he would be not on 80% of his normal pay but 40%. That is a dramatic difference, and it is because HMRC and the Government have not taken into account tronc payments, which they should. The freelancers issue is important and profound. On dividends and directors, we should recognise that sometimes we are talking about make-up artists, for example, who are paid through dividends.

[Meg Hillier]

Yes.

[Mr Baker]

I am grateful to the hon. Lady for agreeing. There are real issues of justice and equity at stake here. I remember reading my right hon. Friend the Financial Secretary’s 2008 book “Compassionate Economics” and it is a wonderful book that I recommend to anyone. I know that he is a compassionate man and that these issues will weigh upon him, so it is no way a criticism that I raise such things, but I observe that the edges here are awfully hard.

In the estimates document, HMRC refers to its policy partnership with the Treasury, so I encourage HMRC and Ministers to work together to see across the spectrum of issues—I do not have the time to go through them all—in the Treasury Committee’s report to see whether more can be done, even at this late stage, to help those who have been without help altogether. I place particular emphasis on furlough in relation to airlines and workers at airports. Such groups are very much represented in my constituency—west of Heathrow as we are—and people need help there.

My final point, and the reason for declaring my interest, is that the obvious and most dangerous harm from coronavirus is, of course, that it has killed tens of thousands of people, but well down the hierarchy of problems is that it has taught us all to be socialists. All of us have learned to live at one another’s expense, often ultimately at the generosity of the Bank of England and the creation of easy money. I say to Ministers that, yes, it was necessary to do this, but please do get us out of this mess.

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[Meg Hillier]

I want to go back to the point about people who had to use personal service company set-ups in order to get liability insurance. Does my hon. Friend agree that it is a crazy system that led to that behaviour, which in turn has led to people going without money?

[Ms Eagle]

I absolutely agree. This crisis has forced us to look at how our labour market works, and we need to come back to that very strongly indeed.



Tomorrow, I want to hear that the Chancellor is doing something to help the freelancers who power much of our cultural industry but who have thus far been excluded from the help available. I want to see him announce a strategic sectoral approach to job retention to ensure that the economy thrives. The OECD estimates that the UK could suffer the worst covid-19 related damage among the advanced economies, with a decline of 11% in national income and UK unemployment rising to 9% this year. Despite the labour market having been sheltered from a complete meltdown by the furlough scheme, there are ominous signs of a huge strain like a dam waiting to burst. The recent announcement of many thousands of job losses in retail, aviation and leisure could be just the tip of the iceberg if the Chancellor does not take decisive action.

The Government must now switch quickly to a more strategic and tailored response that will enable stabilisation and economic recovery. Certain sectors will continue to be affected because of social distancing rules, and they must be helped. Local authorities and schools, for whom the Chancellor promised he would do “whatever it takes” to fight the virus, should have their costs fully reimbursed. To date, they have received back only a third of what they have spent.

The Chancellor exhorting people to spend, spend, spend, as he did at the weekend, risks entrenching the old debt-fuelled consumer economy in place and squandering the chance to lay the foundations of greener, fairer, more sustainable future prosperity. The Prime Minister blaming everyone but himself, exhorting us to “build, build, build” and trumpeting a Roosevelt-like new deal while promising to spend 0.2% of UK GDP, whereas President Roosevelt spent 40% of US GDP, would be a farcical response to our predicament if we were not in such a perilous situation.

--- Later in debate ---

[Dan Carden (Liverpool, Walton) (Lab)]

I am delighted to be taking part in this debate on behalf of the Opposition Front-Bench team, with this being my first time at the Dispatch Box opposite the Financial Secretary. Let me start by thanking the Treasury Committee for its important work in preparation for this debate. This is by no means a run-of-the-mill estimates debate; these are exceptional times, and the schemes put in place by Government, called for and supported by the Opposition and the trade unions, are incomparable to anything we have seen before, with £42 billion for the coronavirus job retention scheme and £10 billion for SEISS.

Since March, communities up and down the country, families, workers, the self-employed, traders and business owners have had their way of life changed beyond recognition. A public health crisis became an economic crisis. The lockdown meant that businesses had to close, work dried up and all but essential parts of the economy came to a standstill. From the beginning, the Government have been too slow: too slow to take the threat seriously; too slow to lock down; and too slow to test, track and isolate. The key aspects of the response required Government to communicate public health messages clearly and to earn public trust for their actions. They have, regrettably, without question, failed on both those measures.

I turn now to the schemes. More than 9 million jobs have been furloughed and more than 2.5 million claims have been made for self-employed income support. Where improvements are needed, we have made suggestions, plugging gaps and ensuring flexibility, and we are still calling on the Government to abandon their one-size-fits-all winding down of these schemes. It was a shame to see the Chancellor dig his heels in on this earlier today. And we are still calling for changes to sick pay so that people are not forced to choose between their health and their income.

There have been problems and missed opportunities with these schemes. All of us will have dealt with the heart-breaking situation of constituents being laid off, despite their employers being eligible for the scheme. The scheme was made available to all employers, but early communication failed to make it clear that firms were expected to furlough staff, not lay them off. New starters were not covered by the scheme. There was a lack of clarity to ensure that employers furloughed staff who needed to shield at home even if businesses continued to function. Agencies, including umbrella agencies, too often chose not to furlough staff, but rather to keep them on their books without work.

[Meg Hillier]

We were shocked in the Public Accounts Committee to discover that, despite planning for a pandemic, there had been no planning for what to do with the economy in a pandemic, which rather goes to the point that my hon. Friend was making about the muddled advice and the changes to the scheme as it was being implemented.

[Dan Carden]

I thank my hon. Friend for that intervention. She is absolutely right that far too little preparation was done. We saw that with the stocks of PPE at the beginning of this crisis.

Too many did fall through the gaps. We have heard that it was as many as 3 million, according to ExcludedUK, and upwards of 1 million, according to the Treasury Committee. Perhaps most shamefully, some companies, such as British Airways, have used lockdown and the job retention scheme not to protect jobs, but as cover to plot mass redundancies and drive down the pay, terms and conditions of their workforce. That is a situation that could have been avoided had our Government followed the example of Denmark by making support schemes conditional on jobs being retained. So why did the Chancellor fail to act in the interests of workers? There were also missed opportunities to change corporate tax behaviour, to secure environmental gains, to drive up employment rights and to work with trade unions. It is just plain wrong. Companies that have avoided paying their taxes have received taxpayer bail-outs, with no requirement to change their behaviour, to stop tax avoidance, to stop profit shifting and to stop their use of tax havens. So did the Chancellor fail to act in the interests of taxpayers?

We have called for a full back-to-work Budget, one that is focused on preventing mass unemployment and on creating the jobs of the future, but instead we have an economic update from the Chancellor tomorrow, and we will have to wait to see what comes of that. Some 3.4 million people have already been moved on to universal credit since March and, with lockdown easing, it seems that we have an exit without a strategy.

Let me turn to HMRC itself and where the principle of job retention, it would seem, does not apply. HMRC’s staff numbers have fallen from 105,000 in 2006 to 65,000 in 2019. During those years, the UK cut more revenue collectors than any other European tax authority. Only Greece cut more staff as a proportion of population. The current office closure programme puts a further 2,000 HMRC jobs at risk on top of the more than 900 jobs already cut. One hundred and seventy local tax offices are closing around the UK, leaving 13 regional hubs and four London offices. That will leave no tax office for the south-west closer than Bristol, no tax office in East Anglia at all, and none in Scotland north of Edinburgh and Glasgow, severing the connection with the communities they serve. We oppose the office closures programme. Counter to the Government’s levelling-up narrative, it will see offices closed and jobs lost in towns across the country, from Wrexham to Warrington, Stockton, Dudley, Shipley and Solihull.

Low pay, poor staff retention, high staff turnover and redundancies are all wasting thousands of years of institutional knowledge and expertise at HMRC. It is the incredible work of staff administering the coronavirus schemes that has done so much for people across the country, but it has also meant that key duties elsewhere have had to be suspended. Perhaps our biggest challenge in the coming years will be to restore our public finances and reinstate our tax base, and for that we need HMRC firing on all cylinders.

We know that tax audits bring in at least four times what they cost—£4 to £6 for every £1 spent—and those subject to audits also declare more of their profits in future years. Quite simply, we need tax collectors in order to collect tax. I say sincerely to the Minister that, in the light of the challenges ahead, he should halt the redundancies, stop the office closures and commit to a properly funded and resourced HMRC.

We need the Government to break away from their blanket approach to this crisis. They must look again at sector-specific support beyond October. It can make no sense for viable jobs and sectors simply to be left to collapse, and I implore the Minister to work with trade unions and the TUC to that end. As my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) said, the Government have fostered, and indeed pursued, the growth of a gig economy across this country, and the lack of support for those people has been astounding. We have a crisis of hunger in our communities, with food bank use multiplying and people unable to pay their bills, their rent or their mortgages. The Government must do more for those left unemployed by the coronavirus pandemic.

We are also living through the most incredible demonstration of the value of our public services. There has never been greater urgency to ensure that our tax system is fit for purpose, so that those with the broadest shoulders pay their fair share. Never again can a crisis be heaped on the least well-off and the least able to afford it.

During the last decade of austerity, the richest 1,000 people in the UK increased their wealth by 183%. Aggregate private wealth is now over six times our GDP. We therefore welcome the serious academic research under way on how a UK wealth tax would work. That research is being carried out at the London School of Economics and the Centre for Competitive Advantage in the Global Economy at the University of Warwick, alongside the Institute for Fiscal Studies, the Institute for Government, the OECD and the Resolution Foundation.

In order to sustain funding for universal public services, deliver the coronavirus support schemes and create the sustainable green jobs of the future, we need fair and progressive taxation that confronts growing wealth inequality, to build a just and sustainable economy that puts people, jobs and the planet first.

[The Financial Secretary to the Treasury (Jesse Norman)]

I thank my right hon. Friend the Member for Central Devon (Mel Stride), who chairs the Treasury Committee, and the Backbench Business Committee for using this estimates day debate to shine a light—in many ways a warm light—on the performance of Her Majesty’s Revenue and Customs during this extraordinarily testing and difficult period. I am grateful to all Members who have contributed to this interesting and lively debate.

I welcome the hon. Member for Liverpool, Walton (Dan Carden) to his first debate as my opposite number, which I hope will be the first of many, although I do think that he slightly missed the tenor of the argument in calling the Government too slow, given that most other Members who have commented have been concerned about the sheer speed of our delivery and whether people might have been missed out in this set of measures.

The coronavirus has the potential to spread with extraordinary speed across a population.

In March, the Government took the unprecedented step of asking businesses and employees to halt their normal activity for an extended and, at that time, indeterminate period of time. At the same time, or shortly afterwards, the Government unveiled an extensive package of support that included a business rates holiday, VAT and income tax deferrals, and Government-backed and guaranteed loans worth £300 billion.

At the heart of that response was, as has been highlighted in the debate, not one but two major schemes that between them covered the vast majority of the working population. As right hon. and hon. Members from all parties have mentioned—my great friend the Member for Wycombe (Mr Baker) in particular highlighted this—had that been done in normal circumstances, it might have taken months or, more likely, years to deliver just one of the schemes, let alone two. My hon. Friend was absolutely right to highlight what an extraordinary achievement it was to bring in both schemes at the speed at which they were introduced. He used the phrase “extraordinary achievement”, and he was right.

[Meg Hillier]

It was an achievement, but although there was a planning exercise—there have been many planning exercises for pandemics—the Treasury has told us that in 2016 there was no economic planning for a pandemic. Was the Minister aware of that and does he think that should change?

[Jesse Norman]

I have not gone into the arrangements for pandemic that the Treasury had in 2016, at the time the hon. Lady mentions, so I cannot comment on that. What I can say is that when pandemic struck, the two schemes were put in place with astonishing speed and capability. I do not think that is contested in the Chamber; it is well understood.

The coronavirus job retention scheme was announced by the Chancellor on 20 March and opened for applications just one month to the day afterwards. Six days later, the Government announced the self-employment income support scheme, with a target of making the first payments by the middle of June. In fact, the online portal opened for applications on 13 May, weeks ahead of schedule, with the first grants being paid into bank accounts on 25 May and within six days of application thereafter. That was achieved with more than 80% of HMRC staff working from home. Silos disappeared and timelines were condensed to extraordinarily short lengths of time as officials from across Whitehall came together to solve the problems. In so doing, they set up a kind of exemplar of what a really effective 21st century civil service would look like. It is a model that we are looking at very closely in our thinking about how we might change the tax administration system to make it more resilient in response to the concerns.

The achievements I have outlined have been widely welcomed in this debate, and rightly so. There cannot be any Member who has not walked down their local high street in the past week or two and spoken to those at the shops that are reopening who have had the benefit of the furlough scheme, or to traders who have had the benefit of the self-employment scheme. I am massively proud—we should be proud as a House—of HMRC’s efforts to design and deliver the schemes so quickly and with such effect.

The CJRS—the furlough scheme—has helped 1.1 million employers throughout the United Kingdom to furlough 9.3 million jobs, while 2.6 million self-employed individuals have applied for grants worth more than £7.7 billion. As has been said often, I do not pretend today for one moment—I do not think any one of us does—that the schemes are a panacea. Right hon. and hon. Members have rightly highlighted instances of groups and individuals who are very regrettably and unfortunately not eligible under the scheme rules. It is important to say that under no circumstances and at no point have those people been in any way forgotten by the Government; we have listened carefully to Members, as well as to employers, and refined both schemes to include more people where possible. For example, those returning to work after periods of parental leave and reservists who return to their jobs after active service in the armed forces are now able to access the flexible version of the furlough scheme, and similar accommodations have been made with respect to the self-employment scheme.

Together, the measures I have outlined represent an economic intervention unmatched in recent history. Nevertheless, the practicalities are such that the Government have not—I recognise this—been able to support everyone in exactly the way they would want. If I may, I shall address some of the specific points raised in the debate in a moment, but first it is important to understand the principles that guided the Government’s response.

Economic Outlook and Furlough Scheme Changes

Meg Hillier Excerpts

Tuesday 16th June 2020 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

In my constituency, around 25% of the population, aged 16 to 64, are being furloughed or are receiving universal credit. The additional support for people on the self-employment scheme probably takes the figure to 30%. We recognise, therefore, the scale of the Government’s intervention, but there are many freelancers on short-term contracts or on different ways of working for freelance industries who are not getting a penny, many of whom have a strong and detailed track record with HMRC, so the reverse engineering that took place with the main scheme could be applied to them. The Minister repeatedly keeps talking about the generosity of the scheme, which suggests no shift I assume. Will he be categoric now and tell us whether there is any hope for these forgotten freelancers?

[Jesse Norman]

What I have said is simply that international and national bodies recognise the comprehensiveness and the relative generosity of our schemes—[Interruption.] They have done that, so that is the fact of the matter. The point that the hon. Lady raises is one on which we continue to reflect. As I have said, we take this very seriously. We want to support all sections of the economy, including self-employed people who have not been able to qualify. There are, of course, other ways in which they may be able to qualify for support within the wide package of support that we have given, but the self-employment scheme at the moment is not one, in some cases, that they are able to use, and that is something on which we will continue to reflect.

Finance Bill (Ways and Means)

Meg Hillier Excerpts

Ways and Means resolution & Ways and Means resolution: House of Commons
Tuesday 19th May 2020 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I think it is fair to say that covid-19 has shone a light on the different ways of working. Whether it be freelance work through personal service companies, which are often set up to deal with insurance and liability, or freelance work via short-term pay-as-you-earn contracts, many of these people are falling through the net. That does not even begin to embrace those who are in insecure, zero-hours work. Many in my constituency work four jobs over seven days just to make ends meet, while others earn enough to work a four-day week and can live quite comfortably.

Hackney South and Shoreditch is a microcosm of all the different ways of working, some of which the Chancellor has supported in his package, and some of which he has not. It is also a hub of innovation, particularly in the tech area in Shoreditch, in the creative industries. We are proud to be the home of many disruptor businesses that start off trying to change the way things work.

This motion brings to the fore a number of issues. Contractors providing a flexible, agile workforce allow many of the businesses in my constituency to buy in the skills they need when they need them. Those are typically high-cost skills that a business could not put on the payroll, especially at the start-up stage. Businesses have been in touch with me about this measure for that reason in particular. They would not be able to create a full-time job. They do not need this expertise full time, long term on the payroll. They need to be able to hire someone quickly, and if the company does not succeed, there is no direct impact on the careers of the people they have hired for that short contract because they go on to the next contract. It allows start-ups to get the help, support and technical skills they need as a fledgling business.

Since the Government announced the extension of IR35 to the private sector, many companies in my constituency have already taken the view that they need to move overseas, and many of the individual contractors are moving overseas. They often work in different countries anyway, so where they are physically based is less of an issue than it may seem.

Many of the companies that are employing those contractors are taking a very risk-averse approach, designating all contractors as needing to go under the IR35 umbrella. That is having a negative impact on those technically skilled individuals who would be available for work but will end up being employed for tax purposes only, with none of the perks. In pursuing the national insurance contributions of employers, the Government are in danger of throwing out the baby with the bathwater. No one wants to see tax avoidance on a huge scale, but this system has grown up and helped to generate a whole business sector that relies on this flexibility, and the employees caught up in this will have none of the benefits of employees but will be working alongside people who do.

The issue of national insurance contributions is really important in terms of the Government’s review. We need to know exactly what the timetable is for that review, who will do it and how they will calculate the tax take. Many businesses are presented with evidence, which I am happy to share with the Minister, about why the tax take will not actually increase for HMRC by going down this route. It is really important that we get those fundamental numbers right. Is the research commissioned yet? How will be people be able to contribute, and will it look at the overall tax rate? The delay of a year is welcome, but I completely agree with the right hon. Member for Haltemprice and Howden (Mr Davis) that we are going into an economic contraction, the likes of which this this country has never seen before, and a year is not long enough. We need to delay this further or we will lose these skills, and businesses will not replace these roles as employees, so we will have a double whammy in the economy.

Covid-19: Economic Package

Meg Hillier Excerpts

Tuesday 12th May 2020 Commons Chamber

[Rishi Sunak]

The scheme, as it is designed, does provide income support of 80% of those wages. Indeed, where those wages are variable the scheme allows an average to be taken to benefit the employee. We have also strengthened the safety net, as I mentioned earlier. Crucially, employees who are furloughed are then able to work elsewhere as well to supplement their incomes. That flexibility is often unnoticed, but it is very helpful. I know many people are taking advantage of that to boost their incomes during this time and I think the scheme, as it is designed, provides the required support especially to those on the lowest pay.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op) [V]]

The Chancellor has spoken about freelancers, who often work on short-term contracts or for personal service companies. In answer to the right hon. Member for Ashford (Damian Green), he talked about optimising the existing mechanisms for those people, but will he come forward today with the suggestion that there are concrete proposals in place? These are people with clear financial records and they often have accountants, so there is a track record. Will the Chancellor support these different types of self-employed people?

[Rishi Sunak]

They are being supported. The scheme to support them goes live tomorrow, ahead of schedule. Those who are self-employed whose returns and earnings we are aware of will be contacted, and are already being contacted. They are able to apply from tomorrow and will receive cash in their accounts for a three-month grant as early as next week. The scheme is one of the most generous in the world for those who are self-employed.

Finance Bill

Meg Hillier Excerpts

2nd reading & 2nd reading: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution
Monday 27th April 2020 Commons Chamber

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It really is a pleasure to be back in this place today. I welcome the bold steps that have been taken by the Government since the Budget, which seems like aeons ago, and the subsequent support in the Coronavirus Act 2020 and in the Chancellor’s settlement. I particularly welcome the support for start-ups, of which my constituency has many, especially in the Shoreditch part of Hackney South and Shoreditch. They will be the engines of the future economy, so the move is very welcome. None the less, some very big issues obviously exist, so while those bold steps were necessary—I pay tribute to the Chancellor, to the TUC and to so many others who have contributed to this thinking—we do need to have some answers to some very important questions. I want to rattle through some of them before touching on a couple of other very important issues around the Budget.

Will the Minister today confirm that the coronavirus business interruption loan scheme does not require a personal guarantee by businesses? Only today, I spoke to a business in my constituency, which has been hampered in trying to get this loan because the bank has asked for a raft of personal information about the financial arrangements of every director of that company. This is a company that has praised the Government for the furloughing scheme, but that is struggling on this point. We have heard that that personal guarantee is not necessary, but really clear guidance is needed from the Government to make sure that those banks that were bailed out in 2008, as the hon. Member for Wellingborough (Mr Bone) highlighted, are going to support the economy now.

One of the big issues in my constituency relates to other forms of work. There are those who are self-employed, those who freelance and the many people on repeated short-term contracts who fall outside the employment support schemes. The self-employed and, in fact, most of those workers will often have an accountant or will have very clear financial records, so just as the PAYE scheme has been reverse-engineered to support furloughing, there must be a way that HMRC and the Government can work together with those people to make sure that there is a scheme in place to support them.

Many people are really scared. The emails in my inbox are not from people I normally hear from. They are from people who are about to lose their jobs. They are people who never thought that they would be in a position to have to consider claiming from the state, but they actually cannot even do that—they cannot even qualify for universal credit.

Another group caught up in this is sole directors, including those of personal service companies. I can relate an ironic example that really highlights this matter. An occupational therapist working in the national health service was told by the NHS that, for liability reasons, she had to set up personal service company. She is a frontline health worker supporting our NHS and yet does not qualify for any of the business and employment support schemes. That surely shows this up as a nonsense. The chickens are coming home to roost in this crisis: the economy has split in a different way, which means that people are working in different ways and that businesses are setting up in different ways. They are now being penalised because of a system that grew up like Topsy, with little thought for the consequences.

I want to touch on the huge demand on the hardship fund, which is the responsibility of local authorities. Those local authorities are already overspending on this. Everything that is not quite fitting has to come from the hardship fund, which is a huge problem. The overall cost to local government is enormous, with many councils now effectively bankrupt. Although the extra injection of cash the other week was welcome, it will not be enough. We may have to be very careful post-cv-19 to ensure that those very councils, which were going to be the engines driving the support that people will continue to need, are well resourced to do that.

I want to highlight an issue around housing. In 1992 and in 2008, under Governments of different political colours, money was given to housing associations to buy up unsold properties. In 1992, a housing market package was in place to buy up properties on the street, and in 2008, unsold properties from private developers were bought up. That money was there to buy those houses to create homes for homeless families. Many people in my constituency are living in severely overcrowded conditions, including a woman with a seven-year-old daughter who has had four years in a single hostel room with shared facilities, and a mother and daughter living with grand- mother—one family in one room and one in another. I have many other examples like that. Such a move would keep the housing market going and, crucially, give a fillip to the social housing market and give people a chance, in the long-term future we want to see, to support themselves.

The £1 billion announced in the Budget for cladding is about a tenth of what is needed, but will the Minister tell me when we will get the detail on how that £1 billion will be bid for? If not, perhaps the Treasury will write to me. It was supposed to come in June, but with coronavirus it is likely to be delayed. When we reach the day of reckoning on the pounds that we are spending now that will have to be paid back, that is just one of many issues that will need to be sorted. Many of my constituents are paying over the odds to support things such as waking watch while they wait for that money to come and, because of coronavirus, those who were already hit hard are being hit harder still.

Coronavirus: Employment Support

Meg Hillier Excerpts

Thursday 19th March 2020 Commons Chamber

[John Glen]

My hon. Friend makes a very good point about the resilience required in banks at this difficult time. I discussed that with the heads of the banks last night and over the previous two days. We need to ensure that the terms of these loans are effective in allowing people to access them swiftly and we need to ensure that the banks can ramp up the accessibility of their specialist advisers. I have been given assurances that that will be in place.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

So many of my constituents are caught up in this, like those of other hon. Members, and I have constituents who have no recourse to public funds, so when they are unable to work they cannot claim benefits. Many are freelancers and people who are self-employed and running small businesses. None of the packages the Government have announced help them so far. The Minister has had to be dragged here to answer an urgent question and has nothing he can say that will comfort our constituents. I think we all recognise that it is difficult, but could he not even give us a clue about the general direction of thinking from the Government? Will he raise the local housing allowance? Will the Government ensure that those with no recourse to public funds get funded? Will they stop this ridiculous loan system, which will never get paid back? Businesses will go bankrupt before they can pay it, and they are laying off staff now.

[John Glen]

The hon. Lady raises a number of sensible points. We are looking at many of them. I reassure her that we will make further announcements very soon. Yes, we are looking at the ideas raised. We are looking at other jurisdictions. But in some cases we have a very different set of processes and IT systems behind some of these Government Department distribution mechanisms. I know that that is very technical, but the bottom line is that we need to ensure that when we introduce something, it delivers.

Economic Update

Meg Hillier Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rishi Sunak]

I thank my hon. Friend for his comments and am happy to look at what he is saying.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Many of my constituents are freelancers. One wrote to me unable to pay his rent or bills in the next couple of weeks. That is how urgent the situation is. Can the Chancellor give any comfort tonight for people who are very worried? They have been laid off today, have no ability to pay the bills and their freelance work has dried up. We are told that we have to wait for an answer from the Housing, Communities and Local Government Secretary. The Government have known that this was coming. Where is the planning? What answer does the Chancellor have now?

[Rishi Sunak]

For those people, the measures that we took last week will already start to help from day one. The Work and Pensions Secretary has already put in place support to make sure that access to the security that they need is both faster and more generous than it was.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 11th February 2020 Commons Chamber

[Rishi Sunak]

The local government pension scheme is fully funded, which means that all local authorities contribute on an annual basis. It is right that that is taken into account when setting annual budgets. I am pleased that the Government have outlined a three-year school settlement, which will take school funding up by £4 billion in real terms over the forthcoming spending period. Those extra resources will allow schools to deal with the pension pressure and invest in our classrooms, which is where the money needs to go.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It was extraordinary to hear the Treasury Minister talk about the biggest year-on-year increase in funding after a decade of major cuts. He knows, because he can do the maths, that that is nowhere near making any recompense. The Public Accounts Committee looked in detail at local government spending and we concluded that in simple terms, it was being squeezed massively, particularly for children’s and adult’s social services. When will he acknowledge that for many things that his Government purport to want to deliver, local government is key and that it needs sustainable and increased funding to make up for the cuts of the previous decade?

[Rishi Sunak]

Local government deserves enormous praise for the hard work that it did in helping to restore this country’s public finances to a sustainable state. We all know why we were in that situation a decade ago, but we can now look forward with confidence. Local government is benefiting from a very significant increase in spending power this year. The hon. Lady is right to highlight the pressure on social care, which is one of the largest areas of spend, which is why the Government have just committed an extra £1 billion in social care grant to help local authorities to alleviate that pressure this year and into the future.

Oral Answers to Questions

Meg Hillier Excerpts

Tuesday 7th January 2020 Commons Chamber

[Sajid Javid]

My hon. Friend will know that the NHS is this Government’s No. 1 spending priority. I just wish that it was the same for the Labour Government in Wales, who have let down Welsh people time and again, especially when it comes to healthcare. In the recent spending round in September, the Welsh Government received an additional £600 million, much of which can be put to good use in the NHS system in Wales. I hope that they are wise enough to help the Welsh people and, in particular, to look again at resurrecting Flint Community Hospital.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

One of the major crises is the recruitment of GPs, so it is not just money that needs to be thrown at the issues. What steps is the Treasury taking to ensure that when money is provided, it is spent well and, crucially, that it is not stop-start funding, so that the NHS can properly plan for the long term, particularly in the recruitment of frontline staff?

[Sajid Javid]

It is worth reminding Members that one of the reasons the NHS has so many problems, including with the recruitment of GPs and in hospitals, is the PFI policies of the previous Labour Government, which have cash starved many NHS trusts for far too long. We are now putting that right with our historic settlement. The hon. Member is quite right about the importance of recruiting more GPs to have more appointments, and that is why we set out in our manifesto exactly how we are going to do that.

Spending Round 2019

Meg Hillier Excerpts

Wednesday 4th September 2019 Commons Chamber

[Sajid Javid]

I want to take this opportunity to thank my hon. Friend for his campaigning and for the way in which he has worked with the Treasury and the Department for Education on this. I think he is referring to the f40 campaign, with which I am very familiar as a constituency MP. I am pleased that we have been able to make this huge step change in school funding, which I know has been welcomed across the country.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

After all the announcements over the summer, I had hoped for more detail today. The Chancellor and his Department might have a laser-like focus, but he can rest assured that the Public Accounts Committee will be delving through these figures and holding him to account.

As others have said, the Chancellor has indicated that he is going to change the fiscal rules. We already have an 85% ratio of debt to GDP. Can he advise us of the tolerance level that he would go up to in that debt level, and is he considering increases in taxation?