Covid-19 Economic Support Package

Taiwo Owatemi Excerpts

Wednesday 14th October 2020 Commons Chamber

[Taiwo Owatemi (Coventry North West) (Lab)]

I am pleased to be speaking in the debate today. Yesterday, my hon. Friend the Member for Oxford East (Anneliese Dodds) raised a pertinent question with the Chancellor regarding the economic support available to individuals and businesses in the areas subject to additional public health restrictions. We have repeatedly spoken in the House about the Chancellor being out of touch with the financial needs of the businesses, employees and employers in our constituencies, and he is proving us right yet again. I ask him: what good is the job support scheme to businesses in Coventry North West if it does not provide crucial support to employees in tier 1 and tier 2 lockdown areas if businesses choose to close because of coronavirus restrictions? I will tell him: it does absolutely nothing.

The Chancellor’s sink-or-swim approach to the job support scheme is letting down my constituents who will not be able to access it. The job support scheme provides less security to employees than the furlough scheme. My constituents will go from receiving 80% of their wages to just 66% on the job support scheme—and that is only if people can work a third of their stipulated hours. If they cannot work, they do not receive anything. What does the Chancellor think will happen to people on lower incomes and people on zero-hours contracts? I will tell him: it will push them further into poverty, and possibly into financial destitution.

Financial support will apply only to businesses in regions under a tier 3 lockdown that are forced to close. The Chancellor has called the scheme a safety net for businesses, but it will not be a safety net for businesses that choose to shut down; nor will it be one for businesses that are told to close by local public health authorities. I do not know what the Chancellor considers to be a safety net, but this is not it. The financial support offered by the Government will do nothing for those who have been excluded from support from the very start of this pandemic, and it will do nothing for businesses that are not forced to close but need to. This is not fair and not right.

Her Majesty’s Revenue and Customs estimates that there are several hundred thousand fewer people on payroll since the beginning of the pandemic, and economists expect unemployment to increase, so what is the Chancellor doing to safeguard employees? We have already established that many people will fall through the gaps in the new financial scheme on offer. The Bank of England has estimated that the unemployment rate may well be 7.5% at the end of 2020. In Coventry North West, unemployment claimant figures have risen to 4,815, and I fear that number could rise more.

The Chancellor needs to ensure that economic support goes hand in hand with the imposition of local restrictions. We cannot have a one-size-fits-all tier system: it is doomed to fail from the very start. Were Labour in government, we would put in place a job recovery scheme that fixes the problems with the Government’s scheme, so that employers can keep more staff on rather than having to let people go. This would ensure that no one on the scheme would fall into poverty, and it would be open to all businesses impacted by the restrictions. A tightly designed and targeted scheme would also ensure that money is spent where it is most needed.

Protection of Jobs and Businesses

Taiwo Owatemi Excerpts

Wednesday 9th September 2020 Commons Chamber

[Taiwo Owatemi (Coventry North West) (Lab)]

I have spoken passionately in this Chamber about the impact that the coronavirus pandemic is having on the livelihoods of my constituents. Ensuring that no one is left behind should be at the heart of the Government’s response to this economic crisis. As the MP for Coventry North West, it is my job to come to this place and secure the very best deal for my constituents, my neighbours and my community.

It is my contention that we are unprepared for the impending disaster that awaits people on the furlough scheme across the country and in Coventry North West. The scheme is masking the true extent of the unemployment crisis to come. We do not yet know what the furlough scheme has protected us and our constituents from. The Government put in place a scheme to ensure that jobs were protected, in the hope that our constituents would also be protected. However, the indiscriminate and premature severing of the furlough support scheme will leave the businesses in my constituency bereft and possibly at risk of bankruptcy.

Let me lay bare some sobering facts and statistics. Since my last speech in this place, I have learned that in my constituency the number of claimants for unemployment benefits has risen to 4,780, some 3,500 people are seeking help from the self-employed income support scheme, 17,000 people are on furlough and 7,600 jobs are in the high-risk category for unemployment. We have seen job losses at large, small and medium-sized businesses in Coventry—from Rolls-Royce to Ikea and many family businesses. The figures will hit the roof if the furlough scheme is not extended and better planning not put in place.

[Rob Butler]

The hon. Lady is telling us how she would very much like the furlough scheme to be extended; would she, by contrast to those on the Labour Front Bench, like to tell us for how long she believes the scheme should be extended?

[Taiwo Owatemi]

The furlough scheme should be extended for as long as the country and my constituents need it to be extended.

Why are this Government so comfortable with putting businesses and my constituents’ livelihoods at risk? With the threat of a second lockdown and the potential for other local lockdowns, surely it just is not worth the risk. Alternatively, rather than ending the furlough scheme completely, have the Government sought to reform it so that it continues to support jobs in the worst-hit sectors and targets aid to struggling industries—something Labour is fighting for in its five-point plan? We are also demanding that if and when people do return to work, they are in a safe environment and protected against the disease.

The Government would do well to heed our call to fight for jobs, bring back our businesses, leave no one behind, keep workers safe and drive job creation. There is no room for stubbornness in a crisis like this. The Chancellor needs to think creatively, be more flexible and target support to protect jobs in the hardest hit parts of the economy.

Finance Bill

Taiwo Owatemi Excerpts

Report stage & Report stage: House of Commons & Report: 1st sitting & Report: 1st sitting: House of Commons
Wednesday 1st July 2020 Commons Chamber

I fully support the calls by the Metro Mayors of the Liverpool city region and the Greater Manchester region, which Warrington North borders on either side, for us to build back better. We cannot as a country afford to make the mistakes that we made following the last economic crisis, when we saw an unprecedented transfer of wealth from the working and middle classes to the very richest. As my hon. Friend the Member for City of Durham (Mary Kelly Foy) laid out so eloquently, work has too often trapped people in poverty, rather than providing a route out of it. The Government must act to ensure that coronavirus cannot be used as a cover to drive terms and conditions down even further for our most precarious and poorly paid workers. The ambition of this Bill needs to be not just our immediate recovery, but a fairer, more sustainable economy that works for the many, not the few.

[Taiwo Owatemi (Coventry North West) (Lab)]

The coronavirus pandemic has revealed much of what we already knew about our jobs market and the deeply entrenched structural problems in our economy: insecure work, low-paid jobs, wages that are not rising as much as they should and our reliance on debt and consumer spending. However, this crisis offers an opportunity to provide a remedy to these problems and for the Government to act—to act decisively, to act now and to act in the interests of my constituents in Coventry North West and across the country, so that even more people do not lose their jobs and we can boost their incomes and recover from this crisis.

There are 13,100 people in my constituency who are on furlough and there were 4,630 claimants for unemployment benefits in May. These figures are staggering, and my constituents, as well as the millions who have lost their jobs across the country, demand action. I welcome the introduction of the furlough scheme. Labour called for the introduction of the scheme, which has provided a lifeline for my constituents. We need to ensure that businesses can keep workers on furlough.

[Alex Davies-Jones (Pontypridd) (Lab)]

My hon. Friend is making some important points. The Bill is not just about job creation; it is about job protection. So many people are being abandoned by this Government, and they desperately need saving to secure their livelihoods and protect their jobs now and for the future.

[Taiwo Owatemi]

I have been contacted by many residents who are extremely worried about the changes to the furlough scheme and their potential impact on unemployment. One of my constituents, James, recently got in touch with me to say that the company that his partner works for has already announced that it will be letting almost 40 employees go. The reason the company gave, I am told, was that the Government have asked employers to share the load of the furlough scheme from August. As can be imagined, staff at the company have been left heartbroken and have said that they feel this is completely wrong and runs contrary to the much repeated idea that a furlough scheme was a job retention scheme. James has said to me that while he understands that companies must ensure that they can continue to operate on a sustainable financial footing, it seems very unethical of the company to make the decision to reduce its numbers two months before that would start to become a significant financial burden on it.

The Prime Minister has repeatedly said that companies should not use the scheme just to keep employees on their books, only to get rid of them later, but should use it as a scheme to retain jobs. This compounds my view that the furlough scheme masks the true extent of the crisis in our jobs market. Since the start of the crisis, the Government have been too slow to take these threats seriously. We have seen very little from the Government around preventing unemployment since their economic package was created. If we do not take action now, we could see even more people lose their jobs.

This crisis requires a regional response, so that places such as the west midlands are not left behind. The Government’s one-size-fits-all approach fails to understand how our economy works. My own city has seen a devastating impact, with mass redundancies coming at Coventry College. Last week, I spoke about the impact on the aviation industry, with job losses at Rolls-Royce Ansty and in the arts and small businesses such as Exhibit 3Sixty. We need to protect our industries in the west midlands. That is why we need decisive rapid action to boost the economy, to provide small and medium-sized firms with the support they need, and to give businesses the strongest incentive to start creating jobs again.

My office has already started this work. Working alongside Coventry City Council, we are getting ahead of the response. I will not sit idly by while people in my community lose their jobs and vital skills. I have been holding a series of meetings with employment and skills agencies, as well as with Coventry and Warwickshire chamber of commerce and other business groups, to discuss supporting businesses during this time and upskilling people so that they can secure jobs for the future and find new work now. As part of its employment and skills priority for Coventry, the city council has been working with partners to host a series of virtual jobs fairs, with thousands of views and impressions to give people a head start. But this effort cannot be left up to us. The Government must do everything in their power to create support systems for those who become unemployed as well as new opportunities. We need to see the Government working with employers, unions and local government, with a joint approach across government to maximise job creation and comprehensive support to tackle unemployment.

[Matt Rodda]

Does my hon. Friend agree that there is a role for private sector landlords in this, working with the Government and local authorities? I have been quite taken aback by the approach of a number of commercial landlords who put extreme pressure on tenants at this time, which I believe is quite wrong.

[Taiwo Owatemi]

I agree with my hon. Friend; that is completely wrong.

No business or individual should be left behind. Every livelihood deserves the chance to survive this crisis. Otherwise, who knows what impact it will cause? Where there are job losses, will the Government commit to retraining those workers, whether old or young, through a future jobs fund so that they can harness the jobs that will come out of the crisis? Those jobs should be part of a new, prosperous economy, and they should be green, well-paid and sustainable. We do not need a race to the bottom, the slashing of safety regulations or the austere measures that we have seen in the past 10 years. The Chancellor said that he would do “whatever it takes” and frankly that is the least that my constituents in Coventry North West deserve. We have seen 18 years of growth and millions of jobs lost in two short months. To restore dignity, to save jobs and create new ones and to stimulate this much-needed recovery, bold progressive action is required. Nothing less will do.

[Mr Deputy Speaker (Mr Nigel Evans)]

If Judith Cummins wishes to speak until 8.39, she may do so. Otherwise, I need to call the Minister.