Financial and Social Emergency Support Package
(Limited Text - Ministerial Extracts only)
Read Full debate
The Financial Secretary to the Treasury (Jesse Norman)
It is a privilege to return to the Dispatch Box for the third time in two days, and I can only pay tribute to your fortitude and resilience in being in the Chair for much of the time I have been at the Dispatch Box, Madam Deputy Speaker. I am opening this debate on behalf of the Government and I would like to pay tribute now to the right hon. Member for Islington North (Jeremy Corbyn), in case this is his last appearance at the Dispatch Box as Leader of the Opposition. May I also associate myself with the very warm comments that he and others have made about Tristan Garel-Jones, who was widely loved and admired across this House?
I thank the Opposition and the leadership of the other political parties for their constructive and supportive approach over the past few weeks, which is reflected across the House. Truly, these are extraordinary times. Our country has not faced a threat of this magnitude since the second world war. It is astonishing to think that it was just two weeks ago today that my right hon. Friend the Chancellor of the Exchequer delivered his first Budget, standing at this Dispatch Box. I can say from direct personal experience that the Chancellor, Her Majesty’s Treasury and Her Majesty’s Revenue and Customs officials have worked around the clock before and since that time. Our single goal has been to do whatever it takes to support the British people at a time of crisis.
That Budget laid the foundations for a coherent, comprehensive and co-ordinated plan to limit, mitigate and address the impact of coronavirus, with a £12 billion package of support for public services, businesses and individuals. It was an unprecedented intervention by this or any recent Government, yet it has proved to be—and how—merely the first step. From the outset of the crisis, the Government have been clear that they are ready to do whatever it takes. Last week, we announced further support for businesses and individuals, including a £330 billion package of business loan guarantees. Only yesterday, I took through the House the Contingencies Fund Bill, which increased the cash-flow financing to Departments to £266 billion, pending the main estimates.
Sarah Jones (Croydon Central) (Lab)
There are reports that the announcement about the self-employed will be made on Thursday, when the House will not be sitting. Will the Minister guarantee that there will be some mechanism for us to question and prod the Government and get responses about the announcements that will be made when we are no longer here?
Jesse Norman
I thank the hon. Lady for her question. She will be aware, as we all are, of the issue relating to the self-employed. The Prime Minister and the Chancellor said that we will come forward with a package shortly. The House will rise by, I think, the common assent of all the political parties and in the knowledge that it is in the face of a crisis. When such a package is brought forward, there will be ample opportunity to debate and discuss it in the House when it returns. Before that, the Government will be held to account in the public square in the usual way, and Ministers are available for direct interrogation by any Member of Parliament who wishes to contact them.
Lloyd Russell-Moyle
Will the Minister arrange a Zoom call with all of us when that package is announced, so that we can be briefed and discuss it? I ask for a simple yes or no—it would be really easy to do and it is secure enough, because we will be asking clear questions in public.
Jesse Norman
It is not in my power to say yes to that, I am afraid, but the request has been noted and, of course, I will pass it on.
I think I can speak for everyone in this House in wanting to put on record my thanks to all those across Government, in Parliament and in our public services who have made this astonishingly fast speed of reaction possible. The result has been an unparalleled package of measures that we have brought forward with great rapidity and resolve, and I pay tribute to them for that. I reassure the House that Ministers and officials continue to work day and night to consider how best to provide further support, including for the self-employed, which I will touch on later.
Ultimately, however, success in defeating this virus rests not with Ministers and officials in Whitehall, but on the actions of millions of individual people throughout the country. Our common aim must be to reduce the rate of infection and prevent the national health service from becoming overwhelmed. In that way, our doctors and nurses, and all those who support them, can focus on helping those in greatest need. Every man, woman and child can be a lifesaver by staying at home, only venturing out when strictly necessary for food, medicine and essential exercise, and even then staying at least two metres away from other people.
The Government are in no doubt of the scale of the challenge. The action that we must take collectively represents a profound, but temporary change to our way of life in this country. Indeed, it runs counter to human nature.
Stephen Timms (East Ham) (Lab)
Does the Minister recognise that, in order to be able to stay at home in the way he is describing, people need financial support? Will he respond to the shadow Home Secretary’s earlier point that large numbers of people working legally in the UK have no recourse to public funds? At the moment, there is no support available to enable them to self-isolate in the way he is rightly advocating.
Jesse Norman
I thank the right hon. Gentleman for the question. Of course, if people are falling through the social safety net as it presently exists, we will stand ready to address that and support them. He will recall that when the Prime Minister was Mayor of London he called for an amnesty on illegal immigrants and others, so he has a wide and capacious interest in that area.
Mr Dhesi
I thank the Minister for allowing me to intervene. He will have heard about today’s shocking and saddening terrorist attack on a Sikh gurdwara in Afghanistan. I am sure he will join me in expressing sincere condolences to the victims’ families, many of whom live in the UK. My right hon. Friend the Member for East Ham (Stephen Timms) has mentioned those with no recourse to public funds. Does the Minister agree that it is also very important that the Home Office takes into account those minorities who are seeking asylum and that they are given adequate support during this time of crisis?
Jesse Norman
I thank the hon. Gentleman for the question. I was not aware of the attack—I am afraid I have been focusing on our response to the coronavirus—but of course I share his concern and send our deep sympathy and condolences to the families of those involved. He has registered in this conversation in Parliament his point about the Home Office. We will, of course, provide support to them in the usual way in reaction to the coronavirus, as we would to any person living in this country.
Let me press on. As the Leader of the Opposition has rightly pointed out, the action of distancing one from another runs counter to human nature. We value our relationships with our friends and our family more than anything else. Communities thrive through social interaction. He rightly spoke of our interdependence, and this bears that out. Of course, businesses also rely on their physical as well as online connections to consumers in this country and overseas. When we think of people co-operating, let us not forget that business and, indeed, markets are often forms of human co-operation themselves. However difficult and painful this may be, at the present moment it is nevertheless essential. We must all play our part in this gigantic collective effort. Only through discipline, patience and community spirit can we turn the tide together. Now is the time for the country to come together behind this goal. As Burke said, the nation is a moral idea. It is the legitimacy of the nation that underwrites our capacity to intervene in people’s lives, and it is only by believing in each other that we will succeed in doing so.
The response from across the United Kingdom has already been magnificent—from the thousands of former medical staff now returning to the frontline alongside student nurses who have opted to begin their NHS careers early, to the world-class engineering firms working with us to ramp up production of ventilators, to the men and women of our armed forces, both regular and reserves, stepping up once again to serve their country. Coming from Hereford, I cannot think of them without paying them a special tribute.
I also pay tribute, as the Leader of the Opposition has done, to the thousands of key workers—shop assistants, pharmacists, delivery drivers, cleaners, police, firefighters, teachers and many others—who are keeping essential services running at this critical time, and of course to the legions of volunteers who are mobilising to support the elderly and vulnerable in their community. I have myself signed up for the NHS volunteer programme—it was a very straightforward process—and I would encourage any Member of this House who feels so inclined to do the same thing.
The whole country is united in common cause. We are a nation and a people with strength in depth, yet this pandemic represents a deep shock to the global economy. In this country, many of the restrictions now in place go even beyond some of those seen in wartime. There is concern among business for the future, among people for their jobs and wages, and among all of us for our loved ones and our neighbours. We in Government recognise all those concerns.
David Linden (Glasgow East) (SNP)
I am immensely grateful to the Minister for giving way. It is right that he talks about key workers, but over the last 24 to 48 hours my inbox has been overflowing with messages from constituents who are being required to attend work, including people who work in home furnishings and as sales staff in call centres. I understand the need to be bipartisan in these times, but may I say very gently to the Minister and the Health Secretary that the messaging from the Government on this particular issue has, by and large, been pretty poor? We have a situation where, frankly, workers are being exploited and called into work when they do not need to be there.
Jesse Norman
I am grateful to the hon. Gentleman for registering that point and putting it on the record. I will come to the question of communications, and perhaps I can include that point when I do.
As I have said, we stand ready to do whatever it takes to protect our society and economy. The first task has been to buttress our frontline public services. In the Budget, my right hon. Friend the Chancellor announced a package of support for the public sector—notably a £5 billion covid-19 response fund. Those investments will save lives here and now, and will also fund the research, diagnostic testing and surveillance that will bring the virus to heel over the longer term.
Meanwhile, the Government are working with the business community to bring our nation’s scientific, industrial and commercial expertise to bear behind the public health effort. We are seeing examples of this “can do” attitude all the time, as red tape is slashed, timeframes are condensed, and the public and private sectors pull together as one. Let me give one example. Her Majesty’s Revenue and Customs is fast-tracking applications to authorise the production and use of denatured alcohol. That means that Scottish distilleries and others can turn the ethanol that they have over to the production of alcohol-based hand sanitiser. The usual turnaround time for such requests is 45 days. Since the beginning of March, HMRC has cut that to five days. This has resulted in an additional 2.5 million litres of alcohol for sanitiser being authorised in the last three weeks. We have now gone even further; as announced on 23 March, licensed distillers and gin producers operating in excise warehouses may now use their stocks to produce hand sanitiser without HMRC approval, provided that it is made to World Health Organisation standards or the alcohol used is denatured to the prescribed formulations.
Here, as elsewhere, we see a common approach: decisive action as soon as we can take it; feedback, often from colleagues across Parliament; and improvements as we go. We now have excellent consolidated information on coronavirus available through a single link on gov.uk, and there is specific guidance for businesses from the Department for Business, Energy and Industrial Strategy on a new web page. I had a text message myself from the Government yesterday and the Prime Minister’s broadcast was watched by 27 million people, so I think it is fair to say that the message is getting out there. We have even had Ministers leaving behind their red boxes in order to work online. We know that we must be in the grip of a national crisis when Ministers leave behind their red boxes.
Dr Huq
I am pleased that the Minister is giving us some good news about this advertising campaign—at last, because it seems to have been a bit slow. Could he shed light on two anomalous categories of business, examples of which have contacted me? Buttons Nanny Agency says that domestic staff fall into the category of workers who do have to physically turn up, but it is not clear whether they will retain 80% of their salary; they are in a strange and anomalous position. What is to be done about them? West London English School is a private language school that falls above the rateable value level, but it is an educational service. It is very worried that it is about to shut down. The rateable value of many businesses in my constituency is above £51,000 because it is London and it is different here. Could the Minister do something for them? Very briefly, let me also say that domestic violence is set to rise. Where has the abortion amendment gone? Many of us are concerned that it seems to have vanished.
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.
Bill Esterson (Sefton Central) (Lab)
I will read out what Barclays is saying to businesses about personal guarantees:
“Loans will need to have a director’s guarantee, or in the case of partnerships and sole traders, you will be personally liable”.
If a person’s only asset is their home, pledging it and being liable amount to the same thing. Will the right hon. Gentleman deal with that problem? That quote was read to me by a person from a company that will now have to lay off its staff and close, and so will not be eligible for the furlough scheme. This will hit workers as well as businesses.
Jesse Norman
I cannot comment, obviously, on the specific circumstances that the hon. Gentleman describes, but I can certainly say that the Economic Secretary to the Treasury is working very closely with the banks to make sure that no business is forced to close as a result of coronavirus.
Jesse Norman
We have discussed this quite a lot, so as I have quite a long speech, and a fair number of colleagues want to speak, I will press on, if I may.
We must face facts: it may take several weeks—possibly longer—before this national effort is reflected in a fall in infection rates, and it may take longer still to defeat the virus completely, but however long it takes, we will do what we can to support businesses and workers. As the House will know, under the jobs retention scheme, the Government will pay 80% of staff wages up to £2,500, provided businesses keep those staff employed. Her Majesty’s Revenue and Customs is working tirelessly to get the scheme up and running. The first grants will be made in a matter of weeks.
Of course businesses face cash-flow concerns, and we are recognising that through the business interruption loan scheme. For larger enterprises, the Bank of England is providing a new facility to help overall liquidity, and HMRC’s existing time to pay arrangements are available to help businesses make ends meet. We have deferred VAT payments for the next quarter, so that VAT-registered businesses will not need to pay VAT alongside their normal returns; that intervention alone is worth over £30 billion. Those measures are on top of those announced in the Budget earlier this month.
As colleagues across the House have mentioned, this is a particularly worrying time for the self-employed. I am acutely aware, as are all Ministers, of how deeply these concerns are felt across the House. Let me be clear that the Government recognise the specific challenges that self-employed people face. We will respond shortly. There has already been discussion of this, and a commitment from the Prime Minister on this issue, with tailored and targeted action. As the Chancellor has said, this problem is very far from straightforward. We are trying to be as inclusive, but also as fair, as possible.
Jeremy Corbyn
Could the Minister tell us how quickly this will be done, because the levels of stress out there among the self-employed are absolutely huge?
Jesse Norman
I understand that. The right hon. Gentleman will appreciate that if we date the official recognition of the need for intervention on coronavirus from the Budget, we are two weeks into the situation. The Prime Minister knows the situation; he made a commitment to the right hon. Gentleman an hour or two ago, and I cannot do better than the Prime Minister.
As of Monday, sole traders and freelancers have been able to gain access to the coronavirus business interruption loan scheme, provided that their activity is channelled through a business account. We are removing the universal credit minimum income floor, so that self-employed workers have access to universal credit, and we have deferred the next deadline for self-assessment income tax payments until 2021, so that self-employed people can manage their finances better over the course of the year.
It goes without saying that more needs to be done and, as I have said, we will do that, but as my right hon. Friend the Chief Secretary to the Treasury made clear to the House yesterday, it is essential that that support reaches the people who need it the most. The Chancellor will provide a further update, as I have described, shortly. Until then, the Government will continue to listen carefully to hon. Members and, crucially, to those most directly affected. As the House knows, just as we are supporting businesses and employees, so we are also supporting families through the crisis. Those on low incomes will benefit from a package of measures worth more than £6 billion, including a £20 a week increase in universal credit standard allowance and the working tax credit basic element—an increase from £318 to £410 a month for a standard claimant over the age of 25. Those who are new to universal credit will not be required to attend assessment interviews. Advances for those claimants who need them will be available by phone or online.
Through these measures and others, the Government are absolutely clear that the burden of this pandemic must not fall on the lowest paid. We are particularly mindful of the needs of the most vulnerable members of our community and the charitable organisations that are working so hard to support them. The jobs retention scheme is available to all PAYE employers, including charitable and not-for-profit organisations. Furthermore, the business interruption loan scheme is applicable to social enterprises and to charities that receive half their income from trading. Charities will also benefit from a three-month VAT deferral to the end of June, and many are already eligible for 80% charitable rate relief as well, and, of course, as you will know, Madam Deputy Speaker, we are giving councils an additional £500 million in hardship funding to ensure that help is available for the most vulnerable people in our society who may be struggling to pay council tax bills.
Sarah Jones
On the point about the extra funding for councils, when I was talking to my own council yesterday it says that that will barely cover the number of people who will be applying for council tax relief; it will just fill that hole. It is looking at things such as the grant scheme. The loans that it will have to administer will amount to £50 million in my borough of Croydon, and there is no system in place yet to help it to understand how it is supposed to administer them, how it will work, and, indeed, how it will fund the support for the very vulnerable, many of whom are already struggling and will be struggling increasingly over the coming weeks.
Jesse Norman
I thank the hon. Lady for registering that point. She will be aware that we have made £1.6 billion available to support local authorities, and, of course, we are specifically supporting them by bringing forward the cash-flow element of business rates. We are leaning into this problem hard, but I thank her for putting the concern on the record.
It has been suggested that this may be the Leader of the Opposition’s final outing at the Dispatch Box. I am sure the House will not welcome that. I will leave it to others to write any political verdict or obituaries that may come, but let me say that no one in this House—certainly not I—would doubt the sincerity and the commitment that he has shown to his beliefs over many, many years, however vigorously we may disagree with them. For myself, I believe in a big society rather than a big state, but let us be clear that, in a time of national crisis, both will be needed. Finally, I think I can speak for my colleagues on the Conservative Benches in saying that we will be sad to see him go.
The coming weeks may be difficult. The action that we have taken has far-reaching consequences for our economy and our society, and yet it has the power to save thousands of lives. Throughout this time, the Government will continue to listen to the concerns of hon. and right hon. Members and of the public. They have already delivered one of the most generous and comprehensive interventions of any Government of the world, and we stand ready to do more. We will make every effort to safeguard people’s jobs and livelihoods, to support our public services and local communities, and to preserve and protect businesses, large and small, across the country. Our message is this: we have got your back and, together, we will defeat this virus and the Britain that emerges from this pandemic will be not only stronger and more resilient, but more united, too.