House of Commons
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Oral Answers to Questions
(4 years, 6 months ago)
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Julian Sturdy (York Outer) (Con)
Nigel Mills (Amber Valley) (Con)
Brendan Clarke-Smith (Bassetlaw) (Con)
Lee Anderson (Ashfield) (Con)
Mrs Flick Drummond (Meon Valley) (Con)
James Cartlidge (South Suffolk) (Con)
The Secretary of State for Education (Gavin Williamson)
I am determined to help learning continue in these challenging times. We have committed over £100 million to provide devices and internet access to vulnerable children and published a list of high-quality online educational resources, and we continue to support parents and teachers in supporting children at home.
Julian Sturdy [V]
Headteachers in York have told me of their frustration that they will have to wait at least another month until they can provide students with laptops under the Government’s scheme. What assurances can my right hon. Friend give me that support will be available to schools in the meantime to help their most disadvantaged students learn from home?
Gavin Williamson
As I am sure my hon. Friend will understand, £100 million for computers and other support for schools is a major investment, and it takes a while for these resources to arrive at schools. We have already notified multi-academy trusts and local authorities of what resources they will be getting, and we continue to work to provide resources, with the BBC providing resources in the homes of children right across the country.
Nigel Mills [V]
Parents across Amber Valley have been doing a fantastic job of supporting their children to continue to learn while their schools are closed. Will my right hon. Friend join me in thanking them and set out what more we can do to support them to help their children continue to learn?
Gavin Williamson
I would very much like to join my hon. Friend in thanking the teachers and all the support staff who have done so much to support home learning and ensure that schools remain open for the children of critical workers and the most vulnerable children. We have seen the launch of the Oak National Academy, which is providing educational resources for children of all ages to support them in their learning, and we are looking at putting more and more resources online, to help schools and, most importantly, to help children continue to learn.
Brendan Clarke-Smith [V]
I very much welcome the funding for IT equipment, because there is nothing worse than when computer says no. Can my right hon. Friend confirm that the laptops and tablets provided to disadvantaged and vulnerable young people will not just benefit them while schools are closed, but will continue to be used by their schools to aid learning in the future?
Gavin Williamson
My hon. Friend is right in his analysis. It is not just about helping children during this crisis; it is about helping and supporting children for many months and years to come, ensuring that schools continue to have that resource and helping many children through that resource over a long period. We recognise that a lot of work needs to be done to support children as they catch up on what they have missed, because there is no substitute for a child being in a classroom, learning directly from a teacher.
Lee Anderson [V]
School closures will, of course, affect children of all ages and backgrounds in different ways. Children from more disadvantaged backgrounds are much less likely to have access to the internet via a mobile or tablet. Will the Secretary of State confirm that devices with internet access are being sent to disadvantaged children, so that they can learn online more easily? That would certainly help to ensure that the disadvantaged children in my constituency of Ashfield and Eastwood, which the Minister visited recently, are not further disadvantaged by this crisis.
Gavin Williamson
I had the great privilege of joining my hon. Friend on a visit to Leamington primary school in his constituency, to see the amazing work being done there. We have made substantial investment in not just laptops but 4G routers, to ensure that families have better access to the internet and that children can benefit from the brilliant resources, many of which have been made available for free by people, companies and organisations, to allow children to continue to learn.
Mrs Drummond [V]
Will my right hon. Friend join me in congratulating schools in Hampshire on their success in ensuring that 31% of vulnerable children are attending school, and in thanking all the teachers, school staff and children, particularly those in Meon Valley, for their hard work both in school and at home? Has he assessed the impact on the mental health of children and young people during the coronavirus crisis?
Gavin Williamson
I do indeed join my hon. Friend in thanking the teachers, the support staff, the social workers, Hampshire County Council and all those who have been involved in making sure that schools stay open and available for vulnerable children. They have done amazing work. The attendance rate she highlights is truly outstanding. Since the Easter holidays, we have seen a doubling of the number of vulnerable children who are attending school, and that is down to the work of teachers, school staff and social workers, reaching out and encouraging them to come into school. Mental health, which my hon. Friend also raised, is an important issue. That is why we have committed £5 million of funding to support charities to help children with mental health concerns and issues while they are at home.
James Cartlidge [V]
While schools are closed, the issues of home-school transport affecting my constituents have effectively been paused, but they will come back eventually and potentially result, for example, in siblings having to go to separate schools. Although this is a county council matter, the Government issued a consultation on home-school transport last October, and five Suffolk MPs, including me, wrote to the Government asking them to consider changing the guidelines to state that siblings should not be separated by changes in school transport policy. Has my right hon. Friend had time to consider that consultation, and will he publish the response soon?
Gavin Williamson
The consultation closed in October last year. We were hit by twin issues of purdah being imposed and now, obviously, our principal focus being on dealing with the coronavirus. We hope to respond to the consultation in the near future, but I am not currently in a position to give my hon. Friend an exact date.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Constant speculation on when schools will reopen and whether it is safe to do so is leaving many parents, pupils and staff anxious. Last week, it was reported that the Government were looking at best practice in other countries; this weekend, it was reported that the Government would reopen schools for year 6 pupils on 1 June; and last night, it was reported that there were discussions in Government about giving schools and multi-academy trusts the flexibility to decide for themselves, amid concerns that Ministers were coming under pressure to help to kick-start the economy. I am sure the Secretary of State will want to reassure parents, pupils and staff that their safety is the Government’s No. 1 priority, so will he clarify the basis on which the Government are making decisions on school and college opening, and when will he make the scientific advice supporting his strategy publicly available?
Gavin Williamson
First, let me take this opportunity to congratulate the hon. Lady on her new appointment. I appreciate the time she has made available to speak with me, and I hope the regular briefings from officials that we are providing are of considerable assistance to her, as I think they were to her predecessor.
All SAGE advice is made public, and we will certainly do that. On the return of schools, I am sure the hon. Lady shares my desire for children to be given the opportunity to return to school when it is the right time to do so. The decision will be based on the scientific and medical advice that we receive. I assure her that we will take a phased approach to reopening schools, and we will always aim to give schools, parents and, critically, children maximum notice of when that will happen.
Rebecca Long Bailey
I thank the Secretary of State for his kind comments. He must understand that faith that children and staff are safe will be necessary to parents having the confidence to send their children to school, but nearly 1 million pupils in English schools are in classes of 31 or more—an increase of 28% since 2010—so there is understandable concern that social distancing will be difficult in schools. Everyone wants a return to vital education to support pupils and to stop the ever-widening attainment gap, but does the Secretary of State agree that first we need a national plan for social distancing and personal protective equipment, evidence of a sustained downward trend in cases, comprehensive access to testing for staff and pupils, a whole-school strategy for when cases emerge, and protection for the vulnerable? In the words of the National Education Union:
“Anything else will be a dereliction of duty from government”.
Gavin Williamson
I think the hon. Lady would very much appreciate the fact that I take my responsibilities for the safety and the health of children who attend school as the absolute principal motivation for everything I do, as is the case for those who work in schools. I always welcome constructive dialogue with her, which is why we have made every effort to do so, about how best we can support children to be in schools. Let us not forget that the overwhelming majority of schools—over three quarters of them—are currently operating in a safe, considered and proper way, supporting the children of critical workers as well as those children who are most vulnerable in society. Every step we take is about making sure that we look after those who are the most important part of our society, and that is our children, but also about supporting those who work in educational settings.
Henry Smith (Crawley) (Con)
The Secretary of State for Education (Gavin Williamson)
Schools remain open to children in care, and local authority virtual school heads are actively tailoring their expert offer of advice and support to all children on what they are learning in schools. For those not attending, we have made it clear to local authorities and schools that they should be doing everything they can to maintain contact with and support for children not attending school.
Henry Smith [V]
What specific support during the covid-19 pandemic is being provided for children in care and children with special educational needs, such as dyslexia?
Gavin Williamson
We have been working right across the sector to make it absolutely clear that we understand the need for very specific, tailor-made guidance for a lot of children in special educational needs settings. We have been working with special schools to be able to provide that. We have also been providing tailored advice, support and resources online for children with a whole spectrum and range of special educational needs, as well as on how we support families to give education at home.
Mr Speaker
I welcome Tulip Siddiq to the Front Bench. I call the shadow Minister.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Thank you, Mr Speaker. Last week, the Children’s Commissioner for England, Anne Longfield, said that the Government’s latest reduction in legal protections for children in care without proper scrutiny or an opportunity to scrutinise was not justified, given that the staffing in social care is “holding up”. The Labour party agrees with the Children’s Commissioner for England. Does the Secretary of State also agree with the Children’s Commissioner for England?
Gavin Williamson
On the regulations we have laid, we worked very closely with the ADCS—the Association of Directors of Children’s Services—on how we make sure we do everything we can to maintain the very best support for all children when they are in care. It and the sector have specifically asked us to make sure that some flexibilities are made available to them. This is a temporary measure that we have taken in response to concerns that people have raised about making sure they are able to provide the best care for the most vulnerable children. It is certainly not something that is going to be continued once we are through this crisis.
Robert Halfon (Harlow) (Con) [V]
First, will my right hon. Friend thank the teachers and support staff of Harlow, who have been doing everything possible to teach children of critical workers and vulnerable children over the past few weeks? Given that only 5% of vulnerable children are being educated in schools, nearly 50% of under-16s are potentially being exposed to online harms and possibly two thirds are not accessing online education, does my right hon. Friend agree that a catch-up premium, with tuition, mentoring and wellbeing, will be necessary for these vulnerable children as schools begin to reopen once again?
Gavin Williamson
I certainly will join my right hon. Friend in paying tribute to the teachers and all those who work in schools not only in Harlow but right throughout the country for the amazing work that they are currently undertaking.
We are working closely on how we ensure that every child in this country has the ability to catch up, and I was interested to hear my right hon. Friend’s ideas. We are looking into how we can take forward some of those concepts, including the enormous good will among the British public, to help to support children to make sure that they do not miss out as a result of this crisis. We need to make sure that that is not just an idea but actually becomes a reality.
Steve Double (St Austell and Newquay) (Con)
The Parliamentary Under-Secretary of State for Education (Gillian Keegan)
T-levels are based on the best international examples of technical education and, crucially, they are employer designed. They will help to raise the quality and prestige of technical education across the UK, with longer teaching hours and a meaningful industry placement. I am confident that they will provide a high-quality alternative to A-levels, giving technical education the status and recognition that it deserves.
Steve Double [V]
I thank the Minister for that answer. It is clear that T-levels will have a valuable part to play in ensuring that we have the workforce of the future across the economy, but the sector of the economy that is being most adversely affected by the current crisis is hospitality, and it is vital that that sector is able to access the workforce that it will need to recover, particularly in a post-Brexit world, so will the Minister please consider bringing forward a T-level in hospitality as soon as possible?
Gillian Keegan
I agree with my hon. Friend: equipping people with the skills that they need is crucial to our economic recovery, particularly in St Austell and Newquay. To support tourism and hospitality, which are important to his constituency, we will offer T-levels in cultural heritage and visitor attractions, catering, and management and administration. I hope that, with my hon. Friend’s support, T-levels will be available soon so that young people in St Austell and Newquay can benefit from a high-quality technical education.[Official Report, 1 July 2020, Vol. 678, c. 2MC.]
Joanna Cherry (Edinburgh South West) (SNP)
Owen Thompson (Midlothian) (SNP)
The Minister for Universities (Michelle Donelan) [V]
I take this opportunity to thank all staff in the further and higher education sector for their hard work in responding to this unprecedented challenge. I reassure the House that we have protected grant funding for the FE sector for the full year, and we will provide additional targeted support. Yesterday, we announced an HE package of measures to boost support for students, stabilise the admissions system and ease pressures on universities’ finances.
Joanna Cherry [V]
I thank the Minister for her answer. A survey by the National Union of Students has shown that 85% of working students will need additional financial support after losing their jobs as a result of the current crisis. With rent being the most significant financial demand on students, will the Minister tell us what discussions she has had with the private rental sector to ensure that students are not being charged for rooms that are lying empty?
Michelle Donelan
We understand that this is a difficult time for everyone, including students, which is why we have worked with the Office for Students to help providers. We have reallocated funds totalling £46 million for April and May for hardship funds for students. On accommodation specifically, we have sent the clear message that accommodation providers need to be fair and transparent in their policies for students. The Treasury has announced additional measures to protect renters who are tenants.
Owen Thompson [V]
Researchers at the University of Edinburgh’s world-leading Roslin Institute in my constituency are at the very heart of the global fight to find solutions for covid-19, but such higher education institutions are struggling to get the support that they need through existing Government schemes. Given the complexities of the funding models for higher education and the immense impact of the lockdown on such institutions’ current and future finances, will the UK Government provide a support package specifically tailored for jobs in the higher education sector, to support the economy and their covid-19-fighting efforts? What additional support is the Minister seeking to support research groups throughout the UK?
Michelle Donelan
We should not underestimate the impact of the package that we announced yesterday, which builds on the Treasury announcement that universities are eligible for Government financial support worth at least £700 million. This package also brought forward £100 million of research funding. We have also brought forward £2.6 billion in tuition fees to help with cash flow. Most fundamentally, this is a package that is designed to stabilise the higher education sector and safeguard it as a whole.
Carol Monaghan (Glasgow North West) (SNP) [V]
May I take this opportunity to welcome the new Labour Front-Bench team to their positions and also to pay tribute to all those working in the education sector to support our young people through this pandemic?
The £100 million of quality-related research funding that the Minister has just referred to is research for England. Can the Minister confirm that this is indeed new funding and that these increases to the English QR grants will deliver Barnett consequentials for universities in Scotland?
Michelle Donelan
I can confirm that this is QR funding that has been brought forward for English universities, but the hon. Member will have noted in the announcement yesterday that it also included a research taskforce designed to prioritise safeguarding our research base. That is a cross-governmental taskforce on which the devolved Administration Ministers will have a seat.
Robert Courts (Witney) (Con)
Steve McCabe (Birmingham, Selly Oak) (Lab)
Barbara Keeley (Worsley and Eccles South) (Lab)
The Parliamentary Under-Secretary of State for Education (Vicky Ford) [V]
We have two key priorities at this time: making sure that there is sufficient childcare for critical workers and vulnerable children; and ensuring the longer-term sustainability of the vital early years sector. Therefore, the Government will continue paying local authorities for the hours that we normally fund, and, where appropriate, providers can also access business rates relief, grants, a business interruption loan and the self-employment support scheme, which is especially helpful for childminders. In order to retain staff, providers can also furlough up to the proportion of their salary bill that would normally be considered as being paid from non-public funding sources.
Robert Courts [V]
I thank the Minister for that answer. With a young son at a local nursery—I declare that interest—I am acutely aware of the pressures faced by early years providers at this time. The Government said that they expect childcare providers and local authorities to work together to ensure sufficient childcare for children of critical workers and vulnerable children, but will the Minister also confirm that she will do everything in her power to support our vital early years providers, including meeting representatives to understand what more it might be possible for her Department to do?
Vicky Ford
My officials and I are in continual contact with early years sector organisations through regular meetings and working groups and feed their messages right into the heart of Government. We have put £3.6 billion into the sector through funding the entitlements this year and will continue to ensure that providers get the best possible support on the many different Government schemes while also staying within the rules. We also have a new announcement for parents. Parents who are normally eligible for the Government’s free childcare will continue to be eligible for those entitlements during this summer term, even if their income levels have changed because of the virus. This will be a massive support to families as well as to providers.
Steve McCabe [V]
Nurseries and childcare providers have struggled to stay open during this crisis. The Minister will know that the confusion over the Department for Education statements on free entitlement and the furlough scheme has caused many financial headaches. Last week, the First Secretary of State said at PMQs that if those providers were finding it too much to bear, the Government will look “afresh” at what can be done. Can the Minister tell me when the Secretary of State will look afresh at what needs to be done, and, given that the Minister is regularly in touch with nurseries, will she tell me the last time that she spoke to the nurseries and childcare providers in my constituency, because they do not seem to know about plans to rescue their provision?
Vicky Ford [V]
I spoke to early years organisations only last week, and speak to them on a weekly basis through my officials and in meetings that I join regularly. On the coronavirus job retention scheme, the initial guidelines were first published by the Government on 26 March. I am sure that Members understand that it would not be right for providers—or, indeed, any business —to receive two Government incomes for the same costs. We have worked closely with the sector to clarify this position, and will always make sure that early years providers get the best support possible. This will be an important discussion at the next spending review—
Barbara Keeley (Worsley and Eccles South) (Lab) [V]
Changing the guidance on the job retention scheme at the last minute has pulled the rug from underneath many nurseries and childcare providers. A survey by the Professional Association for Childcare and Early Years has found that 40% of childminders are not confident that their business will survive this crisis. Despite the answers that the Minister has given, there is a lot of confusion. Will she do the right thing and bring forward a comprehensive plan to protect the childcare sector during this difficult time?
Vicky Ford [V]
The guidelines were first published on 26 March, and we will continue to work with the sector to provide clarity to ensure that it can access, as far as possible, every single set of Government support that is available at this time. We will continue to work on supporting this vital sector.
Paul Bristow (Peterborough) (Con)
The Secretary of State for Health and Social Care (Matt Hancock)
We are providing up to £200 million to hospices over the next three months to support their work alongside the NHS as part of the national response—by, for instance, providing spare bed capacity in community care to take pressure off hospitals, supporting vulnerable patients, and, of course, supporting those in need of palliative care. I am sure that my hon. Friend will be pleased to know that Sue Ryder, which runs one of his local hospices, received £5.9 million in April.
Paul Bristow [V]
I thank my right hon. Friend for that answer. It is indeed great news that the Government are providing £200 million for those nearing the end of their lives. When does he expects hospices such as Thorpe Hall to receive that funding? In recognition of just how vital palliative care is, might we look to reform the way in which we commission palliative care when this crisis is over?
Matt Hancock
There are lots of things that we will need to learn when this crisis is over. The hospice system has always had a mixed model of funding—a very strong history of philanthropic support, as well as support and financial funding for the services it provides that the NHS commissions. The funding has started to flow. If there is a specific problem locally, I would like to know about it, and then we can get to the bottom of it.
Sir Robert Neill (Bromley and Chislehurst) (Con)
The Secretary of State for Health and Social Care (Matt Hancock)
We expanded testing to all symptomatic essential workers and members of their households last month. As capacity continues to increase, we have been able to go further still, with all those who have symptoms and who have to leave home to go to work—and members of their households—now able to access a test. This is all part of the overall testing strategy, with the 100,000 tests that are now available.
Sir Robert Neill [V]
Testing of staff and residents at care homes in my constituency is being delivered by referrals either through the Care Quality Commission or through the pilot partnership that has been set up between our hospitals trust and our clinical commissioning group. In relation to the CQC, will my right hon. Friend examine why test results are taking five to seven days to come back, rather than the estimated 72 hours? In relation to the pilot scheme, where tests are being delivered efficiently, why are care home managers given the names of residents who test positive but, for data protection reasons, not the names of staff who test positive? That is creating obvious uncertainty.
Matt Hancock
I am glad to see the roll-out of testing to care homes, and we are able to go further for both residents and staff. It is an incredibly important part of the response and one of the reasons why testing is so important. My hon. Friend raises two important issues of detail in the roll-out, and I will ensure that they are looked into.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
We need to be doing all we can to protect our key workers, especially those in healthcare. I welcome and note what the Secretary of State said about testing, but has he considered the study from Imperial suggesting that weekly screening of healthcare workers—testing them every week whether symptomatic or not—reduces their contribution to transmission by around 25% to 33%? Will he look at testing all healthcare staff whether they have symptoms or not?
Matt Hancock
Yes. The shadow Secretary of State has asked questions in a responsible and reasonable way, and I welcome his support for the test, track and trace pilot on the Isle of Wight that we announced yesterday. His question is quite right; we have piloted the testing of asymptomatic NHS staff in 16 trusts across the country. Those pilots have been successful, and we will be rolling them out further.
Mark Pritchard (The Wrekin) (Con)
The Secretary of State for Health and Social Care (Matt Hancock)
The development of a coronavirus vaccine is in its early stages but progressing rapidly. The Government have backed two promising vaccine candidates from the University of Oxford and Imperial College, and we are making over £45 million available to those teams—alongside the hundreds of millions that we are making available to the global vaccine search.
Mark Pritchard
I am grateful for the Secretary of State’s response. The World Health Organisation has undoubtedly made mistakes over covid-19 and needs deep reforms, but this global pandemic requires a global response. How is the UK liaising with the WHO so that we work together globally to beat this virus?
Matt Hancock
We do work globally, and we do work together. As the Prime Minister made clear yesterday, we have committed £744 million to the global response to coronavirus. We are significant funders of the WHO, and I am grateful for its work. We are also a significant funder of the Coalition for Epidemic Preparedness Innovations, which is leading the global search for a vaccine. In fact, we are making the largest contribution of any country in the world to the global search for a vaccine, and three of the top 10 vaccine candidates are being developed here in the UK.
Laura Trott (Sevenoaks) (Con)
The Secretary of State for Health and Social Care (Matt Hancock)
We are developing a new test, track and trace programme to help to control the spread of covid-19, and to be able to trace the virus better as it passes from person to person. This will bring together technology through an app, an extensive web of phone-based contract tracing and, of course, the testing needed to underpin all that. The roll-out has already started on the Isle of Wight, and I pay tribute to and thank the Islanders for the enthusiasm with which they have taken up the pilot. I hope that we learn a lot from the roll-out, so that we can take those learnings and roll the programme out across the whole country.
Laura Trott [V]
I thank the Secretary of State for his answer. I welcome the plans to introduce the contact-tracing app, but for it to be effective it will need to be rolled out to a large proportion of the population. What plans does the Secretary of State have to achieve that, and how will he alleviate privacy concerns?
Matt Hancock
I am grateful to my hon. Friend for that question. She is right to say that the more people who download the app, the more people will protect themselves, their families and their communities. The cross-party support for this test, track and trace programme is important, and right across this country people need to know that the app has privacy in its design. The data it holds is held on people’s phones and it does not go to the Government, until of course someone needs to get a test, in which case of course they have to get in contact with the NHS. So privacy is there by design, there is cross-party support and, according to a very early poll, 80% of people on the Isle of Wight want to download it. These are good early signs and we will have a big communications campaign to explain to people the benefits of the test, track and trace programme as we roll it out across the country.
Mr Speaker
In welcoming Dr Rosena Allin-Khan, may I say thank you for what you and all the staff do in the NHS, saving lives? It is appreciated.
Dr Rosena Allin-Khan (Tooting) (Lab)
Thank you very much, Mr Speaker. If I may, I would like to start by saying a huge thank you, on behalf of us all in the Chamber today and all those watching, to our NHS and care staff, who are working so hard on the frontline.
Frontline workers like me have had to watch families break into pieces as we deliver the very worst of news to them: that those they love most in this world have died. The testing strategy has been non-existent. Community testing was scrapped, mass testing was slow to roll out and testing figures are now being manipulated. Does the Secretary of State commit to a minimum of 100,000 tests each day going forward? Does he acknowledge that many frontline workers feel that the Government’s lack of testing has cost lives and is responsible for many families being unnecessarily torn apart in grief?
Matt Hancock
No, I do not. I welcome the hon. Lady to her post as part of the shadow Health team, and I think she might do well to take a leaf out of the shadow Secretary of State’s book on tone. I am afraid that what she said is not true; there has been a rapid acceleration in testing in the past few months in this country, including getting to 100,000 tests a day. We have been entirely transparent on the way that has been measured throughout, and I have confidence that the rate will continue to rise. Currently, capacity is 108,000 a day, and we are working to build that higher.
Of course, we have been working very hard to make the testing capacity grow as fast as possible, and as more tests are available, so we are able to make them available to more people and test people right across the NHS. I pay tribute, too, to the work of NHS and social care staff on the frontline; nothing should take away from the team spirit with which we approach this.
Jeremy Hunt (South West Surrey) (Con) [V]
Test, track and trace is possible only with a mass testing programme, so I offer many congratulations to the Health Secretary on achieving such a challenging expansion in our testing capacity. He has always said that he follows the science in the decisions he takes, but does he appreciate that, Zoom or no Zoom, it is very difficult for us as MPs to scrutinise such decisions if he does not also publish the advice of the Scientific Advisory Group for Emergencies that he receives at the same time as he makes those decisions?
Matt Hancock
We are making public the membership of SAGE and a lot of the science. I know that my right hon. Friend is also able to scrutinise the scientists before the Select Committee on Health and Social Care, as he and his team did again this morning. The overall approach of transparency, which has been a lodestar of the Government’s response to this crisis, is important. Of course, different scientists have different views, and they make those plain, but, as he said, we are guided by the science in the decisions that we take, and that has been an important part of the response.
Richard Drax (South Dorset) (Con)
The Minister for Health (Edward Argar) [V]
Public safety remains the Government’s top priority, and we have been clear that the NHS will get whatever funding it needs to respond to the coronavirus pandemic. As such, as a country, we have established a £14.5 billion coronavirus emergency response fund, with £6.6 billion going directly to the NHS. I know that my hon. and gallant Friend is a strong champion of community hospitals in his county. They are vital to our response to coronavirus and currently are managing well. I am not aware of any specific requests from his county; however, if additional urgent funding is required, we will of course consider that.
Richard Drax [V]
I am most grateful to the Minister for his answer. May I thank him and his team for the wonderful job they are doing? The main reason I asked the question is that beds at Portland Community Hospital had to move to Weymouth because of a shortage of trained staff. Can my hon. Friend assure my constituents that we will fill the thousands of nurse vacancies, thereby allowing community hospitals such as Portland to fulfil their proper function?
Edward Argar
Let me start by putting on the record my thanks to our amazing NHS and social care workforce at this time. As my hon. and gallant Friend is aware, the Government are committed to growing and supporting the NHS workforce to ensure that it continues to provide world-class health and care. We have set out our pledge that we will deliver 50,000 more nurses in our NHS by 2025 through multiple workstreams, including retention and recruitment. Many of those nurses will operate in community hospitals, enabling them to continue providing that world-class care and support.
Mr Ben Bradshaw (Exeter) (Lab)
The Minister for Health (Edward Argar) [V]
The UK has confirmed that we will participate in the current joint EU procurement scheme on therapeutics for covid-19 that is soon to launch. Owing to an initial communication problem, the UK did not receive an invitation in time to join the previous four EU joint procurements. However, participating in those four initial joint procurement schemes would not have allowed us to do anything that we have not already been able to do for ourselves. We will consider participating in all other future schemes on a case-by-case basis and on the basis of public health requirements and needs.
Mr Bradshaw [V]
Whatever mistakes were made or opportunities missed in the past, on the day that the UK has overtaken Italy as the country with the worst death toll in Europe, what reassurance can the Minister give the public that decisions taken now and in the future will be driven entirely by the public interest and not distorted by anti-European dogma?
Edward Argar
I gently say to the right hon. Gentleman that there is no suggestion of any decision having been influenced in the way that he suggests. Indeed, the permanent under-secretary at the Foreign Office made it clear in his clarification to the Foreign Affairs Committee that this was not a political decision. I reiterate that we are open to participating in future schemes on the basis of public health requirements and on a case-by-case basis.
Dr Philippa Whitford (Central Ayrshire) (SNP) [V]
Operation Cygnus in October 2016 showed that the UK would struggle in a pandemic due to a lack of both ventilators and personal protective equipment for staff. Why did the Secretary of State not act on it?
Edward Argar
The Government did act in looking at all previous modelling and all previous exercises. That is why the UK was well prepared. Let me take the example of ventilators, which she mentioned. The UK has massively increased the number of ventilators available to our NHS, meaning that at no point thus far in this pandemic has there been a shortage of ventilators. I reiterate, returning to the original question, that participating in those four initial joint procurement schemes with the EU would not have allowed us to do anything we have not already been able to do for ourselves.
Sir Edward Davey (Kingston and Surbiton) (LD)
Jacob Young (Redcar) (Con)
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
I would first like to place on record my thanks to everyone on the frontline, be they in a hospital or in social care, as well as those in less obvious places such as my community nurses, pharmacists and others who are working ceaselessly on the frontline. We are working round the clock to ensure that everyone across the NHS and care sector has the personal protective equipment that they need. To date, we have delivered more than 1.11 billion items of PPE. We are ensuring that PPE is delivered as quickly as possible to those on the frontline. We have delivered to over 58,000 health and care organisations, and we are working closely with industry, social care providers, the NHS, NHS Supply Chain and the Army to ensure that all our NHS and care staff can get the protection they need.
Sir Edward Davey [V]
I thank the Minister for that answer, but given how care homes have become a tragic focus in this pandemic, with so many staff and residents losing their lives, when will she be able to guarantee that every care home will have all the PPE they need? And why is the Clipper system, which is meant to supply PPE to the care sector, now one month late?
Jo Churchill
Every NHS and social care worker must have the protective equipment that they need. Clipper has been rolled out, and it is important that it is able to deliver the products that are ordered online. This is now being rolled out to more than 1,500 general practices and care home providers, and as it is piloted and stood up to more and more individual organisations, that will help that stream of work to ensure that people have the personal protective equipment they need. That is on top of the national supply disruption response—NSDR—line that people can ring in case of emergency, and this is also backed up by the wholesale distributors, where only last week 52 million more items were placed into that line as well.
Jacob Young [V]
Across Redcar and Cleveland, we have fantastic businesses such as Pendraken Miniatures and BC-FX, who have switched their manufacturing lines to making visors, the Materials Processing Institute, which has switched to making hundreds of bottles of hand sanitiser for Marie Curie nurses every week, and 15-year-old Daniel Sillett, who is using his 3D printer to make PPE for local care facilities such as Marske Hall. Will the Minister join me in commending those businesses and individuals as part of our national effort in overcoming this crisis?
Jo Churchill
I would indeed like to join my hon. Friend in congratulating them, and I congratulate him on the way he has just explained that this is the most enormous national effort, from large-scale businesses down to individuals such as Daniel, to whom we must give our special thanks. This national effort—the way in which individuals and businesses have stepped forward, and the many offers from all the different suppliers—has been extraordinary. We are working with industry partners across the piece to make PPE. We are working with Ineos and Diageo to produce hand and hygiene products and to ensure that we get these to the frontline, using services such as Clipper. Thanks to the work we have already seen, we have seen novel products arrive on the frontline. Seven companies have now been contracted in the UK to make over 25 million items of PPE and to send some 6 million square metres of fabric to NHS Supply Chain.
Jonathan Gullis [V]
Like my hon. Friend the Member for Redcar (Jacob Young) , I too have local initiatives—including Scrubs for Stoke and the Heywood Academy—that have produced amazing amounts of PPE for our local health care sector. Can the Minister inform us what steps she is taking to ensure that staff in care homes—[Inaudible.]—and to enable people to make optimal use of PPE and minimise the transfer of infection from one client to the next?
Jo Churchill
I would like to pay tribute to businesses in my hon. Friend’s area. I think the crux of his question was about making sure that people are receiving the appropriate infection control training in order to utilise PPE effectively. We publish guidance—including videos, which are easier to watch and immediately understand—on the appropriate PPE for health and careworkers, based on clinical expertise. The guidance has been written and reviewed by all four UK public health bodies and informed by NHS infection prevention and control experts. It is consistent with World Health Organisation—
Liz Kendall (Leicester West) (Lab) [V]
Thank you, Mr Speaker.
I have listened carefully to the Minister’s answers, but on the ground there are still serious problems. Maria, who is a careworker in the north-east, told me on Friday that she has only just received face masks and has to wear the same ones throughout the day. Kenzie in Leeds told me exactly the same thing: one mask, all day, even though one of the elderly ladies she cares for has coronavirus and cannot help coughing and spitting on her mask. With almost 8,000 deaths in care homes so far, what changes will the Minister make and what will she do differently to get a grip of this problem, which is still increasing, to help bring this terrible death rate down?
Jo Churchill
As I said, there are the three strands of guidance on making sure that the appropriate equipment is used in the appropriate place. We have also used the local resilience forums in order to ensure that individual care organisations can have a back-up of personal protective equipment so that people can use it in line with clinical guidance. I will contact the hon. Lady after this session, because I would like to ensure that the young lady she spoke about has seen that guidance, and the videos that accompany it, in order to make sure that she feels properly protected, which is the aim that we are all working for.
Alec Shelbrooke (Elmet and Rothwell) (Con)
The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
NHS England and NHS Improvement have published detailed guidance setting out the support for NHS dentistry during the pandemic. To minimise the spread of infection, routine dentistry is currently suspended. NHS practices are providing telephone advice and triage at urgent dental centres to patients with urgent needs. NHS dentists will receive their usual remuneration in full, or in part if they do part-NHS, part-private work. Dentists can also seek help via all the Treasury means for lost income.
Alec Shelbrooke [V]
My constituents in Elmet and Rothwell have reported difficulties in obtaining emergency dental care in Leeds. Will the Minister detail what actions her Department is taking when this specific issue comes up in, say, Leeds so that patients can access emergency care during the lockdown?
Jo Churchill
Of course. As of the week ending 30 April, there were two urgent dental care centres in the Leeds area to provide urgent dental treatment and care for patients on referral either from the patient’s own dentist or from NHS 111. As with all urgent dental care centres, there is also a triage service that will give people advice, antibiotics or painkillers and then refer them through if clinical work is required. There are 308 urgent dental centres open across the country. I regularly talk to the chief dental officer and to the British Dental Association about the needs and requirements in the profession so that we can care for patients in the best way.
Sarah Jones (Croydon Central) (Lab)
The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
It is vital that we find out what groups are most at risk so that we can help protect them. That is why we have asked Public Health England to conduct a rapid review of the different factors that might influence how someone is affected by the virus. Among other things, it will explore age, ethnicity and gender. As our deputy chief medical officer outlined yesterday, this is important but complex work.
Sarah Jones
I am sure the Minister would want to join me in paying tribute to the staff at Croydon University Hospital and those in our local community for the resilience, bravery and good grace they have shown during this crisis. Over 250 people have died in Croydon, and we are all thinking of their families and their loved ones who will be suffering so much. High levels of deaths in Croydon appear to be down to the underlying health of the population. Although of course it is early days in terms of analysing the data, it is clear that in Croydon covid has disproportionately affected people from black, Asian and minority ethnic backgrounds. Does the Minister agree that on early sight it looks like poorer people, often from BAME backgrounds, are being hardest hit by covid, and that we need to tackle the longer-term underlying health issues that have got us to this place of gross inequality?
Jo Churchill
It is so important that we do the research before we draw conclusions. Every death is a tragedy. Everybody who has died during this pandemic is somebody’s mum, dad, brother, sister and therefore we owe it to them to give Public Health England and all those researching this area all the support we can, so that we do not rush to conclusions, but draw conclusions that will truly help us to address the pandemic and those who are most affected by it in the right way.
Mr Speaker
I am sorry that we did not get more questions in, but maybe we can speed up the teams next time and we will get through more.
We come to the urgent question to the Secretary of State for Health and Social Care. I will follow the practice for substantive questions whereby I will call the Secretary of State to answer the question first. Before doing so, I have a short statement to make, which is relevant to this urgent question.
It has been widely reported that the Government will make a major announcement about the review of lockdown this Sunday. I consider this a matter of regret. It is important that the press is kept informed, but it is the duty of this House to hold the Government to account, not the media. Major Government announcements should be made first in the House and this is more important than ever during this time of crisis.
Covid-19 Update
(4 years, 6 months ago)
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Jonathan Ashworth (Leicester South) (Lab/Co-op)
(Urgent Question): To ask the Secretary of State for Health and Social Care if he will make a statement on the Government’s response to covid-19.
The Secretary of State for Health and Social Care (Matt Hancock)
We have flattened the curve of this epidemic, ensured that the NHS is not overwhelmed and expanded testing capacity to over 100,000 tests a day. As a Government, we are working resolutely to defeat the coronavirus, and there are two important areas where I want to update the House today.
First, on the expansion of our work to test, track and trace, we have now built a national testing infrastructure of scale, and because we have this extra capacity, we will be delivering up to 30,000 tests a day to residents and staff in elderly care homes, making sure that symptomatic and asymptomatic staff and residents can all be tested. Our care system represents the best of us, supporting our loved ones with tenderness and dedication at their time of greatest need. Through this unprecedented expansion of testing, we can give them the certainty and confidence that high-quality testing can provide.
Secondly, we are working to build the resilience of the NHS. We currently have 3,387 spare critical care beds in the NHS and that does not include the capacity provided by our Nightingale hospitals, including the 460-bed Sunderland Nightingale, which opened earlier today. We should all be very proud that we built up the NHS so fast and that our collective national effort has helped to protect the NHS and flatten the curve. As a result, we are now able to start to restore some NHS services and we are in a position to be able to place the London Nightingale on stand-by. This is good news, because our NHS has not been overwhelmed by this crisis and remains open to those who need care, and that means that this nation’s shared sacrifice is having an impact.
Throughout its time, this Chamber has borne witness to so much, and it has borne witness to the nation’s resolve once more. I am delighted that the British people are well and truly rising to this incredibly difficult challenge.
Jonathan Ashworth
Our thoughts, as always, are with the loved ones of those who have lost someone to this awful disease. May we again pay tribute to our brave NHS and care staff? I say to the Secretary of State that clapping and campaigns for medals are appreciated, but does he agree that NHS and care workers deserve fair pay, mental health support and access to personal protective equipment? I am hearing reports that we may have problems with the stocks of sterile gowns. Could he update the House on that front or write to me if he is not able to do so today? We also rely on international staff, as he knows. Will he scrap the health surcharge that they have to pay? It seems particularly unfair at the best of times, but especially at this time.
We are tracking towards having one of the worst death rates in the world—we have seen the figures again today. I know that the Secretary of State said that we are through the peak, but can the same be said of the care sector, given the number of deaths we have seen reported today in the care sector? He knows that we support lockdown and it is right that we engage in a debate about it. The strategic aim must be to suppress this virus, not simply to flatten its spread, in order to save lives and minimise harm. Testing, tracing and isolation is crucial.
Does he agree that we should be mobilising our expertise in local authority public health services, as well as other specialists such as environmental health officers, and our expertise in primary care? Would that not be a better route than outsourcing the call centre work to firms such as Serco? We support digital tools, but he will understand that there are questions about privacy. Will he undertake to publish a data protection impact assessment?
As we heard in Question Time, deprived areas have experienced covid mortality rates that are more than double those in less deprived areas. There are disproportionate mortality rates among black, Asian and minority ethnic communities. Does that not show that covid thrives on inequalities and that we need a funded strategy to support low-paid, deprived and marginalised communities, including by enforcing protections in the workplace when we transition out of this lockdown?
Can the Secretary of State comment on the remarks that were made in a Select Committee earlier by the chief scientific adviser, who said that we imported many cases from Italy and Spain early on in March? That was when events such as Liverpool v. Atletico Madrid were still going ahead. What advice will he be taking about testing at ports of entry and quarantine when we transition out of the lockdown?
Finally, we are building up a huge a backlog of unmet non-covid clinical need in the NHS. What resources will be available to deal with that, and how will we get the waiting list down? We do not want the lockdown to result in excess mortality and morbidity among those with non-covid conditions.
Matt Hancock
I am grateful to the shadow Secretary of State for his questions, and he is quite right to raise them. I will go through them as fast as I can and respond to them in turn. First, gown supply is improving and we have a better distribution system for PPE, on which we have been working incredibly hard under the leadership of Lord Paul Deighton. He has come in to help on PPE and made a significant improvement already.
The shadow Secretary of State asked about the number of deaths in the care sector. It is incredibly important that we protect those who live in social care settings and those who receive social care in their own homes. I am glad that in the data released by the Office for National Statistics this morning, the number of deaths in care homes was slightly lower, but it is still far too high and there is a huge amount of work still to do.
The shadow Secretary of State rightly asks about making sure that we suppress the virus. That is the goal—not just to flatten the peak, but to get the numbers right down. In doing so, our local authority public and environmental health teams will be absolutely vital, and he is right to draw attention to them. In this Chamber, we often rightly praise the NHS and social care staff, but I think this is a good moment for us to come together to praise our public health officials and environmental health officials in local authorities.
Finally, the shadow Secretary of State asked about non-covid needs, which are incredibly important. People who need treatment should get that treatment. We are opening up and reopening the NHS, and that includes any temporary closures, for instance of A&Es that need to reopen. I can think of one example in Chorley, Mr Speaker, which we are working hard to reopen as soon as possible, as the NHS reopens. I am happy to put that on record. It sometimes seems slightly unfair that you, as Speaker, cannot ask open constituency questions, but I know that that is something you have worked incredibly hard on, along with your colleagues in Lancashire.
Finally, I want to reiterate the point about levelling up. The Government’s agenda of levelling up is unabated; in fact, it is strengthened by this crisis. There are many reasons for the disparate impacts of coronavirus on different groups. Public Health England work is urgently under way into, for instance, the impact on ethnic minority groups, the impact of obesity and deprivation, and the much greater impact of coronavirus on men than women. All those things need to be considered and looked into, and we need to level up our country once this crisis is over.
Mr Speaker
I welcome the comments from the Secretary of State. We now go over to Sir Peter Bottomley.
Sir Peter Bottomley (Worthing West) (Con) [V]
I ask if we can all recognise the loving care by social services staff and NHS staff, especially those who have to go on hot or cold visits to people’s homes—not only the community nurses, dementia nurses and those who go to people with special needs, but the GPs and paramedics. Will the Secretary of State consider safer ways for those home visits, possibly using some of the offers of London black cabs, which can have a division between the driver and the clinician and also are much easier to clean down when necessary?
Matt Hancock
Yes, I am happy to look into all different ways of having safe working practices within the NHS and more broadly. Within the NHS, infection control is a critical piece of work. My hon. Friend is right to raise the point that this is a matter not just for acute hospitals—where, of course, it is mission critical—but for all parts of the NHS, including pharmacies, which increasingly have screens to make sure that there is a lower impact of transmission from customers to staff.
Dr Philippa Whitford (Central Ayrshire) (SNP) [V]
At least 140 health and care staff in the UK have lost their lives to covid-19, and we should pay tribute to them, but analysis of more than 100 of those tragic deaths has highlighted that there were not any among staff in critical care units, which are the most dangerous setting. Does the Secretary of State recognise that that shows the effectiveness of full PPE? He claims to always follow scientific advice, but NERVTAG, the new and emerging respiratory virus threats advisory group, advised him last June to add gowns to the stockpile, so why did he not do that? Why did Public Health England produce PPE guidelines for the whole UK that did not recommend gowns for staff looking after covid patients?
Matt Hancock
We are absolutely guided by the science. It is a very important principle of our overall response, and hence we upgraded the PPE guidelines a few weeks ago to include the use of gowns. The guidance is always looked into as we learn more and more about the virus. The plans that we had were not plans for a particular virus, but for the threat of a pandemic. We have learned more and more about this virus, which is novel and only came into being December last year, hence, as the science changes, so the scientific advice to Ministers is updated, and Ministers update decisions.
Miriam Cates (Penistone and Stocksbridge) (Con) [V]
At the start of this pandemic, with no effective drug treatment, the only way to save the lives of coronavirus patients has been to ensure that hospital treatment is available for all who need it, so I thank my right hon. Friend for overseeing such a massive increase in critical care bed capacity. We saw yesterday that the NHS Nightingale in London is not due to take any more patients. While some have oddly criticised that announcement, does my right hon. Friend agree that that should be viewed as nothing other than a success that shows how effective we have been in protecting our NHS?
Matt Hancock
Yes, I am incredibly proud of the work that was done to put in place the Nightingale hospitals across the country. Most of them were put in place in under two weeks. The London Nightingale, which was open first, is the prime example of the whole team—the NHS, the private sector and the armed forces—all pulling together. It was a great accomplishment, but a greater accomplishment still is that it was never full and that this country has managed to flatten the curve. Now we are able to put it on standby, meaning that it will be physically there in case there is a second spike, but as an insurance policy, rather than as an active hospital. That is a very, very positive step that should be welcomed by all. I tend not to take much notice of some of the noises off, which sometimes criticise me for not having full enough hospitals and sometimes criticise me for not having enough people wanting test capacity. Frankly, we will get the capacity up and then hope we do not use it. That is the attitude we should take to the extra hospitals, and I pay tribute to everybody involved in the project.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]
[Inaudible.]
Stuart Anderson (Wolverhampton South West) (Con) [V]
We all know the importance of PPE during the outbreak, how difficult it is to get and the great lengths to which the Secretary of State is going to procure it. On weekly calls with New Cross Hospital and the City of Wolverhampton Council, the same point is at the fore- front of our discussions: the consistency of the PPE deliveries. Will my right hon. Friend set out what plans are in place to ensure that what is promised arrives?
Matt Hancock
My hon. Friend is right to ask that important question. Getting the distribution of PPE to the frontline is critical. It has been a huge operation; the head of the Army has called it the largest logistical operation that this country has seen in 40 years. It is challenging because there is a global shortage of supply. We are working to get that supply as effective as possible. It is undoubtedly improving, but there is an awful lot of work still to do.
Having the national shortage call centre—the phone line that anybody can call if a shortage is coming up—is an important part of the response. So, too, are the automated online deliveries for the smaller settings. But we continue day and night to try to do everything we can to improve the flow of PPE to the frontline.
Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]
Disabled people are worried about who is expected to provide PPE for personal carers. Many are finding it difficult to procure appropriate equipment—and when they can, they are finding that prices are inflated. What are the Government doing to ensure that disabled people are not left without adequate equipment, or out of pocket, when attempting to protect themselves and their carers?
Matt Hancock
The hon. Lady is right that making sure that our whole social care system gets access to PPE is important. There is often a focus on PPE in hospitals and care homes, but on home visits, as she rightly raises, access to PPE is also vital.
There has been a global increase in the prices of PPE. The prices that the Government pay for PPE have increased a number of times over the course of this crisis. That is a feature of the global shortage of supply as the demand for PPE across the world has shot up. We are seeing that the world over. What I hope to do is bring on stream more and more domestic manufacturers of PPE, both to ensure that we get the quantity and to see whether we can stop the price rises happening.
David Johnston (Wantage) (Con) [V]
Elderly constituents of mine in Wantage and Didcot have been concerned by media reports suggesting that they will be forced to stay in their homes for an extended period. Can my right hon. Friend confirm that that is in fact not the case and that, through all his work on testing and the tracking and tracing app, he is working to make sure that we can all return to a normal life as soon as possible?
Matt Hancock
I am grateful to my hon. Friend for his question. I would like to take this opportunity to set out the exact policy, which a few media outlets have got wrong in the past few days. We set out from the start, and clearly on the nhs.uk website, that broadly there are three groups of people when it comes to the strictures of the social distancing guidelines. There are people of working age who do not have underlying health conditions, who must follow the social distancing rules. There are those in groups that are, according to the science, more susceptible to this disease, including the over-70s and some with underlying health conditions, who we say are clinically vulnerable and must pay particular attention to the social distancing rules.
Then there is the group who are shielded. These are people with specific underlying health conditions who will have received a letter from the NHS. It is only to this last group that we have said, right from the start of social distancing, that they will need to stay away from people as much as is practically possible for 12 weeks. We know that that is a very significant impact and burden, hence we have written individually to those people; in many cases, they will have specific requirements because of their condition.
It is really important that people understand those three separate groups. I hope that that clears up for the House some of the confusion seen on the front pages of some of the newspapers.
Ruth Cadbury (Brentford and Isleworth) (Lab) [V]
The Sunday Times this week had an extremely moving piece by photographer Stuart Franklin, featuring NHS workers and patients fighting the coronavirus at West Middlesex hospital, which is based in my constituency. The article demonstrated very clearly the emotional impact of the virus on frontline health and care staff as well as patients and their families, and we all know that post-traumatic stress syndrome will be a growing issue for many throughout and after this, so will the Government invest in both immediate and long-term mental health treatment for all those affected, and will they take into account that many, particularly health and care workers, are often reluctant to seek help?
Matt Hancock
Yes. The hon. Lady makes an incredibly important point, and I agree with every word of the question. We are already investing in more support for the mental health of frontline workers, making sure that resources are available to all. Of course, at the moment there are other challenges to delivering that because of social distancing, but I commit to continuing and strengthening that over the long term. It is something that I have thought important throughout my time as Health Secretary; I pushed this agenda even before coronavirus, and now it is even more important, and I look forward to working with the hon. Lady on it.
Dean Russell (Watford) (Con) [V]
Across Watford, as a volunteer, I have seen first-hand the many inspirational frontline workers, ranging from pharmacists to hospital volunteers to GP receptionists to cleaners. Can the Secretary of State confirm that everyone—everyone—on the frontline will have the full support of the Government, so that nobody who works on the frontline is missed out as we continue our incredibly important fight against coronavirus?
Matt Hancock
Yes, it is a big team effort and all play their part. People have different roles, of course, and people on the frontline have been incredibly flexible in the roles that they play, but all play a critical part and all deserve our support.
Munira Wilson (Twickenham) (LD) [V]
In order to test, trace and isolate, to keep people safe and save lives, testing must work properly and be widely and locally available, so I was astonished to hear that yesterday people in my constituency were being sent as far afield as Brighton when we have a testing site right here at the Rugby Football Union in Twickenham. Other key workers tested last week at Twickenham have had their tests lost and no one in the NHS can find them, and we are also hearing reports that people sent home testing kits have no return address to send their completed tests to, yet those tests are being counted. Will the Secretary of State please confirm how people are being prioritised for testing at their local sites, how many tests have been lost—both at drive-through sites and among those sent to people’s homes—and when he thinks we will be doing enough testing to actually move to test, trace and isolate to keep people safe, as so many other countries have been successfully doing for several weeks now?
Matt Hancock
We now have one of the largest testing capabilities in the world; we are testing more people per day than Germany, and the whole country should be reassured by that fact. Of course there are individual examples of where the logistics go wrong; that is natural in any very large system. I would be very interested if the hon. Lady could send me the details of those specifics, and then we will look into them. But what I would say is that the availability of testing across the board is now huge. It is big enough to start the test, trace and track programme. We are piloting that, as the hon. Lady knows, in the Isle of Wight from today and then we will roll it out across the country.
Dr Luke Evans (Bosworth) (Con) [V]
In an earlier answer, the Secretary of State kindly went through the definitions of all the different vulnerable groups. Definitions are really important, especially as we start to consider releasing the lockdown. When that point comes, will he be crystal clear about exactly who is entitled to do what and when and ensure that everyone in the public knows that?
Caroline Lucas (Brighton, Pavilion) (Green) [V]
Can the Secretary of State confirm that directors of public health and environmental health officers will not just be consulted but will be leading the delivery of community tracking and tracing efforts, given that that is what they have been trained to do? Can he reassure us that the Government will not repeat the mistakes they have made with drive-through testing centres and PPE supplies by outsourcing those critical tasks to private companies such as Serco, Sodexo and Deloitte, which, frankly, have proved that they are not up to the job?
Matt Hancock
I agree with the hon. Lady on the first part of her question, but she is completely wrong on the second part. In the first part, she asked whether local public health officers and environmental health officers will be a critical part of test, track and trace, and the answer is yes, they will be vital. On the second part, she is completely wrong. There is no way that we could have delivered the testing programme without the unbelievable support, help and effort of private partners in the diagnostics industry and in delivery—companies such as Deloitte and Boots, which delivered that amazing expansion of the drive-through centres in such a short period. I pay tribute, hand on heart, to the work of every single person in that programme, whether they work in the private sector or the public sector—whether they work in the NHS, in the Department, for Boots or for Deloitte. Frankly, to try to divide people in that way suggests that she has missed the tone of where the country is right now.
Felicity Buchan (Kensington) (Con)
In order to get London back to work, we need safer public transport. Does my right hon. Friend agree that the Mayor of London needs to provide more tube trains, to provide a safer service for Londoners?
Matt Hancock
Yes, I do, because the more people are spaced out on public transport in terms of the distance between them, the safer that public transport will be. I hope that the Mayor of London is working extremely hard to have as full a service as possible, so that as few people as possible can be on each individual service.
Ben Lake (Ceredigion) (PC) [V]
Widespread testing and contact tracing will be essential to contain future outbreaks, and such a system will need to be operational before we move from full lockdown. In addition to the Isle of Wight trial, will the Secretary of State consider the work being undertaken by Ceredigion County Council, in collaboration with Hywel Dda University Health Board and Aberystwyth University, on a community testing and contact tracing system that could offer local solutions and expertise to complement any UK-wide infrastructure?
Matt Hancock
I am happy to look at any examples that are effective in reducing the spread of the virus. Of course, parts of this are devolved, and parts of it are the UK Government’s responsibility. We have made available all the tools that we are developing at a UK level for devolved Governments to pick up. For instance, we have published the underlying source code behind the apps, so that people can have a look at it and suggest improvements or take it and use it in their own way.
Nigel Mills (Amber Valley) (Con) [V]
Many of my constituents with cancer understood when their treatment was deferred. They are now keen to resume it but nervous about going to hospital, in case they catch coronavirus. Can my right hon. Friend assure them that their treatments will resume and that it is safe for them to go to hospital?
Matt Hancock
Yes. I want cancer treatments to resume as soon as is safely possible. In some cases, it is clinically not advised to resume treatment because there is a spread of the virus in the community—for instance, treatments that reduce immunity to very low levels. There are other areas—for instance, some surgery—where we are able to restart. This is a very important part of the restart of the NHS. The message I would give to my hon. Friend’s constituents is: if you are advised by your doctor to go to hospital, you should go to hospital, because they will have taken into account all the different risks and decided that that is the best advice to give. So if you are asked to go to hospital by your clinician, please do go.
Catherine McKinnell (Newcastle upon Tyne North) (Lab) [V]
The Government chief scientific adviser said that if we could keep deaths below 20,000, we would have done well in this epidemic, yet the death toll now stands at a devastating 32,313. It is not about whether we can use international comparisons; this is the Government’s own measure, so many are wondering how the Government can claim that their approach so far is a success. Is that not an insult to every family member who has lost a loved one, and does it not undermine public confidence that the Government are learning from their mistakes?
Matt Hancock
We are absolutely learning from everything that has happened, and constantly looking again, trying to make sure from the time we get up in the morning to the time we go to bed at night that we have the best possible response. That includes, for example, working across parties where cross-party work can help, as we have on the test, track and trace pilot on the Isle of Wight. That is the approach that we constantly take. Of course we look at all the information and the data, but in that spirit the hon. Lady should acknowledge, I think, that the approach is a success: the curve is flattened and is now coming down, and—critically—the NHS was at no point overwhelmed. That was one of our priority goals right at the start, and it has been achieved at every point so far in this crisis. Of course there are always things we can improve, but I think we should also, rightly, study the things that have gone well.
Jack Brereton (Stoke-on-Trent South) (Con) [V]
Will my right hon. Friend confirm that, thanks to the magnificent response of the British people, including those in Stoke-on-Trent, we have prevented our NHS from being overwhelmed at any point during this crisis, so that it has been able to offer world-leading care to every single person who has needed it since the very first case?
Matt Hancock
Yes. This comes off the back of the previous question. Not more than a few weeks ago, many people were saying that we would not be able to get through this crisis without the NHS being overtopped and not having enough capacity to deal with the number of cases. Through a combination of the expansion of the NHS that we have overseen and the public doing their bit by following the social distancing rules, we have managed to avoid that outcome. Instead, at every point in the crisis, the NHS has been there to provide the care that is needed as much as it possibly can, as well as it possibly can, and it has not been overwhelmed. That is something that this country can always look back on.
Chris Bryant (Rhondda) (Lab) [V]
My inbox has been packed for days with questions from over-70-year-olds saying that they simply do not understand what the Government advice is. Is it that none of them should ever, whatever their medical circumstances and however healthy they are, leave the house for 12 weeks? When did the 12 weeks begin and when will the 12 weeks end, or is there going to be another 12 weeks? Further to that, I asked the Secretary of State on 3 February whether face masks worked, and at that time he was very sceptical about them. In the future, will he be advising people that we should all be wearing face masks on public transport, and if so, where are we going to get them?
Matt Hancock
I reiterate the point I made in response to earlier questions. I hope that in his response to all his constituents, the hon. Gentleman will send a link to the NHS website, where the answer to his question was set out extremely clearly right from the start. It is very clear that there are three groups of people. Those who have received a letter from the NHS saying that they must shield for 12 weeks are in that category; those who have not are not. I know that some media reports have stated otherwise, but I implore people to follow the guidance clearly set out on the NHS website, which the hon. Gentleman and any other Member who has questions about that should send to their constituents to inform them. It is a matter of our public duty. It is not a matter of political debate.
Joy Morrissey (Beaconsfield) (Con) [V]
What provision has my right hon. Friend made for the visually impaired during covid-19?
Matt Hancock
Getting new Government guidance to the visually impaired is of course a challenge. It is something we have been working hard on. In the first instance, the first port of call should be primary care—somebody’s GP or 111—if there are any queries. That is where I would point people in the first instance. It has been a challenge, because we have been making policy at speed, and writing and updating guidance at speed, but I would point those who are visually impaired to 111 and their GP if they have any questions.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
The Trace Together app in Singapore has been down- loaded by 17% of its population since it was introduced in March. What estimate has the Secretary of State made of the numbers that will be required to download NHS app, and have there been discussions about making it compulsory if not enough people do so?
Matt Hancock
The more people who download the app the better it will be and the more effective it will be in keeping people safe. However, even small numbers downloading it will help us to spot hotspots and so will bring some value. I was really delighted yesterday afternoon to hear from Isle of Wight Radio, which stated that 80% of people on the Isle of Wight in an early survey said that they wanted to download the app. That would be a terrific result. I pay tribute to the work of Isle of Wight Radio and the local press on the Isle of Wight, who have taken to Isle of Wight’s important role in piloting this roll-out with enthusiasm. There is no numerical answer to the hon. Gentleman’s question. The answer is that as many as possible will make us as safe as possible.
Laura Farris (Newbury) (Con) [V]
I welcome the launch of the test, track and trace app, but one of the apparent challenges is that those who could benefit from it the most, namely the elderly, may be those who are least likely to be able to access it because they do not have a smart phone. What assessment has my right hon. Friend made of the probable lower take-up by that honourable cohort?
Matt Hancock
We have looked into this very important question. Of course, test, track and trace is a system. The app is one part of it, but the human contact traces are an important part of the system, as is the advice we give to people to contact their own significant contacts themselves. The whole system has been designed knowing that a proportion of the population does not have a smart phone. There are many older people who do have smart phones. I am sure, for instance, that the shadow Secretary of State is probably sending a message to his parents right now on the smart phone he is using instead of listening to my hon. Friend’s question. There is a serious point, which is that of course we have had to take that into account. It is another reason why the Isle of Wight is such a good place to trial it, because there are elderly residents on the Isle of Wight. We will work out and learn a lot from how effective that trial is.
Abena Oppong-Asare (Erith and Thamesmead) (Lab) [V]
It has become apparent that people from black, Asian and minority ethnic backgrounds are being disproportionately affected by covid-19. People in Erith and Thamesmead have also raised concerns about the disproportionate effects of covid-19 on disabled people, people from low social economic backgrounds, women and children. Does the Secretary of State have plans to publish a report on the effects of covid-19 on people who fall under one or more protected characteristics?
Matt Hancock
Yes, we have today launched a piece of work by Public Health England to look into the disparities in the impact of covid-19. However, I will just pick the hon. Lady up on a couple of points from her question. The evidence shows quite clearly that the impact of covid-19 is lesser on children and lesser on women than it is on men. There is also growing evidence that obesity has a big impact. We have to look into all those considerations. We will listen to the scientists and the medics, and learn whatever lessons we can.
Mrs Heather Wheeler (South Derbyshire) (Con) [V]
I thank my right hon. Friend for his answers and congratulate him and all the hardworking staff in the NHS and carers on looking after us. Will he support my campaign to have a memorial placed at the National Arboretum at the heart of the country as a fitting way to commemorate the sad loss of essential workers to covid-19?
Matt Hancock
Yes, I would be very happy to discuss that suggestion with my hon. Friend. It is important that, as a nation, we remember and commemorate the sacrifice of those who have lost their lives while serving on the frontline of this war; it is a war in which we are all on the same side, and we should commemorate those who have given their lives in it.
Kirsty Blackman (Aberdeen North) (SNP) [V]
The seven-day average number of new cases in the UK has now levelled out at 4,500, but it is not yet decreasing significantly. Can the Health Secretary tell us what the number of new daily cases must fall to before he believes that test, track and trace can prevent another peak if restrictions are eased?
Matt Hancock
One of the five tests that we have set out before the restrictions are eased is that the number of deaths should be falling consistently. Indeed, the Scottish Government’s document includes a similar proposal, and we are working to ensure that the UK is as aligned as possible.
Sir Christopher Chope (Christchurch) (Con) [V]
Does the Secretary of State agree with you, Mr Speaker, that changes to lockdown should be announced to Parliament first? He said earlier that transparency is the lodestar of Government policy. If that is correct, will he now release the findings of Exercise Cygnus and prove that that was not just a gesture, but is actually the real policy of the Government?
Matt Hancock
Exercise Cygnus was undertaken under my predecessor, and there are specific rules in Government around decisions over papers that were produced before one’s time. I will take away that point.
Claire Coutinho (East Surrey) (Con) [V]
There is some evidence that under-10s are at much lower risk of getting and transmitting the virus. If true, this would be a huge comfort, both to teachers and working parents. What evidence has the Secretary of State seen to that effect, and what work is being done to further explore this?
Matt Hancock
There is strong evidence that the under-10s are less likely to have symptoms of coronavirus, but unfortunately the evidence on the under-10s’ transmission of coronavirus is mixed and there is not a conclusive scientific base on that yet.
Steve McCabe (Birmingham, Selly Oak) (Lab) [V]
Is the Secretary of State content that the advice and guidance given to pregnant women working on the front- line of health and social care, on both safety and income, are sufficiently clear and consistent?
Mr Steve Baker (Wycombe) (Con) [V]
I congratulate my right hon. Friend on the fruits of his tireless work, along with officials and others in the Government, including delivering mobile testing in Wycombe, but could he please tell us a little bit more about what he is doing to restore the full range and scale of elective surgery in the NHS, so that people with non-covid conditions can get their treatment back on track?
Matt Hancock
That is a really important point. It is critical, because the overall impact of coronavirus is not just the direct morbidity—the number of people who sadly die from coronavirus itself; there is also the wider impact, including those whose treatment has been delayed owing to the necessity of ensuring that the NHS was ready to cope with coronavirus, or because, for clinical reasons, it was important to delay the treatment because there is such a virulent virus at large. We are working very hard to restore treatments for non-covid reasons. That work has started. I was able to announce last week, for instance, that fertility treatment has restarted and cancer treatment is restarting, and other elective surgeries will restart as soon as it is safe to do so.
Mr Alistair Carmichael (Orkney and Shetland) (LD) [V]
I am in Orkney, where I have been receiving reports from category 2 key workers who have self-referred for a covid test through the gov.uk website and been directed to testing centres in Thurso, Elgin or even Peterhead, all of which would require a journey by ferry or plane. There is local provision and the option of postal testing, so will we get the website sorted, to allow people to get the information they need, rather than be left thinking that in order to get a test they first need to get a plane or a ferry?
Matt Hancock
I am glad that we sorted the broad- band to Orkney, so that we could take the question. It is an important question and I will look into the specifics of it to make sure that our island communities get the appropriate response on the website. The right hon. Gentleman will appreciate that we put the testing website together at remarkable pace and so in the first iteration we were not able to address this sort of important nuance for Orkney and other island communities, but I will take that away and look at it. He mentioned the answer in substance—to get the home testing kits working for Orkney—and I am sure that there is a way through.
Angela Richardson (Guildford) (Con) [V]
The Royal Surrey County Hospital in Guildford, under excellent leadership and in partnership with our community, has proved to be resourceful and innovative, ensuring best practice on patient care, safety for staff and the ability to continue treatment for patients presenting with non-covid-19 needs—feedback from those patients has been very positive. Will my right hon. Friend join me in paying tribute to our NHS leaders and once again encourage those who need hospital appointments and urgent care to attend? Finally, will he give assurances that hospitals such as my local one, which are world-leading in cancer treatment, will be given the investment they need to ramp up diagnostics going forward?
Matt Hancock
Yes, absolutely. I think we have all learned the importance of diagnostics during this crisis, if we did not know it already. I pay tribute to the Royal Surrey County Hospital, its leadership and the staff there, who have done such a magnificent job, including treating friends of mine for coronavirus. If anybody in Surrey gets a message from their doctor saying that they need to go to hospital, they must go. That is important right across the country—in Guildford and beyond.
Bill Esterson (Sefton Central) (Lab) [V]
We still need to increase significantly the number of people being tested so that we can tackle the crisis. Companies such as Curative are supplying tens of thousands of saliva-only tests to the US military, but have faced road blocks in trying to supply in the UK. What is the Secretary of State going to do differently to improve the procurement of tests, so that companies that want to help can do so?
Matt Hancock
We are working with many, many companies on the expansion of testing, including new technologies. We have to be confident that the technologies are effective and work, because a test that gives a wrong result, and has too high a proportion of wrong results, can be worse than not having a test at all. I am not saying that that is the case in the specific individual example the hon. Gentleman gives—we are working with many companies on how the next generation of tests can be brought to bear—but it is important that we get this right as we ramp up testing. There is clearly a pressure to increase testing. Lyndon Johnson once said, “Politics is about ‘What have you done for me recently?’” It was only last Thursday that we hit the 100,000 target. I do not mind being urged to do yet more, but we have to do it using the right tests, in the right way.
Sir Desmond Swayne (New Forest West) (Con) [V]
What prospect is there of moving to robust, multi-use personal protection equipment that can stand being decontaminated many times?
Matt Hancock
My right hon. Friend, who probably has the most spectacular backdrop to any questioner in this session, is right to raise that issue. It is happening: the right personal protection equipment that can safely be decontaminated and reused is being decontaminated and reused. That is an important part of the solution to the challenge of getting the right PPE to the right people, right across the board. It does not work in all instances and first and foremost it has to be safe, but it is a part of the solution and my right hon. Friend is right to raise it.
Afzal Khan (Manchester, Gorton) (Lab) [V]
The British Medical Association, the Faculty of Public Health and the Royal College of Physicians have all advised the Government to suspend the fees for migrants accessing the NHS during the coronavirus pandemic, to ensure universal access to healthcare. We know that the charging regulations disproportionately affect black and minority ethnic people; given the impact of covid-19 on the wider BME community, will the Secretary of State now suspend the charging regulations?
Matt Hancock
The regulations are important because it is important that people make a fair contribution. The question has been raised in relation to staff in the NHS, and in many cases in that respect the NHS trusts themselves pay the extra, which is a contribution towards the running of the NHS. That is the approach we are taking.
Theresa Villiers (Chipping Barnet) (Con) [V]
The Secretary of State is aware of my concerns about the discharge from hospital into care homes of patients with covid symptoms. Can he reassure the House that there will not be such discharges—that covid-positive patients will not be discharged into covid-free care homes because of the risks that they might spread the infection to other residents?
Matt Hancock
My right hon. Friend and I have been in discussions about this important issue. We have strengthened the rules on discharges to ensure that anybody being discharged from hospital into a care home gets tested and is then isolated ahead of the result of that test. If the test is negative, they can of course go into the home in the normal way; if the test is positive, that isolation must continue until they are through the virus and safe to go into the care home without taking coronavirus into the care home. I am glad to see in the latest numbers that the number of those who are dying from coronavirus in care homes is just starting to fall, but there is an awful lot more that we still need to do.
Kirsten Oswald (East Renfrewshire) (SNP) [V]
The Secretary of State said earlier that the tracing app would have privacy by design. It will be critical that there is a high degree of public confidence in the app if it is to work as he intends as part of efforts to trace the virus. What data protection will be put into place to ensure that the public are confident that this tool will be secure and that data cannot be misused?
Matt Hancock
The public can have confidence, not least because the data will be held on people’s own phone until they need to contact the NHS when, naturally, they will of course need to tell the NHS their identity in order to be tested. In that sense, privacy is there by design.
The wider point is that the app and the test, track and trace system will help to keep people safe. As I said yesterday when I launched the pilot in the Isle of Wight, people should download the app to protect the NHS and save lives. It is the civic duty of people on the Isle of Wight to do so, and it will be the civic duty of people throughout the country to do so. It has been designed with privacy at its heart. We are putting the source code on the internet so that people can see exactly what the app does. That reassurance, along with the motivation that they are helping to protect themselves and their community, will, I hope, lead to an awful lot of people downloading the app. I certainly will.
Mr Peter Bone (Wellingborough) (Con) [V]
Mr Speaker, further to your opening remarks at the beginning of this urgent question about new policy being announced by Government in the House and not to the media first, the Secretary of State side-stepped the question when it was put to him by my hon. Friend the Member for Christchurch (Sir Christopher Chope), so I will try again. Does my right hon. Friend agree with Mr Speaker that statements of new Government policy should be made in this House first, and will he advise the Government to put off making the statement on Sunday until Monday and make a statement in the House?
Matt Hancock
The exact scheduling of any announcement is, of course, a matter that has to be considered across Government, but I will take away my hon. Friend’s concerns and ensure that they are looked into.
Stephen Farry (North Down) (Alliance) [V]
In better times, tens of thousands of people cross the land border in Ireland every day and, more generally, the UK and Ireland are committed to the common travel area. With regard to contact tracing apps, does the Secretary of State recognise the difficulties that will arise if the UK, including Northern Ireland, and Ireland use different systems, and will he undertake to work with the Irish Government to address any such operational issues?
Matt Hancock
We have considered all the different potential apps being used by different countries around the world. I am confident that any such concerns about international travel can easily be addressed, not least by the potential of someone having two different apps on their phone if they need to travel internationally.
Dr Julian Lewis (New Forest East) (Con) [V]
My right hon. Friend has proved himself to be a brilliant multi-tasker, so will he kindly turn some of his attention to a firm in my constituency that has access to a network of manufacturers in southern China that believes it can supply a million items of gowns, visors, masks and other PPE equipment per week if only someone from Government would get in touch? I am very happy to text him the details directly, but I have been trying for three weeks and still Government have not got in touch with this firm.
Matt Hancock
Yes, of course; if I get the details, I am very happy to do that. I would also be very happy to know where my right hon. Friend had his hair cut, because it is extraordinary. No one else has such smart hair. Everyone is looking increasingly bushy.
Alex Sobel (Leeds North West) (Lab/Co-op) [V]
Dozens of dentists have got in touch with me, saying that the measures put in place are not protecting them and their practices. They take on a combination of private and NHS patients. Many are fearing bankruptcy and, ultimately, closure. This will leave NHS dentistry in an existential crisis. What steps is the Secretary of State taking to ensure that NHS dentistry survives the current crisis?
Matt Hancock
This is an incredibly important question. My hon. Friend the Under-Secretary of State for Health and Social Care, the hon. Member for Bury St Edmunds (Jo Churchill), who is responsible for dentistry, is working very hard with the British Dental Association and others to make sure that dentists get the support that they need.
Mrs Maria Miller (Basingstoke) (Con) [V]
Further to that question on dentistry, I have spoken to local dentists in my area and a number feel that they have the correct PPE and working conditions to be able to provide the sort of emergency dental care that many of their patients need. Can my right hon. Friend outline how we can move forward with dental practices in the same way as he has worked so hard in moving forward with the work that hospitals are able to do now, for which I would like to reiterate my thanks?
Matt Hancock
This is a really important point. I will write to my right hon. Friend with the proposed plans for reopening dentistry. Obviously, that has to be done in a safe way, and PPE is one important consideration. Dentistry by its nature requires close contact, and it can be an aerosol-generating procedure in certain circumstances, which makes it a higher risk to the dental practitioner—the dentist or nurse—and, in turn, to future patients, so we have to get this right. Emergency dentistry is available in dentistry hubs, which have been set up during the crisis. It is important to get this right, but it is also important to get dentistry back on its feet.
Alyn Smith (Stirling) (SNP) [V]
Thank you, Mr Speaker, and well done getting so far through the call list.
Progress notwithstanding, we are very much not out of the woods yet. Worryingly, the head of the European Centre for Disease Prevention and Control has confirmed that the UK is among five European countries not making substantial progress on cutting the overall rate of infections. Is the Secretary of State concerned by that analysis? Can he reassure the House that we will take account of the European centre’s data in any calculation about resuming normal activities and easing lockdown?
Matt Hancock
I have not seen the particular report that the hon. Gentleman refers to, but we take into account all data and considerations in making the decisions that we do.
Jason McCartney (Colne Valley) (Con) [V]
I have a local care home that, thankfully, is free from covid-19 at the moment. The manager there is trying to get all his staff tested, just to check that they are free from covid-19 too. Not all those staff have a car, so they are not able to travel the miles to the local mobile testing facility. Can the Secretary of State tell me the best way for that manager to get his staff tested so that they can continue to look after all their vulnerable residents in a safe way?
Matt Hancock
Yes, we are rolling out testing to all care home residents and staff, symptomatic or asymptomatic, for elderly care homes. I announced that at the start of this urgent question. It is an important expansion of our testing now that we have built up the 100,000 tests a day capability. We will do that in part through mobile testing units, which are delivered by the armed forces; the testing unit goes to the care home, and staff and residents alike can be tested at the care home rather than having to travel. Clearly, whether people have a car of their own or not, when we test a whole care home, taking the testing to the care home rather than having to take everybody from the care home to a drive-through centre is a much better way of doing it.
I am very grateful to the armed forces for the part they have played in making this capability available. Our armed forces have done an amazing job in this whole crisis. Right across the board, the armed forces have stepped up where we have needed them. They have played a critical part in testing capability; we would not have got to 100,000 tests a day without them. The example that my hon. Friend rightly raises is just one of the ways our armed forces are playing their part and doing their duty in this crisis.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]
I am grateful, Mr Speaker. The Health Secretary told me that he would make public the evidence behind the Government’s repeatedly confirmed decision, in contrast with other countries, not to ask people arriving at our ports and airports to self-isolate. However, that evidence was not included in the Scientific Advisory Group for Emergencies papers published today, even though the papers say we were affected by many cases arriving or coming back from Italy and Spain. Surely, we need to see the evidence and scrutinise it in order to get border policy right. Why has it been withheld?
Matt Hancock
I will look into the question that the right hon. Lady raises.
Business | Timings | Remote division designation |
|---|---|---|
Local Government: motion to approve the draft Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020 | Up to 90 minutes | None |
Social Security: motion to approve the Employment Allowance (Increase of Maximum Amount) Regulations 2020 | Up to 90 minutes | None |
Local Government
(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
The Minister is asked to speak for no more than 20 minutes.
The Minister for Security (James Brokenshire) [V]
I beg to move,
That the draft Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020, which was laid before this House on 9 March, be approved.
The purpose of this order is to improve the delivery of public services in Greater Manchester by driving greater collaboration and bolstering the accountability of how those functions are exercised. The Local Democracy, Economic Development and Construction Act 2009 allows, in certain areas of the UK, the devolution of a number of municipal functions. In 2017, the Greater Manchester Combined Authority (Fire and Rescue Functions) Order conferred responsibility for the management of the Greater Manchester fire and rescue authority on the Greater Manchester Combined Authority. Fire and rescue services therefore came under the authority of the directly elected Greater Manchester Mayor, and arrangements were introduced to oversee the operational discharge of functions, with the scrutiny of fire and rescue functions being added to the remit of the corporate issues and reform overview and scrutiny committee.
In 2017, police and crime commissioner functions were transferred to the Mayor, and the role of deputy Mayor for policing and crime was established. The exercise of police and crime commissioner functions is scrutinised by the police and crime panel. Devolution of the exercise of fire functions to the Mayor, in parallel with the devolution of the police and crime commissioner functions, has provided for greater direct accountability of both functions under one individual, and has allowed opportunities for strategic and joined-up thinking in the blue light sector in Greater Manchester.
In July 2018, the Mayor of Greater Manchester wrote to the Home Secretary to request further changes to the governance arrangements for fire and rescue functions within the GMCA. He sought authority to delegate the exercise of the majority of those functions to the deputy Mayor for policing and crime, and to amend the scrutiny functions of the existing police and crime panel to include scrutiny of fire and rescue functions. The then Home Secretary approved the Mayor’s request in September 2018.
The order before the House today gives effect to the Mayor’s request by amending the 2017 order. It brings the exercise of police and fire functions closer together by allowing for the exercise of all delegable fire and rescue functions by the deputy Mayor for crime and policing. Some non-delegable functions—namely, those listed under article 6 of the 2017 order—remain the sole responsibility of the Mayor. These include the hiring and firing of the chief fire officer, signing off the local risk plan, and approving the annual declaration of compliance with the fire and rescue national framework.
To ensure that there are appropriate scrutiny arrangements of the exercise of delegated functions, the order also extends the remit of the Greater Manchester police and crime panel to include scrutiny of the exercise of fire and rescue functions, whether they are exercised by the Mayor or by the deputy Mayor for policing and crime. To reflect its wider role, the panel will become known as the police, fire and crime panel. The order will provide a clearer line of sight for the exercise of fire and rescue functions, with delegable functions being exercised by the deputy Mayor for policing and crime rather than by a committee. This will make it clearer to the public who is responsible for which decisions and bring further clarity to the governance process. It will also ensure that police and fire matters are scrutinised in the round by extending the role of the police and crime panel.
This brings similar scrutiny arrangements to fire as already exist for policing. Crucially, by bringing together oversight of policing and fire under the Deputy Mayor for policing and crime, it will also help to maximise the opportunities for innovative collaboration, foster the sharing of best practice, and ensure that strategic risks are reviewed across both services. The Kerslake report on the tragic Manchester Arena attack emphasised the need for greater collaboration between fire services and other public bodies. This order takes important steps to do just that.
Finally, I want to comment on the fantastic collaboration efforts taking place in Greater Manchester as part of the response to the covid-19 pandemic. I thank the incredible fire and policing personnel for everything they are doing in Greater Manchester and beyond. They have stepped up to volunteer to assist and protect their communities. It is right that we recognise the critical role they are playing in supporting the country’s response to covid-19, and I pay tribute to them for the difference they are making at this time of need. They are a credit to themselves and to the services they work within.
Sarah Jones (Croydon Central) (Lab)
We are living through extraordinary times. Covid-19 has dealt a great blow to our country—its health, its economy and its way of life—and we are mourning the loved ones we have lost. But in the midst of this crisis, we have seen countless acts of extraordinary resilience and bravery.
As usual, as the Minister just said, the fire service has been front and centre in this battle, answering our calls for help, driving ambulances, delivering personal protective equipment, helping to distribute food and even, I hear, delivering babies. The fire service is the most trusted of all our emergency services because it is always there when we need it, so it would not be right to begin this debate without paying tribute to the work of our firefighters across the UK. Yesterday was Firefighters Memorial Day. The minute’s silence at midday was a moment to reflect on the more than 2,300 UK firefighters who have lost their lives in the line of duty. Each one of those tragic lives lost paints a stark picture of the realities faced by firefighters. They risk their lives every day to ensure the safety of each and every one of us.
We are here to debate the draft Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020. The Labour party supports the order. It is nearly two years since the Greater Manchester Combined Authority asked to bring responsibility of fire and rescue services into the hands of the deputy mayor for policing and crime, with no particular reason for the delay, as far as I can see, and there is precedent elsewhere in England for this model.
This relatively straightforward order represents the gentle evolution of devolution. As Donald Dewar said at the opening of the Scottish Parliament, devolution is not an end, but a “means to greater ends.” We should be constantly open to change, to better serve our local populations.
The order allows the Mayor to make arrangements for fire and rescue functions to be exercised by the deputy mayor for policing and crime, and amends the remit of the Greater Manchester police and crime panel to include scrutiny of the exercise of those fire and rescue functions in addition to their existing remit of police and crime commissioner functions. That allows the Greater Manchester police and crime panel to scrutinise the delivery of all the main functions of the deputy mayor for policing, fire and crime.
The order will build on the success of devolution that we have already seen in Greater Manchester. Under Andy Burnham, we have seen real action to tackle rough sleeping, real support for young people and the biggest investment in cycling and walking outside London. Devolution enables good local, joined-up and effective policy making.
I would like to take this opportunity to commend the efforts of the Mayor of Greater Manchester, Andy Burnham, his deputy mayor and the Greater Manchester Combined Authority for their recent work on fire and rescue services. Following the tragic fire at Grenfell, where 72 people lost their lives, they set up the Greater Manchester high-rise taskforce, chaired by Salford City Mayor Paul Dennett, to provide fire safety reassurance. They carried out proactive inspections of all high-rise residential premises to ensure that all buildings comply with fire safety regulations.
Greater Manchester has 78 high-rise buildings that have had to adapt interim safety measures because of serious fire safety deficiencies and slow Government action to support remediation. In late February, I watched Andy Burnham, City Mayor Dennett and other civic leaders and MPs from across the country join residents caught up in the cladding crisis at a rally on Parliament Square, calling for urgent action from the Government in the Budget. The Government listened, and the Chancellor announced the £1 billion building safety fund for the removal of dangerous cladding of all forms from high-rise buildings.
With thousands of leaseholders across the country still living in buildings wrapped in unsafe cladding, the focus must now be on completing remediation works as quickly as possible. We only need to briefly read the accounts of the Manchester Cladiators to know the dire situations they face on a daily basis.
From blocks like Imperial Point in Salford Quays to Albion Works in central Manchester, the stories are painfully similar: lives put on hold as residents are trapped in unsafe buildings, unable to sell their properties, and living in constant emotional and financial distress. I do not want to rehearse all the arguments from last week’s Fire Safety Bill, but we know that there is much more to be done by the Government and that we must move faster. I press the Minister again to provide an update on the progress of the review and the costs that residents are incurring while paying for waking watches. Is this review looking into the whole costs of interim fire safety measures?
As the Fire Brigades Union said yesterday, each time a firefighter dies at work, we need to understand what led to their death and what could have been done to prevent it. Yesterday we remembered the 2,300 firefighters who have died in service, but we must never accept their loss as inevitable. It is our duty to learn from every firefighter death and to fight for the improvements to operational practices that could save lives into the future. But that job has been immeasurably harder over the last decade, as we have seen brutal funding cuts.
After a decade of austerity, we have 11,000 fewer fire- fighters, so when fires sadly do occur, fire engines may answer the call without enough firefighters to tackle the blaze. That is not only dangerous for the public, but potentially deadly for firefighters too. We could not debate this order without considering the heavy hand of 10 years of cuts to our fire services in Greater Manchester and across the country. The landscape of complexity post Grenfell, with the enormous fire risk of so many buildings across the country, compounds an already difficult situation. Given the extent of the crisis in recent years and the number of individuals who live in unsafe buildings, we need a strong fire service to be ready to deal with what can perhaps be described as a ticking time bomb for as long as the cladding remains in place. Central Government funding for fire and rescue services in Greater Manchester has been decimated over the past decade; it has fallen by almost a third from £75.2 million in 2010 to £52.9 million now. Across the UK, between 2010 and 2016, the Government cut central funding to fire and rescue services by 28% in real terms, followed by a further cut of 15% by 2020. These cuts have led to a cut of 20% in the number of firefighters.
When a Grenfell Tower resident first called 999 just before 1 am on 14 June 2017, it was five minutes before a fire engine was at the scene and 13 minutes before the first firefighters entered the building. Equally, it was only a matter of minutes after the first call was made that fire services were on the scene of the fire at the student accommodation in Bolton in November last year. Clearly, when operating on such fine margins as the hazard of fire presents, fire services rely on rapid turnaround to be effective. It is shocking, then, to see that fire response times across Greater Manchester since 2010 have risen from seven minutes and 14 seconds to seven minutes and 20 seconds, with a rise of over 40 seconds across England. It may seem like only a matter of seconds, but with the fine margins that exist in fire and rescue situations, a rise in fire response times is unacceptable.
But this is no damning indictment of the fire service across central Manchester or anywhere else. No—it is far more a wrong that stems from a decade of successive Conservative Governments’ neglect of fire and rescue services. While funding has been cut, the number of firefighters across Greater Manchester has fallen by 29% since 2010—down from 1,923, to 1,368 in 2019. The number of operational appliances has fallen by 14% over the same period. The Mayor and deputy Mayor in Greater Manchester, and their teams, are doing their best in these circumstances—namely, with their pledge to bring in 108 new firefighters—but, despite their best efforts, there remains a gaping hole left by increasingly scarce central Government funds.
On Friday, we will celebrate VE day, marking the end of world war two. In the first 22 nights of air raids during the blitz, firefighters fought nearly 10,000 fires. According to Winston Churchill, the fire service
“were a grand lot and their work must never be forgotten.”
Well, the Opposition—and I am sure the Government—agree. With such extensive cuts across the past decade in provisions for fire and rescue services, and with a far more precarious environment facing those services in the wake of the Grenfell tragedy, will the Minister tell us when the Government are going to begin to make fire and rescue services in Greater Manchester and across the rest of the country a priority? With firefighters risking their lives to save our lives, the bare minimum they can expect is a properly funded service. After a decade of cuts and a covid crisis where our firefighters have gone above and beyond, we must now see real change.
Mr Deputy Speaker (Mr Nigel Evans)
There will now be a 10-minute limit on Back-Bench contributions. I hope that those who are contributing have a timing device available to them.
Jeff Smith (Manchester, Withington) (Lab)
I am very pleased to follow our excellent shadow Minister, and to be able to contribute briefly to today’s debate on this statutory instrument. First, I refer Members to my entry in the Register of Members’ Financial Interests. I rent my constituency premises from the Greater Manchester Fire and Rescue Service, and I am proud to do so. As we have heard, yesterday was International Firefighters’ Memorial Day, so I would like to begin by adding my tribute to the bravery of all our firefighters, past and present. As the shadow Minister said, firefighters have played a vital part in keeping people safe during the coronavirus crisis, but they also put their lives on the line all year round, and we are all grateful to them.
Although this is a piece of legislation with limited scope, it is a motion that will prove important for the Greater Manchester Fire and Rescue Service and, perhaps more importantly, for the public it works so hard to protect. Good strategic oversight and governance of our emergency services is a key way of ensuring the safety of our communities and the effectiveness of our fire and rescue service in Manchester. It is essential that we have the best possible framework in place, along with proper funding, to ensure that the fire and rescue service is run as effectively as possible. We need the best possible means to hold to account those who manage the service, which is why I am supporting this legislation today.
In early 2018, the Greater Manchester Combined Authority carried out a review of its governance arrangements in the light of the first 12 months of the Mayor’s term of office. As part of that, it undertook a review of the fire and rescue function, and it was important that that review included consideration of the issues identified in the Kerslake report, particularly in relation to the co-ordination and communication between the emergency services following the Manchester Arena bombing. It is important that we learn the lessons of that tragic incident.
That report made recommendations for the improvement of co-operation between the fire service and other emergency services. The GMCA agreed that it would be clearer and more transparent, and that it would provide more accountable leadership for the fire functions, if the Mayor were able to delegate those functions to the deputy Mayor for policing and crime, and for the scrutiny functions to sit with the police and crime panel, which would then become the police, fire and crime panel. This statutory instrument does those two things, and I am pleased to support it on that basis.
This is an expansion of the scrutiny panel’s duties that I know the police and crime panel has been keen to achieve, not for its own sake but because it is keen to ensure real integration in how the services are run, and effective scrutiny of that integrated working. This will mean that there are clear lines of accountability to our excellent deputy Mayor. Allowing the Mayor to delegate fire and rescue functions to the deputy Mayor will enable her to accelerate the pace of change and to ensure that collaboration is implemented more effectively and that strategic risks are reviewed across both services. The changes will also provide a single point of contact for the public and ensure quicker decision making at the appropriate level, while ensuring delivery of the duty to collaborate. They will allow informed and rounded arrangements for prevention and a more co-ordinated response to manage the terror threat. As a result, I am confident that we can look forward to increased collaboration between the fire service and other emergency services, enabling them to act more efficiently and effectively in the services that they provide to the people of Greater Manchester. The issue is particularly important in the current context. The need for properly integrated services, maximising the efficiency of working between our blue light services, comes at a time when both the police and the fire and rescue authority in Greater Manchester are under huge pressure.
Ten years of austerity has hit the Greater Manchester fire and rescue service hard. Since 2010, it has seen more than £20 million per year removed from its budget. As we have heard, over that period the Government grant to the fire and rescue service has reduced from approximately £75 million to about £53 million—a decrease of almost 30%. On the ground, that means that the services have had to lose 16 fire engines since 2010, dropping from 66 to 50, a 24% reduction. According to figures from the FBU, it means that Greater Manchester lost 624 firefighters between 2010 and 2019.
All that has happened at a time when Greater Manchester’s population is increasing; there was an increase of over 150,000 during the same period. At the same time, the built environment is becoming more complex and the fire service is facing additional pressures. Following the Grenfell Tower tragedy, Greater Manchester formed the high-rise taskforce to try to prevent anything like that from happening in our region. As we have heard, it has been carrying out proactive inspections of all the high-rise blocks to ensure that fire safety regulations are being complied with and that people feel safe in their homes. But Greater Manchester still has 78 buildings that have adopted interim measures because of significant fire safety deficiencies. Making all those buildings safe is now an urgent task.
That is all happening now, and it is hard enough without coronavirus. But the impact of the current coronavirus crisis on local authority budgets will inevitably take its toll. We know that the 10 Greater Manchester authorities are forecasting £424 million of lost income as well as £169 million in extra costs as a result of coronavirus. Although the £170 million of funding announced by the Government is, of course, welcome, there are no Government commitments yet to fully reimburse the authorities for that lost income. Without that money, we may well have to see further cuts to our blue light services. There will inevitably be a significant negative impact on council tax collection, which poses a risk to the police and fire budgets in future years, with collection fund deficits and implications around calculating the tax base.
In the short term, the Government really need to commit to fully reimbursing local authorities for their losses due to coronavirus. Local authorities are already struggling after years of being the hardest hit part of the public sector, and they simply cannot afford to be hit again. Longer term, when we are on the other side of the coronavirus crisis, I hope we will see the Government make an honest assessment of the levels of funding for Greater Manchester fire and rescue service and the police, and increased central funding to keep our people safe.
In this context, of course, it will take more than efficient governance to enable the fire and rescue service to continue keeping people safe—it will take proper investment in our blue light services as well. But effective and efficient governance is important, and enabling the high-level strategic overview and accountability to be integrated will help deliver efficiency and accountability to our service. On that basis, I welcome the legislation today as crucial to help improve our work and the work of the Greater Manchester fire and rescue service, and ultimately keep our communities in Greater Manchester safe.
Chris Green (Bolton West) (Con)
First, I pay tribute to all the blue light services that serve us so well, year in, year out—particularly during this difficult time of the covid-19 crisis. I also pay tribute to Greater Manchester fire services, particularly those who went to the fire at the University of Bolton last year, and did such a good job in saving lives and protecting property.
I welcome the decision to bring forward this positive change, which brings the governance and scrutiny of the fire services in line with those of policing. That is to be welcomed. The Minister referenced the importance of a clear line of sight, and therefore scrutiny and accountability, of leadership when it comes to delivering on these services. Currently, that is also the responsibility of the Mayor; obviously, the deputy Mayor is taking that responsibility for policing at the moment, and she will have the additional responsibility for fire services as well.
We in Greater Manchester are in a difficult position. London has the Greater London Authority—a body of people who can publicly scrutinise and challenge the Mayor of London. It can publicly hold him to account over his decisions, good or bad.
In Greater Manchester, however, we do not have that. The responsibility to hold the Mayor and the combined authority to account sits between Westminster politicians, councillors and borough leaders. At the moment, that is not an effective system. I value the move we are debating today, but a question needs to be raised about the overall transparency and scrutiny of the Mayor of Greater Manchester. I am not suggesting that we ought to have a Greater London Authority-type Assembly, but we do need an effective mechanism to challenge the Mayor, and the decisions that he and his team make. To put that in a particular context, there have been major failings in the iOPS computer system, which is used by frontline police officers day in, day out. Those failings have created major problems for frontline police, putting them and people across Greater Manchester in danger, but there has been no mechanism for the Mayor and his Deputy to be held directly to account in public. This is a good change, but further changes are required.
Andrew Gwynne (Denton and Reddish) (Lab) [V]
It is a pleasure to contribute to this important debate, not least because I have been a firm supporter of devolution in Greater Manchester, and indeed across England, for a considerable time.
First, I want to welcome the Minister of State to his place back in the Government. He has been in the Home Office since 13 February, but this is my first opportunity to welcome him back to the Government Front Bench. Of course, we used to spar across the Dispatch Box when he was the Secretary of State for Housing, Communities and Local Government. I know that, like me, he believes firmly in devolution, which is why I think there is a degree of consensus about the need for this important measure for Greater Manchester today. I also want to welcome my hon. Friend the Member for Croydon Central (Sarah Jones) to her new role as the shadow Home Office Minister. I look forward to working alongside her from the Back Benches.
A day after International Firefighters Day, I want to pay tribute to all those dedicated firefighters, and other Greater Manchester Fire and Rescue Service staff, who work so hard week in, week out to keep people across Greater Manchester, the 10 boroughs that make up our county, safe. Along with so many other public services, they are doing an amazing job of keeping residents safe during the current coronavirus outbreak. They deserve wider acknowledgement for their tremendous work.
In turning to the substance of the statutory instrument before us today, it is important to keep in mind that, as my hon. Friend the Member for Manchester, Withington (Jeff Smith) said, the origins of the measures lie in the Manchester Arena terrorist attack of 2017, one of the darkest days for Greater Manchester that I can remember in my 45 years of living here. As we know, the Kerslake report into the attack, which Mayor Andy Burnham commissioned, highlighted the importance of the fire and rescue service working more closely with other emergency services, in particular Greater Manchester police. I have always believed that one of the values of devolution is to prevent the disjointed system that has developed over a number of years and allow the more rounded, joined up delivery of public services.
I believe that the changes in the statutory instrument will help with that. They will give the deputy Mayor for policing and crime, Baroness Hughes of Stretford, a distinguished former Member of this House, the powers to ensure that that collaboration is at the heart of the relationship between our police and fire services. The changes—I disagree with the hon. Member for Bolton West (Chris Green)—will improve the transparency and accountability of the management of both fire and police services in Greater Manchester by transforming the police and crime panel into the police, fire and crime panel. They will also provide an invaluable and important scrutiny function, which will improve the governance in our area.
It is right that the management of our fire and rescue service receives the same level of scrutiny as that of our police, but the Greater Manchester Fire and Rescue Service is used to working in challenging circumstances, and not just when fighting fires. I firmly believe in devolution, but it should never be used by Ministers to shield themselves from decisions taken in this House. As we have heard, since the Minister’s party entered government we have seen funding cuts to the Greater Manchester Fire and Rescue Service of more than £20 million a year, and these cuts have real consequences. Unfortunately, in Greater Manchester they have meant reduced services and lost jobs. As we have heard, Greater Manchester was served by 66 fire engines, but today the figure is just 50, which represents a reduction of almost a quarter of the fleet.
The challenges facing our fire services have not diminished in the past decade. On the contrary, Greater Manchester’s fire service deals with all sorts of emergencies and crises, not the least of which has been the largest English wildfire in living memory, on the moors above Stalybridge, in the neighbouring constituency to mine, last year, and the huge blaze at The Cube student accommodation in Bolton, which the hon. Member for Bolton West mentioned. I do not believe that anybody taking part in this debate or listening at home will be happy that our fire service has been cut so severely, but services cannot continue to be provided at the same level when the Government reduce its budgets in the way they have.
Our councils, along with our emergency services, have really stepped up to help deal with the challenge of covid-19—they are on the frontline. So I was concerned to see the Communities Secretary appear to backtrack on compensating councils for all the additional expense of dealing with the crisis. That has to be undone; the promise to spend “whatever it takes”, with Government covering the costs, should be honoured.
In conclusion, I am very proud of our fire and rescue service in Greater Manchester, which does a fantastic job in incredibly difficult circumstances. In this period of Conservative Government, it has dealt with some of the more challenging emergencies, and it has risen to the challenge every single time, despite its funding being reduced. I say to the Minister that we cannot, and should not, try to keep our communities safe on the cheap. This statutory instrument is a good step in the right direction to improving accountability, transparency and, importantly, collaboration with other emergency services. Now let us give our firefighters the support they need—financial support, from Government.
Navendu Mishra (Stockport) (Lab) [V]
As it was the fourth annual Firefighters Memorial Day yesterday, I wish to pay tribute to the life-saving work of all those who are part of our fire service and put their lives on the line for all of us on a daily basis. I also wish to thank Mayor Andy Burnham and the deputy mayor for the important work they have done on fire safety. It is now almost three years since the tragic Grenfell Tower fire, where 72 people lost their lives due to a combination of dangerous cladding and inadequate fire safety strategy. Despite the ongoing inquiry and the steps many councils have taken to improve fire safety, Greater Manchester continues to have 78 high-rise buildings that have had to adopt interim safety measures because of serious fire safety deficiencies and the Government’s failure to act quickly enough, more than 1,000 days since the Grenfell tragedy. With people rightly concerned about the situation, many have taken matters into their own hands, by organising to demand immediate action by the Government. For example, the Manchester Cladiators are a group of residents who formed last year to represent those in Greater Manchester who have been impacted by the cladding scandal, including by having the flammable aluminium composite material cladding that was used on Grenfell Tower. They have been campaigning tirelessly to make their voice heard amid continuing Government delays and indecision, and I take this opportunity to applaud them for the work they have done to keep this issue at the forefront of everyone’s minds.
As for the Government, there is a reason they have been slow to act. Quite simply, it comes down to a decade of austerity. They have ravaged central funding to fire and rescue services across the UK. For example, between 2010 and 2016 alone, the Conservative Government slashed funding by 28% in real terms, and that was compounded by a further cut of 15% by 2020. That has had a crippling effect, resulting in 11,000 fewer fire service personnel, reducing the fire service’s capacity by a staggering 20% and putting people’s lives in further jeopardy. In Greater Manchester alone, in the past five years critical funding has fallen by more than 15%. In cash terms, that amounts to a cut of about £10 million that our service has had to absorb. Since 2010, there has been a one-third reduction.
It is not just reducing bureaucracy and red tape that is cutting the firefighters who battle blazes and save lives on a daily basis. In Greater Manchester, there are now 29% fewer firefighters, combined with a 14% reduction in life-saving fire equipment. The picture is truly bleak. Is it any wonder, therefore, that in 2018 the UK faced the highest number of fire-related fatalities in almost a decade, which directly correlated with the increasing cuts that the fire service has faced? Greater Manchester Mayor Andy Burnham has attempted to mitigate that by committing to the recruitment of 108 firefighters, but even that only goes part of the way to redressing the balance and does not bring the levels up to what they were in 2010. In addition, central Government cuts have left Greater Manchester Combined Authority facing a situation where there is no escaping the fact that response times will be longer, putting more lives at risk.
At a time like this, we need to make sure that the past decade of austerity is reversed. It is completely unacceptable that in 2020, residents continue to live in housing that cannot protect them, while their fire services continue to face cuts that put them further at risk. The situation needs to be urgently addressed. As we have seen with the coronavirus crisis, underfunding key services leaves them vulnerable and ill equipped to handle further challenges. I call on the Government to do all they can immediately to reverse the year-on-year cuts, to provide adequate funding so that our fire service is fit for purpose and to ensure that all housing, including high-rise towers, is safe to live in.
James Brokenshire [V]
With the leave of the House, Mr Deputy Speaker, I will respond to the debate. I appreciate the comments and contributions of Members from all parts of the House on the order and the broad support it has secured through all the contributions we have heard. It is right that so many people underlined the huge contribution, the service and the sacrifice that firefighters provide in Greater Manchester and across the country day in, day out, especially in the context of international Firefighters Memorial Day.
It is also worth again underlining the contribution that firefighters have made in the covid response. In Greater Manchester, more than 500 serving and retired fire service personnel are volunteering to assist the wider covid-19 response. That ranges from supporting wider frontline staff with the provision of PPE through to patient transfers and support for some of the most vulnerable. I take this opportunity to again thank Greater Manchester Fire and Rescue Service staff for the incredible work they are doing across the area and the difference that that is making.
A number of the contributions focused on the issue of funding, and I should highlight that overall fire and rescue authorities will receive around £2.3 billion in 2020-21. Fire and rescue services received an additional £20 million in the Budget, which will enable them to increase fire inspection and enforcement capability and to build capacity to respond precisely to the Grenfell Tower inquiry’s findings. In 2020-21 Greater Manchester Combined Authority has a core spending power of £98.7 million, an increase of £2.9 million, or 3.1%, on 2019-20. Greater Manchester fire and rescue authority also held £42 million in total useable reserves when it transferred to the governance of the mayoral combined authority in 2017.
I also want to respond to the challenges and issues that have been highlighted on some of the real pressures arising from the current coronavirus pandemic. The Government have provided over £3.2 billion to local authorities to support their response to the pandemic; £1.6 billion was paid at the end of March, with a further £1.6 billion to be provided shortly, of which fire and rescue services will receive a 3% share.
Stand-alone fire and rescue authorities, including Greater Manchester fire, received £6.5 million of the £1.6 billion provided in March and will receive a further £28.5 million share of the additional £1.6 billion announced this month. County councils or unitary authorities with fire responsibilities have also received a share of the fire element of the £1.6 billion, but they will receive this as part of the wider allocation, reflecting the totality of their responsibilities. In addition, the Home Office has secured £6 million for a fire covid-19 contingency fund to support fire and rescue authorities that incur significant costs as a result of taking on additional duties during the coronavirus outbreak. We are working through the detail of how this will operate and are consulting the sector on it.
I turn now to points made in the contributions to the debate, first by the hon. Member for Manchester, Withington (Jeff Smith) and the hon. Member for Denton and Reddish (Andrew Gwynne), who I wish well in his new role on the Back Benches. I know that he will be a firm champion for his constituents, and although we did not always agree in our often robust exchanges, I wish him well. They highlighted the Lord Kerslake review, and this order is important in taking that forward. Lord Kerslake’s report into the tragic Manchester Arena attack emphasised the need for greater collaboration between the fire service and other public bodies. The review demonstrated the benefits of investing in collaborative partnership and emergency planning, and by bringing together the oversight of both fire and police services, this order will help to maximise the opportunities for innovative collaboration between policing and fire, and ensure that best practice is shared.
The hon. Members for Croydon Central (Sarah Jones) and for Stockport (Navendu Mishra) highlighted the issue of combustible cladding, and after London, Manchester has the most buildings affected by unsafe cladding. We do understand the concerns of many leaseholders and building owners over the costs of remediation of this cladding. As we have heard, Greater Manchester has taken a proactive approach. It has established a high-rise taskforce to co-ordinate work across the Greater Manchester Fire and Rescue Service and all boroughs in the Greater Manchester Combined Authority. In practice the taskforce is led by the Greater Manchester Fire and Rescue Service.
I want to highlight that nationally, we have made available in the Budget £1 billion to fund the removal of unsafe non-aluminium composite material cladding in 2020-21. This is in addition to the £600 million already made available to ensure the remediation of unsafe ACM cladding, but this Government funding does not absolve building owners of responsibility to ensure their buildings are safe. As I highlighted in the debate on the Fire Safety Bill last week, we want to underline the fact that remediation work can and should continue where it is safe to do, despite the current restrictions and challenges that we face. Building owners should consider all routes to meet costs, protecting leaseholders where they can, for example through warranties and recovering costs from contractors for incorrect or poor work. Colleagues at the Ministry of Housing, Communities and Local Government have been driving forward this work and will continue to do so.
In the context of the governance issues and some of the comments of my hon. Friend the Member for Bolton West (Chris Green), today’s order will provide a clearer line of sight for the exercise of fire and rescue functions. It will make it clear to the public who was responsible for which decisions and help them to understand the Government’s process. Importantly, it will also help to ensure that collaboration is implemented more efficiently and effectively by bringing those functions together, but that does not dilute the accountability of the Mayor, who remains subject to the scrutiny of the police and crime panel and is ultimately responsible for the functions. The panel has the power to scrutinise the Mayor. For instance, it may require the Mayor to attend a meeting, at reasonable notice, to answer any questions that appear to the panel to be necessary for it to be able to carry out its duties. Ultimately, too, it is the Mayor who remains accountable at the ballot box for both the actions that he has taken and the actions of the deputy Mayor for policing and crime.
Today’s order confirms the request of the democratically elected Mayor of Greater Manchester as part of the devolution of powers and serves to clarify and improve governance arrangements for fire and rescue services in that great city. I firmly believe that the order serves the interests of the people of Greater Manchester. I welcome the support for the order, and I commend it to the House.
Question put and agreed to.
Resolved,
That the draft Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020, which was laid before this House on 9 March, be approved.
Social Security
(4 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Rosie Winterton)
I call Minister Jesse Norman to move the motion. He is asked to speak for no more than 20 minutes.
The Financial Secretary to the Treasury (Jesse Norman)
I beg to move,
That the Employment Allowance (Increase of Maximum Amount) Regulations 2020 (S.I., 2020, No. 273), dated 11 March 2020, a copy of which was laid before this House on 10 March, be approved.
This draft legislation allows the Government to increase the employment allowance by one third, or £1,000, giving more than 1 million small and medium-sized businesses up to £4,000 off their employer national insurance contributions bills. Employers pay secondary class 1 national insurance contributions on their employees’ earnings above the secondary threshold, which is set at £8,788 this year. Those contributions are charged at 13.8% and constitute the largest business tax by revenue in the UK.
The employment allowance was introduced in 2014 to help businesses with the costs of employment and to encourage them to grow and to hire more staff. It is claimed by more than 1 million employers in order to reduce their employer NICs bill by up to £4,000 per year. The Government recently restricted the employment allowance to smaller businesses with a national insurance contributions liability under £100,000, thereby ensuring that this valuable support is targeted at those who need it most.
At Budget, the Chancellor announced that we would deliver our commitment to increase the employment allowance for smaller businesses from £3,000 to £4,000 from April 2020. Businesses have been able to access that increased support from the start of the tax year. The draft regulations, if passed, will legislate for that increase to the employment allowance. More than half a million eligible businesses will benefit from the increase by up to £1,000. The Treasury expects the average gain from this measure to be about £850.
The Government are committed to supporting the UK’s smallest and often most entrepreneurial businesses, and this measure achieves that. Some 95% of the businesses benefiting from this increase are small and microbusinesses. Increasing the employment allowance to £4,000 means that 65,000 more businesses will see their employer national insurance liabilities fall to zero. Since introducing the employment allowance in 2014, the Government will have taken around 650,000 of the UK’s smallest businesses out of paying national insurance contributions entirely.
The Government are determined now more than ever to support people and businesses. At Budget, we increased the national living wage by 6.2% to £8.72 an hour. Along with increases to the income tax personal allowance and the national insurance primary threshold, that means an employee working full time on the national living wage is £5,200 better off today compared with April 2010.
However, we are aware that by supporting people at work through national living wage increases, we also increase cost for businesses. Increasing the employment allowance helps businesses to meet that cost. Businesses will now be able to employ four rather than three full- time employees on the national living wage without paying any employer national insurance contributions.
This increase will cost more than £2.3 billion over this Parliament; it is a large tax measure. It should be noted that in just four years, the Government have doubled the value of the employment allowance. The draft regulations legislate for a Budget measure that is already helping more than half a million of our smallest businesses with the costs of employment and has been supported by the Federation of Small Businesses.
Before I conclude, let me welcome the hon. Member for Ilford North (Wes Streeting) to the Labour Front Bench. I enjoin him and all colleagues in the House to join me in supporting the draft regulations, which I commend to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Minister, Wes Streeting, who is asked to speak for no more than 15 minutes.
Wes Streeting (Ilford North) (Lab)
It is a privilege to reply on behalf of the Opposition, and you will be relieved to know that I hope to speak for nowhere near as long as 15 minutes. My party has resolved to work constructively with the Government through the extraordinary and unprecedented challenges presented by the coronavirus. It is in that spirit that I address today’s motion to approve the proposed increase in the employment allowance.
There is an air of unreality to our proceedings that extends beyond this empty Chamber and virtual Parliament to the substance of this afternoon’s business. On Second Reading of the Finance Bill, my hon. Friend the shadow Chancellor observed that it felt as though the Bill had been written for a different age. I feel the same way when I look at today’s motion on the employment allowance. This measure, which was announced in the Budget, increases the maximum amount of employment allowance from £3,000 to £4,000 for the new tax year, benefiting small and medium-sized businesses, charities and amateur sports clubs. It is expected to reduce the national insurance contribution bill to zero for around 65,000 businesses.
We recognise that the intention behind the measure is actively to enable small, growing enterprises to take on staff without incurring national insurance contribution liabilities, recognising that small businesses may need assistance to meet the costs of the welcome increase in the national minimum wage—it is described as a living wage, but it is perhaps almost a living wage. In ordinary times, we would welcome that, but for the businesses, charities and sports clubs that stand to benefit, these are the most extraordinary circumstances, just as they are for the whole country. For many of those organisations, this crisis is an existential one. Despite their best efforts, some of the businesses and charities that the Government intend to help will simply not exist by the end of the year. Of course, any measure that reduces their outgoings will be of some help, but, taken alone—or even as part of the package of support already announced by the Chancellor—this will not be enough to stop many businesses and charities going bust, so I urge the Financial Secretary and his colleagues in the Treasury to go further.
I turn first to the SMEs that stand to benefit from the proposed increase in the employment allowance. Small businesses form the backbone of the economy in communities such as mine across the country, and their survival through this crisis will form a crucial part of the recovery that we hope will follow. As we have heard, the Federation of Small Businesses has, as ever, done a sterling job of making sure that the pressures facing those businesses are well understood by Parliament. I take this opportunity to thank the FSB for all that it is doing while grappling with the challenges that coronavirus poses to its own operations and ways of working. Just last week, the FSB’s Martin McTague told the Business, Energy and Industrial Strategy Committee:
“Most small businesses have gone into this crisis with very little in the way of cash reserves. The latest evidence is that about 30% operate with only two weeks of cash, so they are in a very vulnerable position trying to cope with this crisis.”
That is why my right hon. Friend the shadow Business Secretary has called on the Government to introduce a second wave of business support, including an extension of the furlough scheme where necessary and greater flexibility to enable part-time working. The Chancellor has indicated that the Government will not allow a cliff-edge to form, so some clarity on how he plans to avoid that risk would be both timely and welcome for businesses that are already facing make-or-break decisions.
According to the Office for National Statistics, two thirds of companies have made use of the Government’s furlough scheme, many of which are small businesses. Since the Chancellor is already considering how to unwind the scheme, can I ask the Financial Secretary what consideration the Treasury is giving to calls from the FSB and others to introduce some flexibility in the scheme to allow for part-time working? Many small businesses cannot afford to bring staff back full time to quote for work, generate new business, fulfil orders or keep back-office functions ticking along. A small business might want to furlough its staff for 80% of the time, but under the current rules that is not possible if it has just two or three staff.
A more flexible approach to furlough rules would give SMEs the flexibility they need, which the FSB has described as absolutely critical for survival and recovery. That is why my right hon. and learned Friend the Leader of the Opposition called for that flexibility as part of his attempt to build national consensus on the next phase of the coronavirus response. It would be reassuring to businesses if the Financial Secretary could give us some hope today that consensus on this issue can be achieved.
As the Financial Secretary will be aware, the sorts of businesses that the employment allowance is designed to benefit will benefit from the opening of the bounce back loan scheme. That is welcome, but some serious issues remain around the working of the CBIL scheme for SMEs. Many SMEs are reluctant to take on loans because of the concern that they will not be able to repay them on the terms on offer. What more will the Government do to ensure that cash is reaching the businesses that need it?
I shall turn now to the charities that stand to benefit from the proposed increase in the employer’s allowance. For small charities, this will come as some relief. According to the survey conducted by the National Council for Voluntary Organisations, the Institute of Fundraising and the Charity Finance Group, charities are reporting a projected loss of 48% on their voluntary income and a third being wiped off their total income, with 91% of those surveyed expecting to have their cash flow disrupted. Although the vast majority felt that they could play a role in responding to the coronavirus outbreak, 62% were anticipating reducing their charitable activity. So for the smaller charities that the employment allowance increase is designed to benefit, the financial challenge will be even more acute.
We recognise that the Government committed £750 million in support for the voluntary sector and that they provided match funding to “The Big Night In”, but this support has failed to match the scale of the challenge facing our charities. The NCVO has calculated that a three-month lockdown would cost the sector £4.3 billion, which is six times the £750 million of support announced, so will the Financial Secretary tell us what more the Government plan to do to ensure that the charities eligible for the increase in the employment allowance still exist by the end of the year?
Since I have the Financial Secretary’s ear this afternoon, and given that the opportunities to raise issues with the Government had become more limited by the constraints that are understandably in place as a result of the coronavirus, may I take this opportunity, with the brief indulgence of the Chair, to lay down a marker about the future of the social investment tax relief? SITR is the only tax break for investors in social enterprises and charities, and it would be damaging to lose it in the current climate, so may I ask the Financial Secretary if he will give serious consideration to calls for a time-limited two-year extension to the relief, so that the organisations that benefit from SITR can continue to leverage in philanthropy to benefit a wide range of good causes?
Returning to the issue of employment allowance, this measure is estimated to cost the Government £455 million in lost revenue for the current tax year, which makes it all the more important to ensure that the benefit of this increase is enjoyed by those who are genuinely eligible and for whom the increase is designed. The Financial Secretary will know that there have been concerns in the past that the employment allowance has been exploited by tax avoidance schemes using umbrella companies to avoid national insurance contribution liabilities. We know that Her Majesty’s Revenue and Customs included anti-avoidance measures in the allowance from launch, and made it clear through Spotlight 24 that attempted avoidance arrangements such as these, which seek to use artificial and contrived arrangements to gain an unintended advantage, do not work. However, these measures require enforcement. Given the significant cuts in resources that we have seen, including job losses and tax office closures under successive Conservative-led Governments in the past decade, can the Financial Secretary reassure the House that any such avoidance is being identified and that tax inspectors are taking appropriate action?
In conclusion, the increase in employment allowance may not have quite the impact that was intended when the policy was first announced, but in so far as it will provide a bit of extra help to small businesses and charities, we welcome it and will not be opposing the Government’s motion. Our charities, small businesses and enterprises often represent the best of Britain and the beating heart of our local communities, and I hope that this measure will provide some assistance to those going through tough times. Where the Government take the right action, they will find our support and co-operation, as they do this afternoon. Lives and livelihoods are at stake, and the Government must go further and faster to give small businesses and charities the backing they need to weather this crisis and play their part in building a better country in its aftermath.
Neil Gray (Airdrie and Shotts) (SNP) [V]
Thank you, Madam Deputy Speaker. Like the shadow Minister, I do not intend to take anywhere near the quota of time on offer.
I thank the Minister for the motion. I dealt with him positively on the Roadchef Employee Benefits Trust issue and I hope we can continue to assist in progressing that matter. However, I must challenge him on his comments regarding the minimum wage. The minimum wage premium is not the real living wage. I encourage the UK Government to follow the Scottish Government’s lead by engaging with business to encourage more employers to pay the real living wage, if they cannot make it the minimum wage, and to remove the age discrimination that means under-25s cannot earn the same as their older colleagues for doing the same job.
As this is my first virtual speech, let me thank all those in the House staff who have gone out of their way to make the virtual House of Commons work and allow colleagues to hold the British Government to account. That includes Mr Speaker, you Madam Deputy Speaker and your fellow Deputy Speakers. Having spent considerable time on a committee with the Leader of the House, the irony of its being this particular Leader of the House who is proving that remote participation and eventually electronic voting can work, is certainly not lost on me.
Regarding the regulations, it is a pleasure to be able to respond on behalf of the SNP. Colleagues will be relieved that I do not intend to speak for very long. The business before us is uncontentious. We of course welcome an increase in employment allowance, but would have liked to have seen it go further. That is not an opportunistic position that we take for the afternoon to nit-pick or find division where there is none; our manifesto committed us to an increase in the employment allowance from £3,000 to £6,000 per employer, per year. Of course, that was the manifesto that helped the SNP win 80% of the seats we contested in December’s general election.
I welcome the shadow Minister to his place on the Opposition Front Bench. Like him, I encourage the UK Government to do more to assist small employers across the UK during the covid-19 crisis. The job retention scheme and business support schemes have massive gaps that so many of our constituents are falling through, and that is before we get on to the unsatisfactory self-employment scheme. I share the calls from the shadow Minister on bringing about flexibility to the furlough scheme. Something I would like to see on top of what he called for would be an appeals process, where an employer refusing to furlough a member of staff, leaving them without an income, can be challenged. The CBIL scheme is also not helping all those who need support. For many, incurring debt is just not an option. There needs to be much more in the way of grants available. Similarly, not all charities are covered in the third sector scheme, such as research-based charities, so I hope they will look at those areas again.
Short of the full powers of independence, we want the UK Government to devolve control of national insurance to Holyrood, so that the Scottish Government can use economic levers such as these measures to make decisions that support employers to create jobs. At the moment, our control over economic policy is very limited and largely rests with the UK Government, who take decisions that may favour other parts of the UK and may not be in Scotland’s best interests.
We will also continue to oppose the UK Government’s decision to restrict eligibility for employment allowance. In our view, it should cover all firms and all employers. The UK Government estimate that about 7% of all employers will no longer be eligible for the employment allowance. By removing this relief, they will be levying an additional £3,000 in tax on those employers.
In conclusion, we will not be forcing the regulations to a Division—I am sure that that will please those still testing remote electronic voting—but we would have liked the UK Government to have been more ambitious to support job creation by halting the eligibility restrictions and by expanding the relief that is available.
Madam Deputy Speaker (Dame Rosie Winterton)
I am now introducing a time limit of five minutes. I advise hon. Members who are speaking virtually to have a timing device visible. I call Kim Johnson.
Kim Johnson (Liverpool, Riverside) (Lab) [V]
Thank you, Madam Deputy Speaker. I welcome the opportunity to contribute to the debate on the increase in employment allowance. Labour recognises that many businesses are facing severe difficulties at the moment and the proposed changes go some way to providing assistance to many struggling small and medium-sized enterprises.
The economic decisions we take now will determine the length of the recession we face going forward. The Government have provided a number of economic packages to support SMEs, many of which have just weeks of cash in reserve. The additional assistance will increase the maximum amount of employment allowance from £3,000 to £4,000 for the tax year 2020-21, which is expected to reduce about 65,000 businesses’ national insurance contributions bill to nil.
My constituency of Liverpool, Riverside covers the city centre, with thousands of SMEs working across a number of sectors, including 4,500 digital and creative industries that employ 22,000 people and contribute £1.8 billion gross value added to the local economy. We are one of the fastest growing hubs in the country for digital companies, devising solutions for all sectors, including the health sector. The vast majority are micro-businesses, and many of them have been supported by our regional Federation of Small Businesses, which has consistently championed raising the employment allowance. It was a central ask in its “Back to Business” manifesto for the 2019 general election, supporting small businesses to cope with the increases in the national living wage. It will also assist half a million SMEs, raise wages and keep more people in work.
I have received a high volume of emails from businesses that are unable to access the support that has been made available. The funding is there to be used to ensure that we have a strong and robust economy to bounce back once restrictions are eased. It also needs to be lasting, as we head into the next phase of the pandemic, with micro-businesses in particular looking to recover. I believe that some businesses are falling through the cracks, and the increase in the employment allowance will be of limited assistance to the many SMEs struggling to keep afloat during the covid-19 pandemic. While I welcome this statutory instrument to increase the employment allowance, I call on the Government to go further—to provide SMEs with the support they need to weather this crisis, and to investigate concerns about HMRC’s ability to tackle tax avoidance effectively following tax office closures.
Sarah Olney (Richmond Park) (LD) [V]
Madam Deputy Speaker, it is a pleasure to be making my digital debut under your chairmanship this afternoon.
I welcome the change in employment allowance that the Minister has announced. It will obviously come as a massive boost to small businesses at this incredibly difficult time. I want to take the opportunity to raise the case of some of the groups, which have been contacting me, that have been missed out in the Government’s plans of support during the coronavirus crisis. I welcome the Government’s overall objective to support employment and people’s household incomes during this time, but I think it is important to note that there are some groups that have been missed out.
The priority at this time should be support for the self-employed, particularly small limited companies in which individuals pay themselves by dividends. They have been cut off from all sources of support. I also have a lot of our constituents on regular short-term contracts—they go from contract to contract—who are paid through pay-as-you-earn, and they cannot take advantage of the furlough scheme, welcome as it is. I would like to hear more about the Government’s plans for them.
I have been contacted by a lot of new starters who started jobs after 28 February and were not on their current company’s payroll scheme at that time, so they have missed out on furlough. There are also the businesses that have been set up in the most recent tax year, which do not have turnover that they can demonstrate. I also have a lot of constituents whose average earnings have been more than £50,000, so they have missed out on self-employment schemes. I really want to hear more from the Government about what they are going to do to support those businesses and self-employed individuals, who have been working very hard to support their families and are now finding themselves in a really desperate situation.
I want to support what the hon. Member for Ilford North (Wes Streeting) said about the job retention scheme. It is so important as the Government look at their furlough scheme, and obviously they will be reviewing it. What I want to call for is not just to extend it beyond June, but to make it more flexible so that businesses can furlough part of an employee—they could bring employees in for two days and furlough them for three days. It is going to be so important to businesses to have such flexibility as we emerge from the coronavirus crisis. I want to make that call today to the Government, as they are reviewing the situation, to support those entrepreneurs who are going to be leading us out of this economic crisis and those people who are going to innovate to enable the changes we need to build a better society as we seek to move forward.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP) [V]
I am grateful for the opportunity to contribute today on a matter that affects many charities, small companies and amateur clubs across my constituency and across Scotland. I place on record that I fully embrace these virtual proceedings, allowing us to look after the interests of our constituencies. The credit of course goes to the staff and officials behind the scenes who are pulling this all together for us.
I am speaking broadly in support of the motion as we in the SNP welcome an increase in the employment allowance. It is our desire to ensure that companies have the confidence to increase their workforce in what are uncertain times. However, I would like to have seen the increase go further still, and we will continue to oppose the UK Government’s restrictions on employment allowance eligibility, which particularly hamper single-employee companies in my constituency. We back a rise in the employment allowance, but we also want a policy that covers all firms and organisations, such as the many charitable organisations, amateur sports clubs and companies right across my constituency and Scotland to which this allowance makes a real difference each and every year.
The increase in the maximum allowance of £4,000 a year is an improvement, and it is welcome, but we would like to see this increase further. Our election manifesto called for an increase to £6,000 a year. This was before the crisis that many organisations now face. The reality is that many of them may not survive to avail themselves of this allowance. The UK Government have also estimated that around 7% of all businesses will no longer be eligible. Removing this relief will cost affected employers up to an extra £3,000 per tax year.
Overarching all this, the SNP wants the UK Government to devolve control of national insurance to the Scottish Parliament, allowing us to make our own decisions on a tax that directly impacts our employers’ ability to afford to create the new jobs that we need here in my constituency and all across Scotland. We support the measure and will not divide the House on this, but it could have gone further.
Layla Moran (Oxford West and Abingdon) (LD) [V]
The increase in the employment allowance is of course a welcome step from the Government, but the new restrictions on eligibility for the allowance introduced in April are a real cause for concern for small businesses and charities in Oxford West and Abingdon, which are already struggling to cope during this economic crisis. We need to assess this allowance increase in that context and, in any case, the Government need to go further if this relief is going to have any real impact. And there is an elephant in the room that needs to be addressed: the ongoing plight of the self-employed.
The limitations introduced on the employment allowance last month, most notably the restriction of eligibility to those with secondary class 1 national insurance contribution liabilities of under £100,000, unfairly disadvantages charities. In many ways, this negates the positive increase in the allowance amount altogether. Many larger charities, fearful of having to close due to a lack of financial support—such as the Children’s Air Ambulance in my constituency—may now be unable to claim this relief. Four thousand pounds may seem small fry, compared with the scale of the problems many are facing, but believe me, as they say, every little helps right now. That is why the Liberal Democrats are also calling for a dedicated grant for charities during this crisis.
There are charities in the care sector as well that I am concerned about. I spoke to many care homes in my constituency last Friday and they have urgent funding issues that need to be resolved, because they often have a disproportionately high employment spend compared with similarly sized SMEs, and they are at a disadvantage under these new rules. Now that the relief provided by the employment allowance needs to be counted by charities towards the state aid received, it is clear that more needs to be done. Will the Minister tell the House what is being done to fund charities properly at this time and what further relief might be available through the employment allowance?
To turn back to SMEs, for small businesses right now this increase in the employment allowance is of course welcome, but it is insignificant compared with the severe difficulties many find themselves in at the moment. I was on a Zoom call with a number of them right at the beginning of this crisis. They have been one week away from closure for many weeks and now is not the time to restrict which employers can access the employment allowance. It strikes me that the opportunity to temporarily relax those restrictions has been missed in this and any other statutory instrument to fix that.
With many businesses unable to operate right now, or operating from people’s homes, the Government need to make sure that they are covered by that allowance too.
I would like to take this opportunity to talk again about the self-employed. They are ineligible for the employment allowance because they pay class 2 and class 4 national insurance contributions. Time and again, the Government have thought about contractors and freelancers second, leaving them in the lurch or falling through cracks. I urge the Minister to investigate whether the employment allowance could be extended—even temporarily—to the self-employed, to provide some financial relief during this crisis.
We need to look at the statutory instrument in the whole context, not just within the limitations placed on the employment allowance. For charities, small businesses and freelancers alike, there is so much more that could be done to make the employment allowance and other relief measures go further. I thank the Government for what they have done, but I beg them to continue to go further.
Tim Farron (Westmorland and Lonsdale) (LD) [V]
The employment allowance, of course, was born during the years of the coalition to help small businesses, charities and sports clubs to take on their first employees. The Liberal Democrats are proud of our legacy and commitment to understanding and meeting the needs of entrepreneurs and small businesses. This has never been more important than it is now, so the increase is a welcome development and we are very happy to support it. However, it will be of use only to those businesses that are able to stay in business. Our challenge is to ensure that small businesses and charities are able to stay afloat until we are out of lockdown, so that they can benefit from it. That is not a call to end or ease the lockdown soon; we have to be led by science and safety, not politics and impatience. My fear, though, is that the increase in the allowance could end up being the cherry on a cake that no longer exists. Put bluntly, it will be of no use to businesses that have gone to the wall.
The allowance increase, sadly, will have escaped the attention of many, given that it arrived just as the economy went into shock in the face of the covid-19 crisis. Here in the south lakes, that shock is being felt acutely. We are a community where volunteering is second nature, where small charities, community groups and sports clubs form the glue that binds us together, but for most, their income has disappeared, and Government support has not reached everyone. We are a community where one in four people work for themselves, hundreds of them new start-ups. Small employers, new employers and potential employers are the very people the employment allowance is there to help, and most of them have been closed or curtailed by the virus.
We claim to be the biggest visitor destination in the UK outside London, but the market squares, pubs, restaurants and hotels of the lakes and dales are still and silent. It is right that they are; we all know that the priority is to protect people, to save lives. The problem is that if hospitality and tourism are phased back into action in the autumn, the industry will have missed out on the business of the summer months that it relies on to get through the winter. If we do not provide long-term support for those businesses, we will be faced with tens of thousands of furloughed workers losing their jobs as soon as support ends. That will have a colossal impact on our communities in the south lakes and will push countless families into poverty.
I hope that Ministers share my determination to ensure that we keep businesses going now, so that employers are able to re-hire furloughed staff and to employ new staff after this is all over. For those in the tourism and hospitality business, that must mean committing to a 12-month funding settlement, to see them through to spring 2021. Anything less, and we will simply be delaying the collapse of hundreds of businesses until the autumn. I want those employers to be around to benefit from the raised employment allowance.
If you could live in a beautiful place like Cumbria and make a living, you just would. Well, thanks to improved broadband speeds, increasing numbers of people have done just that. We are one of the most entrepreneurial places in the country. Hundreds of people have set up their businesses here, underpinning our local communities. There has been an explosion in the number of new businesses based in spare bedrooms, on kitchen tables, in sheds or shared spaces. Often, these businesses do not expect to make much money—if any—in the first year or two; many work at a loss until the third or fourth year. Those are the very businesses that, until now, have not qualified for any support from Government during this crisis—those self-employed for less than a year, those working in shared spaces and those who work from home. Small B&Bs have also missed out. Many of these businesses have already had to close, leaving people’s dreams shattered and families experiencing desperate hardship and even destitution.
The announcement last weekend of a £617 million package for those who have fallen through the cracks is welcome, and I am grateful to Ministers for listening to us. But I confess that the details of this fund trouble me and my constituents. South Lakeland has such a large number of businesses hit, because of our reliance on tourism and hospitality, that the local council has distributed one of the largest hardship budgets in the country—£70 million, which is much more than places like Newcastle and Nottingham, with populations of three times our size. If this new money is divided out according to the size of population, South Lakeland will get about £2 million, which would leave hundreds of businesses with absolutely nothing. This announcement would, in that case, have given false hope.
I ask the Government to distribute on the basis of need and be willing to increase the sum available across the country if it turns out that people are missing out. I also ask for clarity on which businesses will be eligible for this support. For example, will it include those who are operating from home? I warmly welcome these regulations. We must do everything in our power to ensure that small employers survive this crisis, so that they are still around to use this money and create opportunities for others.
Jim Shannon (Strangford) (DUP) [V]
I very much welcome the Minister’s announcement today and the Government’s commitment to it. I thank you, Madam Deputy Speaker, for giving me the opportunity to speak.
Initially, the employment allowance was set at £2,000 but was increased to £3,000 from April 2016. From April 2020, the allowance may only be claimed by employers with employers’ national insurance contributions of below £100,000 in the previous tax year, a change announced in 2018. HMRC estimates that the annual cost of the allowance is around £2.2 billion.
I absolutely understand the reason for the inclusion of this measure in the Conservative party manifesto and the Minister’s announcement today, but I am a wee bit concerned that we need to be doing more to help the small and medium-sized businesses that continue to employ large numbers of people across my constituency and the whole United Kingdom of Great Britain and Northern Ireland. In my constituency and across Northern Ireland, we probably have a higher per capita percentage of small and medium-sized businesses than the rest of the United Kingdom. I welcome this measure, but we need to ensure that these small and medium-sized businesses are able to return to the position they were in, so that they can give the opportunity of employment and wages and give the economy a bit of a kick-start.
I want to say an incredibly large thank you to Frances and her staff at my local social security office, who have helped many people and given advice during this crisis. It is important that their hands are not tied by a system that understands the rules but has no discretion to understand individual circumstances.
I welcome the help that will be coming for the many charities that we and many others contribute to. I think of the National Society for the Prevention of Cruelty to Children, Cancer Care, Marie Curie, St John Ambulance and the Cancer Fund for Children here in Northern Ireland. All those charities have no or little fund raising at the moment. The moneys coming into them are direct donations. There may be other moneys coming in, but there is no fund raising taking place. The help that the Government have offered charities is very welcome, but it will never bridge the gap for the incredibly large amounts of money that they are losing.
I was very happy with the Chancellor’s decision to allow workers to be furloughed, although there will be no payment until June for the self-employed. I think also of self-employed directors—I asked the Secretary of State for Work and Pensions a question about this yesterday, and I raise it again now—who put their profits back into the business, so do not have much in the way of savings. Unfortunately, they do not get the real benefits here that they could.
I put on record my thanks to the Government and to Ministers for all that they have done. They have reached out to many people. As elected representatives, we are made aware with each passing day of others who perhaps do not tick the box—who do not fit into a certain category—and I am thinking of them. We therefore bring those people to the attention of Ministers whenever the opportunity arises.
Many of us will be in receipt of a paper from Ian Geary of the Salvation Army referring to the report that has already been mentioned, entitled “Understanding Benefits and Mental Health”. We cannot let this go by without reflecting—in a small way for this debate but in a big way for the individuals themselves—on the barriers that vulnerable groups experience, and on some of the multiple mental health challenges that they are facing. That paper emphasised that the aforementioned findings were collated before the current crisis, but it has highlighted the lack of resilience experienced by many people who need help at this moment.
Again, I welcome the provisions that we have today, which benefit the many who fall within the criteria, but there are others who perhaps fall just outside the criteria or outside the box-ticking exercise that Departments sometimes do. We need to identify and support vulnerable claimants. We need to help those with mental health issues. We need to support businesses and those self-employed people who cannot create the opportunity—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I thank the hon. Gentleman for his speech but we now have to move on to the Minister.
Jesse Norman
I thank all Members who have contributed to this very constructive debate for their support on this important measure.
I agree, in some respects, with the hon. Member for Ilford North (Wes Streeting) that there is a degree of unreality about this. Of course, as he will know, this measure legislates for change that is already in operation as from the Budget, and therefore does not reflect, is not designed to reflect, and cannot, in fact, in law reflect all the changes that have happened since then. I think he will also be aware that we have had several Budgets- worth of additional measures since then from the Treasury and from across Government.
It is worth saying that the air of unreality that the hon. Gentleman describes can also, in some respects, apply to some of the points that have been made in the debate. It vaguely reminds one of the famous “Monty Python” sketch, “What have the Romans ever done for us?” Well, at the moment we have the coronavirus jobs retention scheme, the business interruption loan scheme, the self-employment scheme, statutory sickness pay, £750 million of charity support, grants, tax reliefs, billions of pounds to local authorities, and HMRC’s “time to pay” arrangement. That is an astonishing array of different packages. Of course, there may be people who are not, or not yet, able to benefit from them, or to benefit as much as they would like, but I think that everyone will be able to benefit from them in some regard, because that is how they are designed.
The hon. Gentleman mentioned the social investment tax relief. As he will be aware, we have consulted on that. Interestingly, I have talked to some of the social investment tax relief organisations involved, and they concede that so far the relief has not been effective, so the question is really whether it would be more effective if it were continued. Of course, the Treasury continues to reflect on that matter, as it does with all taxes.
I share the view of the hon. Member for Airdrie and Shotts (Neil Gray) that we have had constructive interactions in the past, and I thank him very much for his speech. He asked whether the employment allowance could be extended to cover all employees; I think I am right in saying that 93% of all businesses, including those owned and run by charities, remain eligible for the employment allowance, so it is extremely comprehensive. The restriction to smaller companies reflects the point that £4,000 is a substantial amount for small and micro- businesses but not for much larger businesses with national insurance contributions payments of more than £100,000 a year.
The hon. Member for Richmond Park (Sarah Olney) asked about the self-employed and dividends. She will be aware that dividends are a payment in return to capital ownership of a company, rather than as a matter of wages. Because of that, there is no available information as to who benefits and by how much and there is no clarity as to whether the dividends are in fact a form of wages or may have come from other activities of the business. It is of course right to focus on the issue if that is what her constituents are pressing her on, and we continue to think about the point.
The hon. Lady mentioned the £50,000 threshold for the self-employed; I think I am right in saying that on average, according to Her Majesty’s Revenue and Customs, a self-employed business has to have had £200,000 of revenue in order to have £50,000-worth of profit, so in most instances we are not talking about the most vulnerable people in society, who make up the groups that we are very much focused on assisting to the extent that we possibly can.
The hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar) asked about devolution. As he will be aware, the Smith commission made a clear recommendation that national insurance contributions should remain reserved. National insurance is, of course, a social security contribution, so there would be many interactions with entitlement to benefits and other impacts across other businesses and individuals. The UK Government have delivered on their promise to devolve increased income tax powers to Scotland; it remains up to the Scottish Government to decide what to do with their own tax policy, and they have begun measures—be it said not enormously wide-ranging ones—to change tax policy.
The hon. Member for Oxford West and Abingdon (Layla Moran) made a point about charities. As I have suggested, the employment allowance covers an overwhelmingly large 93% of the businesses to which it is potentially applicable.
The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about a 12-month funding settlement. As the Chancellor has acknowledged, in terms of the public purse the present situation is not sustainable. It is not a situation that people should want to sustain, not least because it may in due course have counterproductive economic effects. We in the Treasury, and across Government, are reflecting very hard on how we can emerge from this lockdown stronger and more unified as a country than ever. With that said, I commend the regulations to the House.
Question put and agreed to.
Resolved,
That the Employment Allowance (Increase of Maximum Amount) Regulations 2020 (S.I., 2020, No. 273), dated 11 March 2020, a copy of which was laid before this House on 10 March, be approved.
Adjournment
Written Statements
NHS Covid-19 App
(4 years, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Health and Social Care (Matt Hancock)
Yesterday we launched the NHS covid-19 app (“the app”) for initial roll-out on the Isle of Wight over the next two weeks.
This is the first phase in the development and roll-out of a national “test and trace” programme which will bring together the app, expanded web and phone-based contact tracing, and swab testing for those with potential covid-19 symptoms. This is a vital part of our plans as we move towards the second phase in our battle against covid-19.
The app has been built by a team including world-leading doctors, scientists and tech experts. If someone installs the app, it will start logging the distance between their phone and other phones nearby that also have the app installed. If a person becomes unwell with symptoms of covid-19, they can report this through the app, which will then anonymously alert other app users that they have come into significant contact with over the previous few days and provide appropriate advice. The app, which takes full consideration of privacy and security, has already been tested in closed conditions at an RAF base.
This initial roll-out will provide valuable insights into how the public respond to and use the app and how we can improve it further. There will be no changes to social distancing measures during this initial roll-out phase.
Using the app is voluntary but the more residents who download the app, the more informed our national response will be. The Isle of Wight is leading the way for the UK, for which we thank them.
The more rapidly we can identify people at risk of infection and provide them with advice on what action they should take, the more effectively we can reduce the spread of the virus. The test and trace programme will play an increasingly important part in our wider strategy to save lives and protect the health and care system.
Further details of the national roll-out will be available soon.
[HCWS222]
Biometrics and Forensics Ethics Group: Annual Report
(4 years, 6 months ago)
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The Minister for Crime and Policing (Kit Malthouse)
My noble Friend the Minister of State, Home Office (Baroness Williams of Trafford) has today made the following written statement:
Today I am pleased to announce the publication of the second annual report of the Biometrics and Forensic Ethics Group. The group provides Ministers with independent advice on matters relating to data ethics and ethical issues in forensic science and biometrics.
I would like to thank the group for its strategic advice concerning the use and retention of biometric identifiers and for its advice on the development and testing of new biometric technologies.
The group has made four recommendations covering the testing and use of live facial recognition technologies by police forces; the design and implementation of data privacy impact assessments with the Home Office; and the use of familial DNA analysis results in assessing the value of genetic genealogy techniques for law enforcement.
In addition, the group continues to recommend a review of biometric retention and deletion schedules, particularly regarding custody images.
The Biometrics and Forensics Ethics Group annual report can be viewed on the website of the group at: https://www. gov.uk/government/organisations/biometrics-and-forensics-ethics-group and a copy will be placed in the Libraries of both Houses.
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House of Lords
Arrangement of Business
The Lord Speaker (Lord Fowler)
My Lords, today all our proceedings will be conducted virtually and will be available to broadcasters. We will have four Oral Questions and a Private Notice Question, a debate on the economy, two debates on secondary legislation, and a Statement on Covid-19 and the response to it.
As a matter of interest, I am chairing proceedings from my home in the Isle of Wight—the location chosen as the national pilot for the new NHS contact-tracing app. I wish it every success.
Virtual Proceedings of the House will now begin. I remind Members that these proceedings are subject to parliamentary privilege and that what we say is available to the public both in Hansard and to those listening and watching. Members’ microphones will initially be set to mute, and the broadcasting team will unmute their microphones shortly before we reach their place in the speakers’ list. When Members have finished speaking, their microphones will again be set to mute.
Retirements of Members
The Lord Speaker (Lord Fowler)
My Lords, I should like to notify the House of the retirements with effect from 1 May of the noble Countess, Lady Mar, and with effect from 5 May of the noble Baroness, Lady Byford, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I should like to express our best wishes and thanks to the noble Countess and the noble Baroness for their much-valued service to the House.
Arrangement of Business
The Lord Speaker (Lord Fowler)
My Lords, the Virtual Proceedings on Oral Questions will now commence. I will call each Oral Question in the normal way and supplementary questions will be asked in the order shown on the speakers’ list. Will noble Lords please ensure that questions and answers are short? Each speaker’s microphone will be unmuted prior to them asking a supplementary question and will be returned to mute once their supplementary question has finished. I call the noble Baroness, Lady Jones of Moulsecoomb, to ask the first Oral Question.
Policing: Covid-19 Guidance and Legislation
(4 years, 6 months ago)
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Baroness Jones of Moulsecoomb
To ask Her Majesty’s Government what assessment they have made of (1) any inconsistencies between COVID-19-related guidance and legislation, and (2) the impact of any such inconsistencies on police interactions with members of the public.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the UK is facing its biggest crisis since the Second World War. We have taken unprecedented steps to curtail people’s freedom in order to protect the NHS and to save lives. We have worked with the police to issue guidance on the new powers and to ensure that they are used proportionately and consistently. I am confident that the police have applied these measures properly and have risen to this challenge.
Baroness Jones of Moulsecoomb (GP)
I thank the noble Baroness for her Answer to my Question. I am sure that she is aware that the guidance has been extremely confusing: it has confused the public, the police and prosecutors. The Crown Prosecution Service has now said that it will review all the prosecutions, including those of the people who pleaded guilty. Does the Minister agree that there is a mess somewhere to clear up?
Baroness Williams of Trafford
It is right that the CPS reviews what are new powers to protect the NHS and to save lives. However, it is also crucial that we learn from any mistakes. Therefore, the CPS is reviewing cases charged under both the Coronavirus Act and public health regulations to make sure that the powers are being applied correctly. As I say, these are exceptional powers and the CPS is continually reviewing all the charges brought.
Lord Adonis (Lab)
My Lords, we are completely behind the police, the Minister and her department in trying to strike the right balance in this very difficult area. Does she agree that access to public parks is a real issue at the moment? For many people, particularly those who do not have a garden, being able to get into public parks is vital. That includes being able to sit in them, properly distanced, and move around them freely. That has not been happening in many parts, because the police have been moving people on. Might the Minister be able to look at this issue, which is really important to millions of people across the country?
Baroness Williams of Trafford
I totally agree with the noble Lord that public parks are absolutely vital to people, not just so that they can get exercise but for their mental well-being. I did a test run in my local park in London this morning, and people were observing social distancing. The issue arises when people linger; it has concerned the police that they might be passing on infection. It is really important that we follow the regulations to save lives and protect the NHS.
Lord Beith (LD)
My Lords, it is perfectly reasonable that the Government should urge people to go beyond the letter of the law in this crisis, but is it not vital not to confuse guidance with the law itself? For example, there is no law that precludes going out in a car to take exercise in a more suitable place or limits exercise in England to once a day. Does the Minister accept that, from Ministers to police constables, people exercising authority must distinguish clearly between what the law requires and what is simply guidance? Otherwise, habits that would be damaging to our freedom and liberty will persist beyond this dreadful epidemic.
Baroness Williams of Trafford
I totally agree with the noble Lord. He has pointed out very clearly the distinction between the guidance and the regulations. We need to be mindful of that.
Baroness Rawlings (Con)
My Lords, taking into account the inconsistencies between Covid-19 and related guidance, it is reported that both SARS and Covid-19 probably came from bats. They seem to store many more bat-borne viruses. What is HMG’s policy, therefore, on bats continuing to be protected in this country? Why are they protected? In the circumstances, should the amended 1981 law be revisited?
Baroness Williams of Trafford
The reason for that protection was the shortage of bats in Europe. We have been working closely with the Bat Conservation Trust, Defra and Natural England’s wildlife teams and international partners on this subject. The BCT has provided advice for bat carers, which we helped to write and which takes a precautionary approach.
Lord Carlile of Berriew (CB)
Does the Minister agree that the Director of Public Prosecutions’ very unusual decision to review every single Covid-related prosecution initiated by the police indicates clear overuse of the powers and that new National Police Chiefs’ Council guidance is needed to replace the overcomplex guidance issued by the College of Policing, which many police officers do not even have time to read?
Baroness Williams of Trafford
The College of Policing guidance is there not to replace the government guidance but to assist the police as they go about their daily work. As I said to the noble Baroness, Lady Jones, these are new powers and the CPS is therefore reviewing cases charged under both the Coronavirus Act and the public health regulations to make sure that the powers are being applied correctly. Unlawful charges are being withdrawn by prosecutors in court and the CPS is asking for any wrongful convictions to be overturned—but we are in a new world and are having to learn.
Lord Rosser (Lab)
For the Opposition, I say that the police have our wholehearted support for the work that they do, particularly in the very difficult current circumstances. As a result of rushed public health regulations and associated guidelines, there have been inevitable instances of differences in interpretation of the Covid-19 guidelines. Were the guidelines cleared or approved by the Home Office? Were they cleared or approved by elected and accountable police and crime commissioners? What are the powers of elected and accountable police and crime commissioners to determine how the wide-ranging non-statutory guidelines should be applied by their police force to the constituents who elected them?
Baroness Williams of Trafford
There are many questions in the noble Lord’s question. I would say that, in the enforcement of the new emergency regulations, there were definitely some initial inconsistencies among police forces. As I said in response to other noble Lords, that is because we are in an unprecedented situation and have all been operating at a fast pace to keep the public safe. We are now confident that the police are applying the new measures properly and proportionately. They are using the four-step escalation principles of engage, explain, encourage and then enforce. On the point about engagement with the guidance, the Government are engaging with the various stakeholders when drawing it up.
Baroness Ludford (LD)
In response to my noble friend Lord Beith, the Minister said that we should be mindful of the need not to confuse law and guidance. However, is it not a fact that government ministerial Statements and publications have elided and thus confused the two, which has often put the police in an invidious position? I see that while the Coronavirus Outbreak FAQs were revised on 1 May, they still seem to interchange between what you cannot do and what you should not do. Will the Government now clearly distinguish between the two to make life easier for the public and, indeed, for the police?
Baroness Williams of Trafford
The noble Baroness’s noble friend Lord Beith helpfully distinguished between the two. The regulations are drafted in a way that draws a distinction between them and the guidance. The regulations are the law and the law is what applies. They set out the legal obligations and the guidance sets out best practice to assist in compliance with the law. While examples of inconsistencies have been reported in the press, given that 86% of the public are complying with the law and 70% support what the police are doing, I think that we are going in the right direction.
Lord Harris of Haringey (Lab)
My Lords, I refer to my interests as set out in the register. Policing by consent is the foundation of policing in this country. If interactions with the public are heavy-handed or disproportionate when dealing with Covid-19 issues, there is a real danger that support for policing will be jeopardised. The police are now themselves saying that this will become more difficult as the lockdown messages become more nuanced. Does the Minister agree that local police commanders should consult at least weekly, if not more frequently, with local MPs and council leaders about which issues of social distancing and the like are arising locally and what the appropriate response should be in that locality?
Baroness Williams of Trafford
I hope the noble Lord will be comforted by the fact that every single day I join the Home Secretary on operational calls to not only the Met police but other law enforcement agencies. We also speak each day to a regional lead. I hope this will reassure him that we are doing just that and that we remain engaged with local law enforcement as we go through a very difficult process.
The Lord Speaker (Lord Fowler)
My Lords, I regret that the time allowed for this Question has elapsed. If we can keep the questions and answers a little shorter, we will be able to get more questioners in.
Self-employment Income Support Scheme
(4 years, 6 months ago)
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Baroness Bonham-Carter of Yarnbury
To ask Her Majesty’s Government what steps they are taking to ensure that freelance workers can access adequate funds through the welfare system until payments under the COVID-19 Self-employment Income Support Scheme begin.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, we have temporarily relaxed the application of the minimum income floor for all self-employed universal credit claimants affected by Covid-19. A drop in earnings will therefore be directly reflected in a claimant’s award, enabling them to follow the PHE guidance on social distancing. Claimants may also benefit from other changes, including the £20 increase in the universal credit standard allowance and the increases to local housing allowance.
Baroness Bonham-Carter of Yarnbury (LD)
I declare an interest as a trustee of the Lowry and One Dance UK. We are very concerned about the ability of freelancers to access adequate funds until support is made available in June. Our all-important creative industries are a sector hit particularly hard; one-third of people in this sector are freelance and some are ineligible for any of the Government’s schemes. Will the Minister consider a rapid interim fund or grant to bridge the income gap for those affected and, as the Federation of Entertainment Unions suggests, a new freelance worker income support scheme for those falling through the cracks?
Lord Callanan
I apologise to the noble Baroness; she was breaking up so I did not quite catch all of her question. However, I think she was talking about the creative industries. Work in these industries is treated in the same way for universal credit as all other forms of self-employed work. We are aware that many who are self-employed—particularly those whose earnings are seasonal and often fluctuate from month to month—need to budget and plan for this; universal credit takes account of that by varying its payments from month to month.
Lord Empey (UUP)
My noble friend the Minister will be aware of people moving from PAYE employment, perhaps to start a new business or to become self-employed. These people have become caught between two stools. Does the Minister realise that the thresholds for universal credit mean that savings that people may have accumulated to start their new business will in large measure have to be spent before they can qualify for universal credit? Will he be prepared to review the threshold operation in these unique circumstances?
Lord Callanan
I understand the point that my noble friend is making, but a key principle is that universal credit should go only to people who do not have assets available to meet their basic needs. It is important to protect the incentive to save. However, any assets used wholly or mainly for the purpose of a claimant’s trade or profession are disregarded indefinitely while the business is still operating. Any money that may be in their account to be used for business purposes will also not be counted towards the capital allowance.
Baroness Fookes (Con)
Can my noble friend the Minister reassure those who may be concerned about whether universal credit payments made will have to be repaid once the new scheme is up and running?
Lord Callanan
DWP officials are in discussion with those in other government departments about the detail of these varied schemes and grants. However, we expect to treat these SEISS payments as employed earnings, and to take them into account when they are received; therefore we do not expect to adjust previous awards.
Baroness Coussins (CB)
My Lords, will the Government consider setting up a dedicated interim hardship fund to provide immediate cash support to people who could be waiting until June for their payments from the income support scheme and are not eligible to claim universal credit? I declare my interest as president of the Money Advice Trust, the charity that runs Business Debtline. It has heard from many self-employed people in this situation who are struggling to make ends meet; some are not eligible for the income support scheme at all.
Lord Callanan
The Government are focusing on support measures that can be implemented as quickly as possible. Using existing frameworks for those who need additional support is, in our view, the quickest and most effective way to do this during the Covid-19 outbreak. The DWP is continuing to work with the Treasury and other government departments to monitor the evolving economic and labour market situation to identify the most effective way to help people in need as quickly as possible.
Baroness Healy of Primrose Hill (Lab)
Many freelance journalists are ineligible for the government schemes and the requirements exclude those in their first year of being self-employed. Does the Minister agree that it is unfair to penalise those just starting out in their careers or forced into self-employment through redundancy and casualisation?
Lord Callanan
Of course, we want to help as many people as possible under these schemes, and we keep them constantly under review. All these various schemes have been implemented as quickly as possible, so we will certainly reflect closely on what the noble Baroness has said.
Baroness Janke (LD)
What advice would the Minister give to a self-employed decorator who has been out of work since the lockdown started and who applied for universal credit? After being made to feel, in his words, a “scrounging piece of scum”, he and his wife have found that, after rent and council tax, they have just £210 a month to pay for food and all other expenses.
Lord Callanan
It is difficult to comment on the case that the noble Baroness cites without seeing all the details of the claimant responsible, but the SEIS scheme will offer millions of self-employed individuals direct cash grants. It covers 95% of people who receive the majority of their income from self-employment, and we have quickly and effectively introduced over £6.5 billion-worth of measures to benefit those facing the most severe financial disruption.
Lord Farmer (Con)
My Lords, it is pleasing that the Government have relaxed the minimum income floor for the self-employed. Can my noble friend the Minister clarify any further measures that have been made to help self-employed claimants at this time?
Lord Callanan
I thank my noble friend for his question. Yes, as well as relaxing the minimum income floor, we have increased the standard rate of universal credit and working tax credit for this year by around £1,000. We have increased the local housing allowance, which is worth something like £600 in people’s pockets. We have also redeployed staff to the front line and therefore temporarily suspended the recovery of some government debts such as tax credits, benefit overpayments and social fund loans. We stand ready to take additional measures if they are required.
Viscount Colville of Culross (CB)
I declare an interest as a freelance series producer working for Netflix and the Smithsonian Channel. The current SEISS creates considerable concern for large numbers of freelancers who operate under a personal services company and are therefore not covered. Is it not possible for HMRC to distinguish between PSC-derived dividends and other dividend income, which could be verified through an online HMRC portal?
Lord Callanan
The Chancellor has referred to this difficulty a number of times. We are satisfied that the system as it currently operates is the best one at the moment, but as I said in response to an earlier question, we keep all these things constantly under review and will reflect on what the noble Viscount has said.
Lord Hunt of Kings Heath (Lab)
My Lords, does the Minister at least accept that many self-employed and freelance people are falling through the net because of the criteria that the Government have set? Will he reconsider his answer to the noble Baroness, Lady Coussins? The Money Advice Trust is getting so many self-employed people calling in who are desperate because they do not meet the criteria. It is surely an excellent idea to have a hardship fund administered by local authorities to help them out.
Lord Callanan
We already have a number of schemes in place. The SEISS will benefit something like 95% of all claimants, but of course such schemes have been introduced at pace. Officials are still working on it, and I and the department will reflect closely on what the noble Lord has said. We want to ensure that as many people as possible are helped during these difficult times.
Baroness Altmann (Con)
My Lords, I congratulate the Government on their unprecedented rescue schemes for the self-employed and freelancers. I understand that one may be paid out before June—within May. Can my noble friend outline any other measures planned for the employed and the self-employed which are under consideration?
Lord Callanan
I referred to some additional measures in the answer that I gave to my noble friend Lord Empey earlier. We have been taking a number of other measures; I can tell my noble friend that, yesterday, HMRC began contacting customers who are eligible for the SEISS. It remains on target to be delivered in early June but, if we possibly can, we will of course get the payments out earlier because we know that they are urgently required in many situations.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has, I fear, elapsed, and we now come to the third Oral Question.
Domestic Violence
(4 years, 6 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what measures they are taking to address incidents of domestic violence during the COVID-19 pandemic.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the Government are monitoring and responding to domestic abuse issues arising during this period, and £28 million of the £750 million announced by the Treasury for charities will go to domestic abuse charities to help victims to continue to access their services. The Home Office has separately provided £2 million to support helpline and website provision, and the recently launched #YouAreNotAlone campaign is helping to raise awareness of this crime while directing victims to support services.
Lord Kennedy of Southwark (Lab Co-op)
We all look forward to the Domestic Abuse Bill becoming law, but that will not be for several months. Victims of domestic abuse need additional support and help immediately. Will the Minister agree to go back, speak to the Home Secretary and explore the possibility of a series of public information films on TV channels in the UK setting out that domestic abuse is a crime, that victims are not alone, that help and support is at the end of the phone and that by texting or clicking on a website we will come to their aid?
Baroness Williams of Trafford
The noble Lord will know the web facilities that are available, and the Home Office has separately provided £2 million to support helpline and website provision. On his broader question about a mainstream public broadcasting campaign, I most certainly will go back to the Home Secretary, but at this time I would like to avoid—I know the noble Lord will agree with me—having perpetrators and their victims sitting side by side while such information comes on the television. It might create additional tensions within the home. However, I will take the idea back and discuss the matter with the Home Secretary.
Baroness Newlove (Con)
My Lords, I welcome the Government’s funding for domestic abuse charities. Any funding, especially in lockdown, is very welcome. Every Monday I join meetings with domestic abuse front-liners and survivors. While I appreciate that we are giving £28 million to domestic abuse charities, my concern is that the information I have received from Paladin is that it has seen a huge explosion—an up to 50% rise—in stalking. Can the Minister ensure that some funding goes to stalking charities, such as Paladin and the Suzy Lamplugh Trust, which also help coercive control and domestic abuse victims?
Baroness Williams of Trafford
I take my noble friend’s point about stalking. Whenever money is given out to charities, it is within a competitive process, as it were—a fair process—but I will certainly take that back. I am very surprised to hear what my noble friend said about stalking, but I do not deny what she is saying. Right at the beginning of this process, I spoke with Nicole Jacobs—I presume that is who my noble friend is engaging with every Monday—and my noble friend can be sure that I will take that back.
Baroness Watkins of Tavistock (CB)
My Lords, I, too, welcome the innovations that the Government are undertaking, but I have particular concerns about victims of abuse who may have mental health problems or long-term dementia who are unable to seek help quickly. What are the Government’s plans, as we begin to lift isolation and quarantine, to ensure that these members of the population are properly assessed fairly rapidly?
Baroness Williams of Trafford
The noble Baroness hits on a point that will be at the heart of what happens not only during the coronavirus pandemic period but as we come out of it. We have put in £5 million of additional funding for mental health charities to support adults and children who are struggling with their mental well-being at this time. NHS England and NHS Improvement have instructed all NHS mental health trusts to establish mental health crisis lines that are clearly accessible from the trusts’ websites.
The Lord Speaker (Lord Fowler)
I call the noble Baroness, Lady Burt of Solihull.
Baroness Crawley
My Lords, I commend the Minister for the work she is undertaking during this difficult time. What government funding is now getting to the front line for abused children, following a recent safeguarding live survey of front-line services showing that 42% of these services felt they were not able to effectively support child victims of abuse during this time of lockdown?
Baroness Williams of Trafford
It is a crucial point. We have made £1.6 million available immediately to the NSPCC to expand and promote its helpline for adults. Expanding the helpline will mean that many more adults know how and where to raise concerns or seek advice and support regarding the safety and well-being of any children they are worried about. We also have the NCA’s online safety at home campaign, which provides vital support and advice to children.
Baroness Burt of Solihull (LD)
Do the Government not recognise that migrant women, because they have no recourse to public funds, are in great danger of being turned away from refuges? Will the Government please consider suspending the no recourse to public funds rule for all migrants during the crisis, and abolishing it altogether for these most vulnerable women and their children?
Baroness Williams of Trafford
One of the things the Government have done is to announce £3.2 billion of funding for local authorities to support the most vulnerable victims in our society. Of course, the noble Baroness is referring to people who have not yet got a legal right to be here, and I totally see the point that she is making.
The Lord Bishop of Worcester
My Lords, we know that domestic abuse affects every community, including religious communities. Can the Minister assure the House that the Government are partnering with faith groups to raise awareness of available support during the pandemic?
Baroness Williams of Trafford
We are reaching out to everybody. I cannot say for certain about faith groups, but I can certainly get him some information about that. One of the things that was first and foremost on my mind and that of other Ministers was the danger to women, mostly, and children who are locked up with their perpetrator for what has now been nearly seven weeks.
Lord McColl of Dulwich (Con)
My Lords, as most cases of domestic violence are known to the neighbours, should we not encourage them to inform the police about repeated episodes in order to reduce this terrible crime?
Baroness Williams of Trafford
I totally understand that point. This has been on our radar, and we have engaged with police and communities. Neighbours can set up silent codewords with potential victims, which is one way that people can communicate with each other in these very stifling times during lockdown. That will certainly help the police, who are engaging with high-risk victims and perpetrators during this time.
Lord Campbell-Savours (Lab)
My Lords, my question has already been asked by my noble friend Lord Kennedy of Southwark—it is the subject of a piece I wrote in the Times a couple of weeks ago. May I dispute the Minister’s answer? She said that she does not think it would be very helpful if people were to sit side by side. I think that is exactly what we want. We want victims and abusers to be sitting side by side when the message comes over that what is happening is wrong, and when giving information and advice.
Baroness Williams of Trafford
My Lords, I did not denounce the point made by the noble Lord, Lord Kennedy; I pointed out some of the unintended consequences of stirring up tensions when a household might already be in a very tense situation. I by no means dismiss the noble Lord’s point.
The Lord Speaker
I regret that the time allowed for this Question has elapsed.
Aviation and Tourism: Cancellations
(4 years, 6 months ago)
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Lord Blencathra
To ask Her Majesty’s Government what steps they plan to take to ensure airlines and tour companies refund people for costs incurred following the cancellation of flights and holidays.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, the Government’s position is clear. If a customer asks for a refund, that refund needs to be paid. The Government are in regular contact with the airlines and other travel providers, the regulators and consumer groups, to help businesses deliver on their commitments.
Lord Blencathra (Con)
My Lords, I thank my noble friend for the clarity of that reply. Will she make it clear to all airlines and travel providers that sitting on £7 billion of customers’ money and inventing scams such as telling people to claim online or by telephone and then not answering those calls is a breach of the 2018 regulations, which require a full refund within 14 days? They must do that. Will they also stop their pyramid selling of phantom flights which will never happen, taking customers’ money and not refunding it? Is this not simply fraudulent?
Baroness Vere of Norbiton
My Lords, the Government appreciate the frustration that consumers are feeling. We have made it absolutely clear that the customer should get a refund if they ask for one. However, we also recognise the enormous challenges that businesses face. They have very large volumes of such requests, and staff may not be available—they may have been furloughed. There may be capacity constraints because of social distancing, or an increase in staff absence due to illness. The regulators are working very closely with the industry to find out what the problems are and to ensure that customers get their money back.
Lord Rosser (Lab)
Which? magazine has reported that a quarter of those with a cancelled flight in April were not offered a refund, and 19% were waiting to hear back, with figures much the same for those who had a holiday cancelled. Indeed, I was given an example this morning of British Airways still not having delivered on a promised refund, a month later. The Government decide what financial support to give our key travel and tourism industry to keep firms afloat, but the Government and the Civil Aviation Authority should not be allowing consumers’ clear statutory rights to be ignored by some parts of the industry. I return to the point made by the noble Lord, Lord Blencathra: when will the Government and the CAA act to protect the rights of consumers whose financial position may now be critical, as opposed to simply talking about doing so?
Baroness Vere of Norbiton
I do not accept that we are just talking about it. The CAA is in close contact with the industry; it recognises the current issues, and that there may be some delays. A consumer should not be told that they cannot have a refund. If they have been, they must contact the CAA with the details to find out exactly what is going on. We are working very hard to minimise the delays and to ensure that consumers get their money back.
Viscount Waverley (CB)
Compounding the distress, the tourism industry at destinations is also moribund. I fell foul of this myself, but recognised force majeure. Does the Minister recognise that certain carriers are avoiding legal compliance by not paying out on cancellations, yet are benefiting from bailouts or implementing internal redundancies and renegotiating contracts for those who remain? Notwithstanding this, will the Government consider supporting those who are uninsured by underwriting voucher claims in the event of future airline failure?
Baroness Vere of Norbiton
I thank the noble Lord for that suggestion and for bringing up the important issue of vouchers. Customers may be offered a voucher as opposed to a refund, but they are under no obligation to accept it. We are looking at all sensible proposals so that we can balance the protection of consumer rights, which is absolutely essential, with recognising the enormous impact this is having on an industry that employs hundreds of thousands of people and is a huge contributor to our economy.
Baroness McIntosh of Pickering (Con)
Does the Minister agree that one of the greatest problems facing the airline industry at the moment is cashflow? What support are the Government minded to lend to the airlines at this crucial time? What discussions are she and the department having with our international partners to enable flights to take off at some point this year, particularly regarding social distancing, which is important and very difficult to deliver on planes and at airports? What kit will passengers have to use and what will be done to enable our rules to be recognised by our international partners?
Baroness Vere of Norbiton
My noble friend raises an important series of questions. On voucher support, the Chancellor has already announced wide-ranging support for all sizes of businesses. I encourage all those in trouble in the travel sector to avail themselves of the opportunities that there are. On restart and recovery, which is very much on our minds as well, an aviation restart and recovery team has been set up specifically at the DfT to work with the aviation industry to understand all the challenges it will have to get our planes back in the skies and to make sure that people can once again travel.
Baroness Randerson (LD)
My Lords, the problem is not just with airlines, but with cruise operators and other providers. There appears to be a particular problem with those operators that are foreign owned. Many European countries have already changed their regulations to tighten this up. Are the Government planning to do likewise? Are they aware of the crucial issue that there is no point in having refund vouchers if a company no longer exists? Many of these companies are in danger of ceasing to exist in the near future.
Baroness Vere of Norbiton
The noble Baroness, Lady Randerson, is absolutely right that many of the cruise companies are indeed foreign owned. Provided that a cruise has been sold, or indeed offered for sale, in the UK, it will be covered by the package travel regulations. Therefore, the consumer will be entitled to a refund within 14 days. If a cruise holiday has been sold outside the UK or the EU, different terms and conditions may well apply. I will take back to the department her suggestion that other EU countries have changed their regulations. We will look into it.
Lord Naseby (Con)
On hotel and travel cancellations, what action can a consumer take where the provider’s insurance is claiming force majeure due to circumstances created by Her Majesty’s Government?
Baroness Vere of Norbiton
The issue around force majeure and contracts is complicated. I am sure my noble friend will appreciate that I cannot give firm advice, because in these cases, each contract is likely to be slightly different. In the case that this is happening to a consumer, I suggest that that consumer gets their own independent legal advice to fully understand the terms of the contract. It is also the case that some consumers who use a credit card will be able to make a claim with their provider. They might want to check with them as well.
Baroness Bennett of Manor Castle (GP)
If the Government are considering the bailout of transport operators, will they make it conditional upon the fair legal treatment of customers, particularly regarding refunds, as well as on the payment of tax, decent treatment of workers and environmental impact, perhaps along the lines of the New Economics Foundation’s fair bailout decision tree?
Baroness Vere of Norbiton
The provisions that have already been put in place and announced by the Chancellor are available across the economy. They therefore do not have the sorts of conditions that the noble Baroness outlines. However, the Government are always open to speaking to any company that has exhausted all other forms of support and taken all the actions necessary. In those cases, we will make sure that appropriate conditions are put in place to make sure that the company behaves exactly as we would intend it to.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, the Minister says that she is in regular contact with the airlines, but it is clear from what we all have heard, and from the exchanges today, that the airlines are thumbing their nose at the Government. In the light of the Question from the noble Lord, Lord Blencathra, and all the contributions, will she go back to the airlines and say that it should not take months and months to make these refunds? With modern computer technology they can make them quickly. They are very quick at taking our money; they are not very good at paying it back.
Baroness Vere of Norbiton
The noble Lord reiterates points that have been made previously. I can only reassure him that we are working with the airlines to understand the challenges they face in order to get the money back to consumers. There are unprecedented challenges at this time, but we also recognise that customers should get their money back and in a timely fashion.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has now elapsed. I thank noble Lords. That concludes the Virtual Proceeding on Oral Questions. Virtual Proceedings will resume at 2 pm for the Private Notice Question. Proceedings are now adjourned. Thank you very much indeed.
Arrangement of Business
The Senior Deputy Speaker (Lord McFall of Alcluith)
My Lords, Virtual Proceedings of the House of Lords will now resume. I remind Members that these proceedings are subject to parliamentary privilege and that what we say is available to the public both in Hansard and to those listening and watching. Members’ microphones will initially be set to mute, and the broadcasting team will unmute their microphones shortly before we reach their place in the speakers’ list. When Members have finished speaking, their microphone will again be set to mute.
The Virtual Proceedings on the Private Notice Question will now commence. I will call the Private Notice Question in the normal way and supplementary questions will be asked in the order shown on the speakers’ list. Please ensure that questions and answers are short; there are many speakers on the list and more will be called if the answers are short. Each speaker’s microphone will be unmuted prior to asking a supplementary question and returned to mute once their supplementary question has finished.
House of Lords: Membership
(4 years, 6 months ago)
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Lord Forsyth of Drumlean
To ask Her Majesty’s Government, in the light of recent press reports, whether they are considering proposals for reform of the House of Lords based on the exclusion of those over the age of 65.
Lord Forsyth of Drumlean (Con)
With respect and admiration for my noble friend the Minister, I ask: as this Question is about the future of this House, why is the Leader of the House not answering it? What have the Government done to rebut the Sunday Times report that Ministers are examining whether they could retire every Member of this House who is over the age of 65 and that we are all so old that there is no prospect of us doing our job? Will the Government name the Whitehall source responsible for this false and malicious briefing? If this is not known, will they invite the Cabinet Secretary to investigate and, if the source is identified by him, ensure that they are summarily dismissed?
Lord True
My Lords, there are a number of questions there which I am sure have been noted. I am sorry if my noble friend thinks it is only the second division that has come out to answer the Question, but I think the second division is adequate to put paid to a third-rate story. There is no substance in it. It is not the intention of the Government to introduce such a policy.
Baroness Hayter of Kentish Town (Lab)
In the light of that answer, would the Minister ask the Leader of the House, who is meant to represent the whole of the House of Lords, to put in her own words in the public domain, either through a statement or press release, the answer that has just been given, which is that there are no plans of this nature? Could the Minister give us that undertaking and say why on earth anyone in Whitehall is thinking about reform of this House at the moment, rather than the national emergency facing us?
Lord True
My Lords, I have stated on the record the position of the Government—I am sure that any number of Ministers could do the same—and I have no doubt that the Leader of the House will be following our proceedings. The current total priority and focus of this Government is to deal with the Covid-19 emergency. I assure the noble Baroness that, were such an idea ever to be suggested, it would be given the very lowest priority.
Lord Tyler (LD)
My Lords, is it not obvious that somebody in No. 10 is playing party games with the constitutional role and responsibility of Members of your Lordships’ House, as set out in our Writ of Summons from Her Majesty the Queen? Following the answer that was given just now, can we be assured that the Leader of the House will start leading for the House and will stand up to No. 10? Will the Minister confirm that any changes of this sort will follow the normal process of scrutiny, debate and votes in your Lordships’ House?
Lord True
My Lords, I certainly agree with the point on scrutiny. The Government have made it very clear that they do not consider piecemeal reform of this House to be sensible. However, I repeat that there is no substance in this story. I am not sure whether it was a case of the ill informed meeting the inventive or perhaps one or the other, but I repeat that it is not government policy.
Baroness Hayman (CB)
My Lords, reducing the size of the House is obviously not a priority for the moment but it is something that we need to do. Will the Minister confirm that the Government will consider putting a cap on the size of the House, allowing its numbers to be reduced along the lines of the Burns report? However, as other noble Lords have said, the priority now is surely to enhance and increase both the scale and the effectiveness of the scrutiny that we as a House can bring to the conduct of the Government during the current crisis. Are there plans to expand the role and function of the House from their limited forms at the moment?
Lord True
My Lords, I welcome scrutiny and think that it is vital for a democracy. Obviously, the arrangements made by the authorities of the House are beyond my remit; I am here to answer for the Government. The Government do not currently intend to put a cap on the size of the House; indeed, their position is that from time to time the House will need refreshing. That has always been the position; it has never been a static House.
Lord Polak (Con)
My Lords, I speak as a Member who is still just in his 50s. Our House does indeed need to be kept fresh and current, so reform is necessary. However, does my noble friend agree that the expertise and knowledge brought to this House by my noble and learned friend Lord Mackay, or the mastery and love of democracy and its institutions of my noble friend Lord Cormack, to name but two examples, rather proves the point that the implementation of arbitrary criteria would be not only wrong but seriously detrimental to our deliberations?
Lord True
My Lords, I understand what my noble friend is saying. For example, my noble and learned friend Lord Mackay of Clashfern makes an immense contribution, even though I think he only gives a year in age to Her Majesty the Queen. Anybody who had half a tin ear to the work of your Lordships’ House would understand the immense contribution made by older people in it. I submit that if an appointed House is not in good part a House of expertise and experience, it is nothing, but I repeat that the House needs to be refreshed from time to time.
Lord Harris of Haringey (Lab)
My Lords, the story has all the hallmarks of a No. 10 briefing intended to stifle scrutiny by your Lordships’ House. If that is not the case, will the Government agree to strengthen scrutiny by this House, perhaps by agreeing to a daily statement by the relevant Minister following the Downing Street press conference, and allowing more time for debate and routine questioning of the Government? Surely the Minister accepts that transparency will strengthen public confidence in the Government and their handling of the present crisis.
Lord True
My Lords, I agree that transparency is vital in public affairs. I am not responsible for usual channels. I would be a wealthy man if I had a pound for every unattributable briefing that was knocked down under the last Labour Government. I have repudiated this story and the alleged proposals on behalf of the Government in Parliament, and there it should rest.
Lord Campbell of Pittenweem (LD)
It cannot really rest, of course, because this is only one of a series of unattributed weekend briefings from No. 10. Although the finger cannot be pointed definitely at someone, most of us have a pretty good idea where the briefings are coming from. Frankly, it is not acceptable; it should be stopped, and the Prime Minister should stop it. On refreshing the House, what the Minister said is of course true, but it is generally accepted that some 40 names are already waiting to be introduced to the House. That goes far beyond “refreshing”, and drives a horse and cart through the Burns proposals, which the House unanimously accepted.
Lord True
My Lords, I think this is going wide of the Question, though the noble Lord might wish to reflect on the large number of Peers on his own Benches who were brought in under the previous two Administrations. I shall not enter into conspiracy theories; the House should concentrate on fact and work. I have stated on the record that this is not, and has not been, government policy.
Baroness Falkner of Margravine (Non-Afl)
My Lords, while I completely support reform of the House of Lords—indeed, I was enthusiastic about the last reform—I hope that when Ministers get round to considering this matter they will look at the need for a more balanced Chamber representing not only the protected characteristics but expertise beyond the current framework. The House does need refreshing from time to time; I support the Minister in that view.
The Senior Deputy Speaker (Lord McFall of Alcluith)
Lord Blencathra. No? I call the noble Baroness, Lady Mallalieu.
Baroness Mallalieu (Lab)
While I welcome the brief and robust way in which the Minister has answered this Question, will he take a moment to put to bed a couple of other stories circulating in the news at the moment which are alleged to be future government policy and are causing worry particularly to our older people: first, that the triple lock on pensions is to go and, secondly, that 9 million people over 70 are to remain incarcerated after lockdown is eased? Does he agree that these stories have caused increased anxiety and entirely justifiable anger and outrage? Will he assure us that both stories are also fake news and that there is no reality in them now or in the future?
Lord True
My Lords, again, I understand where the noble Baroness is coming from, but her questions go slightly wider than the Question before the House. On future arrangements on lockdown, the Government have promised further advice shortly. As noble Lords will know, the position is that everyone is being asked to stay at home at the moment however old they are, but I will not speculate here on what may be considered appropriate in the next phase.
The Senior Deputy Speaker
My Lords, the time allowed for this Question has elapsed.
Arrangement of Business
The Senior Deputy Speaker (Lord McFall of Alcluith)
My Lords, the Virtual Proceedings on the debate in the name of the noble Lord, Lord True, will now commence. This is a time-limited debate and, as shown on the Order Paper, unless any noble Lord objects, the time limit is two hours.
I will first call the noble Lord, Lord True, in the usual way. The question will then be put. Then I will call each speaker on the list in the usual way. Each speaker’s microphone will be unmuted prior to speaking and returned to mute once their speech has finished.
Budget: Economic and Fiscal Outlook
(4 years, 6 months ago)
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Lord True
To move that the Virtual Proceedings do consider Her Majesty’s Government’s assessment of the medium-term economic and fiscal position as set out in the latest Budget document and the Office for Budget Responsibility’s most recent Economic and Fiscal Outlook and Fiscal Sustainability Report, which forms the basis of the United Kingdom’s Convergence Programme.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, many noble Lords will be familiar with the purpose and provenance of this annual Motion and debate. Since 1999, in the days when we were members of the European Union, the Government were required to send an annual assessment of our economic and budgetary position to the European Union, following its consideration by Parliament. Known as the UK convergence programme, this is part of the stability and growth pact based in the Treaty on the Functioning of the European Union. It is also now important to reflect on and embrace the fact that the UK will be sending this economic assessment having left the European Union. This Government have honoured the promise we made to the British people in the 2019 general election and, after years of regrettable delay, we have delivered on the instruction that was given in the 2016 referendum.
The UK having left the European Union, some noble Lords may find it somewhat perplexing that I am bringing forward this Motion at all. However, as we are in the transition period, there is still a legal obligation under the terms of the withdrawal agreement to provide the European Commission with an update of the UK’s economic and budgetary position. However, the UK cannot be subject to any action or sanctions as a result of our participation, which will end once the transition period comes to an end. This is just one example of the kind of reporting back and accounting to the European Union that will become a thing of the past at the end of this year, when we are a fully independent and sovereign country.
I present this year’s assessment to the House today at an unprecedented and challenging moment for our country and people, and at a unique time in our history. The coronavirus pandemic is the biggest challenge we have faced in decades. For many, life as normal, and business as usual, is on hold. The sacrifices that the British people are making in observing social distancing measures are helping to protect the NHS and save lives, and we thank them all. However, there is clearly a financial and economic cost to bear. Our huge and unprecedented programme of support is therefore helping people and businesses around the country.
Having set out that context, I will now give a brief overview of the information we will provide in the assessment that makes up the UK’s convergence programme. This information is based on the Spring Budget report and the Office for Budget Responsibility’s most recent economic and fiscal outlook. It is this content, not the convergence programme itself, that I ask the House to take note of. Noble Lords should also note that this does not represent new information; rather, it captures the Government’s assessment of the UK’s medium-term economic and budgetary position, as we set out in the 2020 Spring Budget that the Chancellor of the Exchequer delivered almost seven weeks ago.
The Office for Budget Responsibility’s forecast confirmed that the Government delivered the Spring Budget within our fiscal rules. Since 2010, significant progress has been made to restore the public finances. By 2018-19, the deficit had been reduced by four-fifths—from 10.2% of GDP to 1.8%—and debt brought back under control. This careful management of the economy and public finances meant that the fundamentals of the United Kingdom economy going into the coronavirus pandemic were strong. This helped the Government to act in an unprecedented way, with measures to protect people’s jobs and incomes, to help businesses and to support the economy through this difficult period.
It is clear, however, that the impact on the economy as a result of coronavirus, and the Government’s unprecedented response to it, will lead to a significant increase in borrowing this year compared to the OBR’s forecast. Indeed, under the OBR’s coronavirus reference scenario, borrowing is expected to rise sharply this year, but fall back quickly in 2021-22 as temporary policy costs end and the economy recovers. While growth remained solid in 2019, as noble Lords would expect, growth in 2020 will be significantly below that of last year—although estimates are highly uncertain at this point. The consensus, both in government and among external economists, is that not taking the steps we have taken would have risked the impact of coronavirus leaving more permanent scars on our economy. As the OBR has said,
“the costs of inaction would certainly have been higher.”
In the Spring Budget, the Chancellor initiated the start of that unprecedented and wide-ranging economic response to the impact of coronavirus. The Budget itself made available £12 billion for temporary, timely and targeted measures to provide security and stability for people and businesses, which by itself represented a significant state intervention. That included, for example, a commitment to refund small businesses for two weeks of statutory sick pay, and waiving business rates for properties used for retail, leisure, hospitality and nurseries during the next financial year.
Since the Spring Budget and the accompanying OBR forecast, the UK, like many countries around the world, continues to face significant economic disruption. Noble Lords will know that in response, the Government have continued to build on the initial financial support package set out in the Spring Budget, for example through the Coronavirus Job Retention Scheme, the Self-employment Income Support Scheme and the Coronavirus Business Interruption Loan Scheme.
We are making great progress in getting much-needed support out to businesses to help manage their cash flows during this difficult time, with millions of pounds of loans and finance provided to hundreds of firms across the country. The Government are also deferring VAT payments for the next quarter, and UK VAT-registered businesses will not need to pay VAT alongside their normal VAT returns—an intervention by itself worth over £30 billion.
While the Spring Budget rightly focused on our immediate measures to respond to the coronavirus outbreak and support people and businesses in the short term, it also set out our medium and longer-term plans, which I will also briefly highlight. The Budget confirmed a significant funding package to deliver 50,000 more nurses, 6,000 more doctors and 6,000 more primary care professionals, and a change to NHS pension rules which means that NHS staff, including senior doctors, can work additional hours for the NHS without their annual allowance being reduced.
The Budget also included ambitious measures aimed at levelling up all regions of our country. For example, the Government will invest £500 billion in roads, railways, broadband, housing and research to level up opportunity across the whole of the United Kingdom. It set out a consultation on our new £3 billion national skills fund and a £1 billion investment to upgrade the further education college estate—measures designed to help young people get the skills they need for the high-paid, high-skilled jobs of the future. These are vital investments in our public services and our future that display the ambition of this Government and for a country free to forge its own path and shape our own destiny having left the European Union.
Now, the Government have clearly committed considerable resources to respond to the unprecedented coronavirus crisis. However, we have also committed to continuing negotiations on the future relationship with the European Union, which are being undertaken virtually. We look forward to negotiating constructively in the next round, which will begin on 11 May. Whatever the outcome of those negotiations—and we remain committed to a deal with a free trade agreement at its core—our position on extending the transition period is clear and unchanged. The transition period ends on 31 December this year, something enshrined in United Kingdom law.
I know some noble Lords are concerned about the impact of not extending the transition period. The fact is, extending the transition period would simply prolong the negotiations, bringing further uncertainty for businesses at a time when they need clarity. As the First Secretary of State said last week in the other place:
“Given the uncertainty and the problems and challenges coronavirus has highlighted for us and for our European friends ... we should focus on removing any additional uncertainty, do a deal by the end of the year and allow the UK and the European Union and all its member states to bounce back as we come through coronavirus.”—[Official Report, Commons, 29/4/20; cols. 317-18.]
An extension would also entail further payments into the EU budget and keep us bound by EU legislation at a time when we need full legislative and economic flexibility to manage the UK’s medium and longer-term response to the pandemic. We need to be able to design our own rules, in our best interests, to manage our response to coronavirus, including working closely with our European friends, without the constraints of following EU rules.
In the Spring Budget, as well as responding to the challenges posed by the coronavirus outbreak, the Government prepared this country for our longer-term recovery and prosperity. Having continued to improve the state of our public finances, we are well prepared to step up and provide unprecedented short-term and temporary financial support for people and businesses at this time of national emergency. As the Budget showed, we are also investing in our public services and infrastructure for the longer term, levelling up all regions of the UK, with the Budget setting out meaningful investment in our future productivity and our current public services, something that will be needed more than ever as we emerge from the coronavirus crisis.
Following this debate on the economic and budgetary assessment that forms the basis of the convergence programme, the Government will, for the last time, submit it to the Council of the European Union and the European Commission. I beg to move.
Lord Livermore (Lab)
My Lords, the Covid-19 pandemic has created an unprecedented shock to the economy. In response, the Government’s fiscal policy measures are unparalleled. At 20% of GDP, it is the largest peacetime fiscal expansion in British history. Against this backdrop, the March Budget, just eight weeks ago, already feels like a plan for a different age, yet it was clear even then that the Chancellor presided over an economy with serious underlying weaknesses, presenting the worst average growth forecast on record and rapidly deteriorating public finances, with debt having doubled to £2 trillion, reaching nearly 80% of GDP.
The impact of coronavirus on the economy will be vast. The OBR has published an initial scenario in which GDP falls by 35% in the second quarter, unemployment rises by more than 2 million to 10%, government borrowing increases to £273 billion—the largest single-year deficit since the Second World War—and debt exceeds 100% of GDP. As the IFS has observed:
“These figures are predicated on … a swift recovery. Should the … economy fail to bounce back, the picture would worsen further.”
The Resolution Foundation has reflected this uncertainty with a range of forecasts depending on whether social distancing lasts for three, six, or 12 months. It estimates that GDP will fall this year by 10%, 20% or 24%, with unemployment rising to 2 million, 5 million or more than 7 million. In its three-month scenario, government borrowing reaches 11% of GDP, higher than during the financial crisis, 22% in its six-month scenario, higher than any point in peacetime, and 38% in its 12-month scenario—more than the UK has borrowed in any single year in history.
Faced even with economic consequences on this scale, the Government will apparently still end the Brexit transition period this year. There is a clear risk of no deal, which according to their own assessment would reduce GDP by 9% and, even if they achieve the free trade deal they are seeking, on their own figures this would reduce GDP by 6% compared to staying in the single market, putting additional strain on the economy, which is already under unparalleled pressure.
However severe the coming recession, policymakers will need to manage a protracted period of disruption to livelihoods and finances. There will be an urgent need to rebuild the economy and we will need a radically different approach to the past decade, when we saw the worst period of pay growth for 200 years.
In time, the Government will also need to begin restoring fiscal sustainability; again, we will need a very different approach to what has gone before. In the previous decade, while money was found to cut the top rate of tax and some of the richest families gained £1,000 a year, the poorest lost £3,000—15% of their income. The financial resilience of many families was undermined and our economy and public services were weakened, ill-prepared and ill-equipped for the storms ahead. Subsequent Budgets must move away from the failed strategy of the past and build a new social contract that is fit for the future.
Lord Wallace of Saltaire (LD)
My Lords, in last year’s debate on the government statement on economic convergence, my noble friend Lady Kramer said that it was “surreal” to debate the EU framework when the UK was leaving the EU. This year’s debate is far more surreal: we have now left; Boris Johnson has hardened the terms for a new economic relationship; it looks increasingly possible that no agreement will be reached; and the pandemic has disrupted the world economy.
Statements about the UK economy made before the end of February are no longer valid. The OBR warned that the projections it offered would be invalidated if Covid-19 affected Britain severely. Well, since then it has. The Treasury has abandoned its commitment to fiscal restraint—rightly, given the gravity of our situation. None of the statements we are considering placed much emphasis on the UK’s structural trade deficit or the impact on our economy of a further fall in our exchange rate. The collapse of our negotiations with the EU would worsen both.
The four priority states with which the Government hope to sign free trade agreements to compensate for the anticipated decline in trade with our immediate neighbours are the United States, Japan, Australia and New Zealand. New Zealand? At present, 0.2% of Britain’s exports flow to the 5 million New Zealanders. If we were to double our exports to New Zealand every year for the next five years, that would still leave us exporting less to them than we already do to Poland, Norway or Sweden—countries with which we will find it more difficult to trade in 2021. Is that a rational trade strategy?
Michael Gove has just announced a “customs academy” to train the extra 50,000 staff who will be needed to handle Britain’s trade with the EU after we have crashed out. So much for Vote Leave’s promises that leaving the EU would reduce the burdens on business.
In recent weeks, the Government have rediscovered respect for experts and evidence—at least on health, disease and epidemics—which Ministers from Boris Johnson and Michael Gove down had rubbished. On the economy, the Prime Minister and many of his advisers are still in a fantasy world. Iain Martin, in last Friday’s Times, even resurrected the Singapore-on-Thames illusion that a no-deal Britain could flourish as a service economy, without an important manufacturing sector.
We will not emerge successfully from this acute economic and social crisis unless our Government reconsider their priorities for our domestic economy and trading partners and carry the country with them as they rebuild. So far, I see little sign that they will do so.
Baroness Noakes (Con)
My Lords, let no one pretend that these Virtual Proceedings represent a meaningful opportunity to hold the Government to account. Until a couple of hours ago, we were told that we had just two minutes for Back-Bench speeches. Now it is a stunning three minutes. We have no opportunity at all to intervene. This is not accountability. This is a sham. The sooner we return to normal proceedings, without the excessive time-limiting that has been introduced, the better.
As it happens, the only thing I want to hold the Government to account on today is why on earth we are required to continue sending economic assessments to Brussels and why the Government have failed to repeal Section 5 of the 1993 Act. This Motion has always been a waste of time, as we have debated many times in the past. We have never had any interest in converging our economy with that of the EU; today, it is simply ludicrous. It is obvious that an assessment of our economy in the middle of a major global pandemic is, at best, an academic exercise. More importantly, as has been said, we have left the EU. The future trajectory of our economy may well be of interest to the EU, but we should not be involved in servile submissions to it.
This Motion would have been a waste of time even if the transition period were to be extended beyond 31 December this year. I am grateful to my noble friend the Minister for confirming that the Government remain resolute on no extension to that transition period. At one level, I just want to be done with these silly Motions but, more substantively, does the Minister agree that it would be massively to the UK’s disadvantage if, through an extension, we were exposed in any way to contributing to repairing the economic fallout from Covid-19 across the whole of Europe? Now is the time for the Government to concentrate on our own economy—nothing more, and nothing less.
Lord Hain (Lab)
My Lords, I hope that government talk of getting the economy back to normal will cease, because that was not a good place to be—with business investment abysmal, retail sales the worst for 25 years, productivity falling and economic growth low and slowing every year since 2014 until it finally fell to zero. Record UK employment masked widespread job insecurity, with nearly 1 million people struggling to survive on zero-hours contracts, over 1 million in temporary work or doing second jobs, and the number feeling insecure at work doubling from 6.5 million in 2010 to 13 million in 2013.
Ten years ago, the Government used the overhang from the global financial crisis, of increasing national debt and high government borrowing, as an excuse for austerity to remove £150 billion of spending power from the economy, 80% of it in public spending cuts and 20% in tax rises. But that austerity was never about balancing the budget and bringing down debt to be better prepared for a future crisis, as George Osborne and Philip Hammond have since claimed. It was ideologically driven to reduce the role of the state, leaving us grossly unprepared for precisely this kind of pandemic crisis.
The Government never spent enough on the NHS; the pandemic began with more patients than ever on waiting lists for treatment and A&E waiting times the worst on record. Britain has fewer than three doctors per thousand of our population, compared to more than four in Germany and nearly five in Norway. We have only 2.5 hospital beds per thousand people, against six in France and eight in Germany. It is as if the Government had chosen as the patron saint of the NHS Ethelred the Unready.
After the Second World War, Britain grew her way out of debt. The national debt-to-GDP ratio fell from its wartime high of 259% to a post-war low of 26% in 1990. In the past 50 years, we have had a budget surplus only six times: three of those under the last Labour Government and two under Margaret Thatcher. What brought the debt-to-GDP ratio down in the post-war period was not austerity but economic growth, spurred by massive public investment in housing and a huge investment in infrastructure—it had twice the share of GDP it has today. The NHS would not have been in peril of being overwhelmed had it not been starved of funds for so long; nor, so shamefully, would adult social care, cut by £7.7 billion these past 10 years. The old normal delivered a massively unfair deal to millions of ordinary citizens and left the economy ill-equipped to face the future. We need a new normal.
The Senior Deputy Speaker (Lord McFall of Alcluith)
I understand that the noble Lord, Lord Campbell of Pittenweem, is absent, so I call the noble Baroness, Lady Deech.
Baroness Deech (CB)
Reading the March OBR report on the economic and fiscal outlook put me in mind of the saying of my noble friend Lord King that:
“The lesson is that no amount of sophisticated statistical analysis is a match for the historical experience that ‘stuff happens’.”
Now we know that there was never a better time to leave the EU and to leave it wholly and quickly. Given the economic storm we are facing, extending the transition period will only extend uncertainty for the deals we hope to reach with the US, Australia and others. It will increase the chances that we get involved with the eurozone crisis and, if we extend the transition, we will not be able to take advantage of the legislative flexibility that we so desperately need in order to repair the economy.
During the virus crisis, we have seen member states of the EU adopt various forms of trade protectionism. There has been no EU common policy against the virus. We have seen not sharing or helping, but export restrictions being put on medical equipment. Turkey and China had to help out the worst-hit countries. Debt has not been shared between the wealthier northern countries and the poorer southern ones. We have seen procuring but not obtaining, and cherry-picking on one side of the tree only—dropping state aid rules for oneself but not others. We have seen countries closing borders when it suits, as a protection for their own nationals. In effect, the single market has not been working. China has been able to exploit the EU’s economic dependence on it to further assert political dominance and stop criticism of its record.
We have seen from the negotiations so far that Brussels wants to keep the UK in a captive position dressed up as a level playing field, for example, in relation to fishing. Right now, we have a negotiating advantage. If the EU wants a trade deal, it should agree one. We have seen it on the brink of falling apart. We need to take care of our own economy and put an end to the uncertainty that the remainers so favour. It is time to stop fighting that old battle. The country has spoken three times. We are better prepared for no deal than we were, in part because of the Covid-19 situation, and the economic hit we might take fades into insignificance compared with what we are suffering right now. I hope the Minister will reassure us that we will not be blown off course.
The Deputy Speaker (Viscount Ullswater) (Con)
My Lords, I have taken over as Deputy Speaker.
Lord Balfe (Con)
My Lords, as many will know, I was a firm believer that we should stay in the EU, but I also happen to believe in democracy. The British people gave a very clear answer last December and we now have to do the best we can with that. It is no good fighting yesterday’s battles.
As previous speakers have said, this report is of course largely a waste of time; it was never of much use, but in the fast-changing scenario we are now in, it is of very little use at all. However, one thing that recent history has demonstrated is that not only are we not ruled from Brussels; no one is. I am afraid that the Covid-19 crisis has revealed the weakness of the EU and the way in which national Governments have taken quite different decisions in their own national interest. I do not blame them for that, but we need a more realistic view of the EU. We need to realise that the main winner from the Covid-19 crisis in Europe is China—Beijing, in other words.
I hope that we will use our remaining time in dealing with the EU as a fact-finding exercise to find out exactly what member states are doing to combat the Covid-19 virus and, more importantly, how they are paying for it. My concern is that the countries of Europe are running up debts which will bankrupt them. We have to look at how much we can afford to put into the economy at this time. There is a general assumption in Brussels that the transition will end on 31 December. Officials do not believe that the British Government particularly want a deal and there is a school of thought, particularly in France, that if we can tear it all up, they will end up with a better deal than they will by negotiating one.
So, let us not imagine that everybody is lining up and saying, “Oh, we must have a deal with Britain—otherwise, everything will fall to bits.” A good group of people are saying, “The transition will end on 31 December and then we can start anew; we can negotiate a whole new series of things.” However, I disagree with the idea that we do not need to work together. We cannot retreat. We have to repair the economic fallout, not only in Britain but in the rest of western Europe—indeed, the whole of Europe. We will need to work together. Our neighbours’ problems are also our own. It is not for us to solve them financially, but it is for us to be concerned by them and to do our best to work with our EU partners even though we are outside the EU, just as Norway does.
Baroness Quin (Lab)
My Lords, in last year’s debate, my noble friend Lord Davies of Oldham said in winding up that
“we are not in normal times.”—[Official Report, 9/4/19; col. 463.]
He spoke of what he saw as the threat to our economy. I must say that his words seem even more apt in today’s dramatic circumstances.
In the short time available, I will limit myself to asking a couple of questions and raising a couple of issues to which I hope the Minister will be able to respond when he winds up. First, given that we have left the EU and that we will no longer be part of a freedom of movement system which I believe has brought benefits to our economy and our citizens over the years, I urge the Government to look at changing what seems to be their current approach to immigration. While we all hope that British people will be able to find jobs in our economy, in the post-Brexit world there are some sectors—particularly agriculture, the hospitality industry and, not least, our health and care sectors—where workers from outside will be necessary and, I hope, welcome. For example, the president of the National Farmers’ Union has talked of needing workers: from fruit-pickers on the one hand to specialised vets on the other. Yet, it seems to me that the Government’s talk of favouring “the brightest and best” and those with high earning capacity is much too rigid. We will need to be much more flexible in our immigration policy than the Home Secretary currently seems prepared to be.
Secondly, all the previous predictions by Conservative Governments in recent years have shown that being outside the single market will involve some harm to the economy, particularly if we leave without a deal. The worry is that this will come on top of Covid-19 and its aftermath. As ever, I am particularly concerned about my own part of the country, the north-east of England, which has had a greater dependence on EU exports than any other region in recent years. I hope the Government will stand by their commitment to levelling up across the country and tell us—perhaps the Minister could do so when winding up—what they are going to do for the north-east.
Finally, now that we are outside the EU and having to forge a new economic relationship with it, I urge the Government to be motivated not, as so often in the past, by political views within their own party, but solely by what they consider to be in the economic interests of our country and its people as we strive to move forward.
Baroness Northover (LD)
My Lords, the House of Commons did not even debate this assessment or vote on it. In fact, the Commons approved this without even seeing it as it was not published until yesterday. I am glad that the House of Lords is considering it.
The Budget and the OBR report on which it is based are, of course, very much out of date. Nevertheless, the Convergence document has just been produced. It notes:
“Early data releases suggest the short-term impact of Covid-19 on the global economy may be significantly larger than that of the global financial crisis.”
I note the word “short-term”.
The document states that the increase in borrowing is likely to be temporary. These findings assume a V-shaped bounce-back. That now looks highly unlikely, both in the United Kingdom and globally. There are therefore major implications for tax revenue and employment. Even when the lockdowns are lifted, certain industries will be affected long term. In China, it is noted that, whereas after the 2008 crash there was a problem with demand, now there is a problem with supply.
What we do when this pandemic is over will matter. We will have an economy to rebuild and a debt to address. People have drawn comparisons to the war, but closer comparisons surely need to be drawn to each post-war period. After the First World War, there was little co-operation and a financial crash with terrible consequences and the resultant rise of deadly populist movements. After the Second World War, a number of international organisations were set up. The Marshall plan was initiated for Germany. In the United Kingdom, the promises made during the war of a better, brighter future, including free healthcare, were largely delivered, though without social care.
Week after week, we have been standing outside clapping the NHS and essential workers. It will be very difficult for the Government not to address their needs. Can the noble Lord tell us the Government’s thinking? Does he agree that a further period of austerity brings huge social and political risk and that a different approach will be needed? As part of that, we need to look at our relationship with the EU. Clearly, we will not conclude adequate discussions with the EU by June, as it is required for all parliaments to approve the agreement; therefore, the transition must be extended. Surely the Government would not take the risk of crashing out and further damaging our economy and society at this time of crisis.
Baroness Falkner of Margravine (Non-Afl)
My Lords, I agree with other speakers that it is, indeed, a surreal experience to be speaking on government compliance with the SGP on a convergence programme, given that we are diverging from the EU, notwithstanding our obligations under the transition period. I also note that within the EU the SGP escape clause has been triggered, but that the EU insists that this should not suspend programme reporting. That seems slightly odd, given that no member state will be able to say with any certainty where it might be even by year end, never mind in the next three-year period. However, since the UK is complying, I shall make two general points.
The obvious point is that although we have left, the economic strength of our largest trading partner—its growth and prosperity—continues to be of huge significance to the UK economy and business. The EU, just like all economies, is throwing everything at dealing with Covid-19, but we simply do not know how that will play out in the peripheral economies of the eurozone. All we can do is hope that this emergency continues to be a health and economic emergency and does not turn into a financial crash as well; 2008 still hangs over us. Looking at the stock of non-performing loans on banks’ books, a Financial Times report yesterday shows that four of the top five banks making provisions for bad loans are UK institutions, so we need to be vigilant as the situation unfolds.
My second point has to do with the UK record in terms of deficit and debt criteria. When I took over as the chair of the EU Financial Affairs Sub-Committee, the UK was in excessive deficit procedure, for the perfectly understandable reason that our deficit and debt had rocketed during the financial crash of 2008. Although we were not subject to sanctions, due to Protocol 15, we were nevertheless subject to surveillance and had to demonstrate an endeavour to avoid an excessive government deficit. This was achieved and the UK returned to the preventive arm of the SGP, but the discipline of a deficit and debt target or range is an important one, as long as it is flexible and can adjust to emergencies to take account of automatic stabilisers.
My question to the Minister, in finishing, touches on the Government’s fiscal rules. While these are desirable in normal times, I have always disagreed with the straitjacket of PSNI not exceeding 3% of GDP, so will the Government rethink these rules in light of the current situation?
Lord Howard of Rising (Con)
My Lords, this debate is worthy of a Gilbert and Sullivan comic opera, but even those masters of the absurd could not have imagined anything quite as ridiculous as discussing convergence with an organisation that we are not a part of at a time when it is impossible to know the finances of either the UK or the European Union. Gilbert and Sullivan would have particularly enjoyed the added absurdity that the other place thought the matter so unimportant that it did not even bother to debate it, while this House’s debate has 22 speakers.
The countries of the EU are diverging rapidly. Economically, the majority of the EU is a mess. Political disintegration combined with economic meltdown has created such chaos in the EU that convergence is a fantasy. Today’s Motion is as divorced from reality as Monsieur Barnier’s negotiating. He struts about producing unrealistic conditions as if we were not a sovereign and independent nation. We have already left the European Union, although we have until 31 December to achieve a trade deal. I am grateful to the Minister for confirming that that is the final date for negotiating a deal. Can he confirm that only by that date being written in stone will a successful trade deal be achieved?
Lord Liddle (Lab)
My Lords, I want to follow on from where the noble Lord, Lord Balfe, ended in talking about the future importance of a Britain outside the European Union co-operating with our European friends and allies. I have been much saddened by this debate. Frankly, some of the speeches have demonstrated hatred—I would put it like that—of the European Union and no recognition of interdependence; that is, that we must live with our closest neighbours on the continent. I want an assurance from the noble Lord, Lord True. He said that the Government believe in European co-operation, but what are their practical plans for that to get us out of the present crisis?
Look at the number of different possibilities. First, we need macroeconomic co-operation. We need a repeat of what Gordon Brown did in 2008-09: working with our European partners on a co-ordinated fiscal stimulus. If you do not have that degree of co-ordination, fiscal stimulus is ineffective.
Secondly, we need to work closely with European countries on our research programmes, which have never been more important than during this health crisis. We need to strengthen research co-operation, not reduce it. This is vital for many British universities.
Thirdly, we need sectoral co-operation in key areas of our industry. For example, let us go back to the financial crisis again. The car industry was in a terrible mess then. It is in a terrible mess today. We had adopted, by agreement with several of our European friends, a system of car scrapping incentives. This could be done again with green new deal objectives in mind. We should work towards that to save the European car industry. Similarly, Airbus is absolutely fundamental to our manufacturing position in this country. What are we doing with France and Germany to guarantee the future of Airbus and its manufacturing in Great Britain?
One could go on with many other examples. We need practical European co-operation. Will we get it from the Government of the noble Lord, Lord True?
Lord Purvis of Tweed (LD)
My Lords, the Minister referred to the OBR report, as will I. He was keen to show the areas of progress. I understand that, and indeed that is all welcome, but he glossed over the areas where the OBR has flagged concerns, on debt in particular. We know that debt is likely to increase considerably and there will be consequences that we will have to manage well into the future. The Chancellor has already said that the self-employed will need to pay more tax in future to pay for the support package, and that will be unfair if done disproportionately.
Setting aside the Minister’s slightly tone-deaf rhetoric at the start of his speech about sovereignty at a time of global pandemic, the reality is that our economic life, our trade and our people will continue to be inextricably linked with our closest geographic and trading economic partners in Europe. The Minister celebrated what he described as being able to act free from the constraints of EU rules, as he put it, but the Government themselves chose to take part in the PPE procurement scheme and to operate under the customs system, and they themselves operated under the EU repatriation scheme. Why? Because it is now, as it has been, good sense for the British economy and our people to work seamlessly with our closest partners and neighbours—although of course the words “seamless” and “frictionless” are no longer used.
The Minister also neglected to reference the report on the future levels of GDP and the impact of other trade agreements and our EU relationship on productivity. Taking the fact that the UK has left the EU and will have its own migration policy, in March the OBR said:
“In broad terms, these imply that potential productivity will eventually be around 4 per cent lower than it otherwise would have been, mainly due to extra costs resulting from higher trade barriers and greater impediments to the exploitation of comparative advantage.”
The Government try to suggest that this fall will be offset by new trade with the USA. The Government themselves stated in their negotiation briefing earlier this year that a good deal with the USA would represent about £1 billion extra a year for our economy over 15 years—that is, 0.07% to 0.16% of positive GDP. Not many in this debate, other than perhaps the Minister or the noble Baroness, Lady Deech, believe that a 0.16% increase will offset a 4% fall. So what is the Government’s assessment of the net impact on future trade of all possible EU and other-country arrangements?
We remain unsure about the imminence of a comprehensive deal with Japan and Canada—and that is simply to prevent massive disruption, not to grow. This is not about fighting old battles, but we need the Government to be open now and tell us what they estimate the net impact on all productivity and trade will be. We simply will not be able to enter the battles of the future wearing an armour of self-deception, which has been too prevalent in this debate so far.
Lord Birt (CB)
My Lords, a disastrously infectious and pernicious virus has rendered obsolete both March’s Budget and February’s OBR outlook. That is because, as we know, every month that the lockdown continues we are losing around one-third of our GDP—the wealth that together we create, which finances our individual life choices and funds the NHS and every other public service. Without wealth creation, we are destined for public and private impoverishment. Around one-third of our workforce is now furloughed and an estimated 60% of our households have no savings. We cannot borrow for ever—or even for long—to fund the current massive shortfall in government revenues.
We and other western countries were slow to respond to the virus. We need a surer touch in emerging from the lockdown. We must first reduce new cases to low numbers, as Germany and New Zealand have done, and then we need a capability at scale to test, trace and isolate. South Korea—a nation our size—is the exemplar here, experiencing only 250 deaths. All the while, we must maintain a standby capability for fear of a second wave.
In emerging from the lockdown, we must recognise that every business is singular: with a unique mix of suppliers from home and abroad, a unique mix of customers, and a unique offer of products and services. Every business has been affected differently by the lockdown, and every business will have to design its own unique route out, consistent always with a tireless concern for the safety of its staff and customers.
Even then, world markets will be uncertain. China is back at work, but its consumers are not yet spending. The US has 30 million new jobless. This will remain an unsettled world until science can come to our rescue with a treatment or a vaccine. I fear that we will certainly and quite soon need a fresh OBR outlook and a new Budget. But in the meantime, we must do everything we can to put business back on its feet again. Back to work we really must go.
Viscount Trenchard (Con)
My Lords, I am grateful to my noble friend Lord True for introducing this rather odd debate today. It is indeed strange that the UK is still required to submit information on its medium-term economic and fiscal position to the EU, although we left the EU more than three months ago and the implementation period will end on 31 December this year, as the Prime Minister has made clear on many occasions. It is of course also strange that the Treasury has said that it will produce a convergence programme based on the spring 2020 Budget and on the OBR’s economic and fiscal reports. As noted by other noble Lords, all these economic plans are out of date in that they do not take account, or take only limited account, of the economic impact of the coronavirus pandemic.
I have spoken in this debate many times in the past, especially during the period when my noble friend Lady Noakes was a shadow Treasury Minister. I wanted therefore to participate in this debate for the last time.
To those who argue that the coronavirus pandemic provides a reason why the Government should move to amend the withdrawal agreement Act so as to make possible an extension to the implementation period beyond the end of this year, I say that the reverse is true. The additional challenges faced by the economy as a result of the pandemic make it all the more essential that we bring to an early end the present highly undesirable situation where we have left the EU formally but remain bound by all its laws and regulations, even though we no longer have any representatives in EU bodies and have no influence whatever on which regulations are adopted.
Can the Minister please explain why, just because we are currently operating virtually, we are now subject to extremely restrictive speaking time limits? This debate has never been time-limited before. Without wishing to belabour your Lordships, I would have liked a little more time to explain the reasons why I believe that our new independent trade policy will provide a much better platform for us to rebuild the economy and create a prosperous future for all our people. We will be a strong advocate for competitive free trade and a proportionate regulatory policy at the WTO, and an equally strong advocate for open, innovative financial markets such as IOSCO playing a greater part in building the right regulatory framework for our global marketplace, within which I believe the City of London will surely maintain and build further on its leading position.
Baroness Ritchie of Downpatrick (Non-Afl)
My Lords, both documents that we are taking note of today are now simply historical because they have been overtaken by the unprecedented circumstances of the coronavirus, which has dented our economy. Perhaps I may give an example of that in a Northern Ireland context.
Unemployment is predicted to rise to 10.5% this year, and many of those affected will be very young people—young graduates and young people leaving school—who will find themselves out of the door, having just been brought in through the door of employment. In fact, the economy is set to contract by between 7.5% and 10.5%, which is unacceptable. However, there are other issues that we have to take into account. The other shock to our economy is Brexit. I firmly believe that today the Minister has to tell us what plans there are on the far side of the coronavirus pandemic to underpin, develop and revive our economy.
As a remainer, I accept that we are leaving the European Union, but in relation to Brexit there are two outstanding burning issues that require resolution. The first is the transition period. Because of the coronavirus, there is insufficient time to deal with the trade agreement. For that reason, in spite of what the Minister said today and what the Government said last week, I urge the Government to extend the transition period. Secondly, the Government are not engaging properly with the European Union to obtain a good deal, and in that respect I cite the discussions that have been held on the transition.
I want to make another fundamental point. In February 2019, the European Union asked to be given offices in London, Edinburgh, Cardiff and Belfast. At the time, the Government promised that the EU would have permission to arrange that. The Ireland/Northern Ireland protocol requires the EU to have an office in Belfast to forge the technical details. However, I have received a Parliamentary Answer from a Minister, who has informed me that that will not be possible. That is outrageous. That office is needed to work out and fully implement the technical details of the protocol —for example, the question of unfettered access. Perhaps the Minister can respond to those issues today.
Lord Shipley (LD)
My Lords, eight weeks ago, several important announcements were made in the Budget about infrastructure investment. There was to be a significant rise in borrowing to fund this, to be paid for by future growth. That Budget was said to represent an end to austerity.
Just eight weeks later, the Government are paying the wages of 6 million people, with one in four employees in furlough. The Chancellor has said there is “no limit” to the funds available in the face of the OBR forecast that the economy could shrink by 35% in the second quarter and by 12.8% for 2020 as a whole. We now know that the Government might borrow £273 billion this year—the largest annual deficit since 1945. How do they plan to pay for this underpinning of our economy in the face of declining tax revenues? Will it be simply through anticipated growth?
I would like to ask the Minister three further questions. First, he referred to the Prime Minister’s promise of a levelling-up agenda for the whole country. I would like to suggest that this should mean investment in our domestic manufacturing base in the face of a likely decline in global supply chains, as well as the need for greater security of supply. Will the Government confirm that they will still rewrite the Green Book rules to help those places where growth and productivity are lower?
Secondly, we seem to be witnessing the closest working between the private and the public sectors since 1945. Does the Minister accept that government support must carry on after lockdown ends? Enabling the economy to recover will inevitably be a gradual process and, crucially, the Government must protect the job retention scheme beyond the end of June, otherwise it will become in effect become a scheme that just delays redundancies.
Thirdly, I should like to ask about Britain’s future debt levels, which will shortly stand at 95% of GDP. Coronavirus could well cause a reduction of 10% in our GDP and there is evidence that a no-deal Brexit could add an extra long-term loss of a further 5%. How will the Minister respond to this and does he accept that a no-deal Brexit is not in this country’s economic interests.
In conclusion, I have two further points. Will the Minister undertake to look at the merits of municipal bonds, which could help in the current situation, and might the Government consider allowing the state to take a bigger share of land value uplift when planning permission for housing is granted? If they did, I think that would help the public finances.
Baroness Bennett of Manor Castle (GP)
My Lords, the noble Lord, Lord Howard of Rising, commented that, given the context of this debate, it was surprising to see 22 speakers for it. However, as the noble Baroness, Lady Falkner of Margravine, and the noble Viscount, Lord Trenchard, said, there is a great hunger to make a democratic contribution to the nation’s discussion now, and that is why we are taking this opportunity.
The historical framework in which we are conducting this debate is both useful and informative. There is an EU requirement for member states to avoid excessive government deficits. Of course, in the age of Covid-19, what is considered excessive is changing very significantly. Behind this is something that is certainly often wheeled out in British political debate. It is known as the household fallacy—the idea that the national budget has to be managed as though it were a household budget, so that the pennies in and the pennies out have to match up. That was used to justify the ideological approach and the philosophy of austerity, which the noble Lord, Lord Hain, said was doing so much damage not only to our society in terms of poverty and inequality, but also to our preparedness to deal with the awful shock of the coronavirus. Does the Minister agree that the fallacy of household management being equivalent to national economic management is now dead, and can he assure me that the Government will not revive it?
As many noble Lords have said, we are in a huge phase of restructuring. I would like to quote from a letter to the Financial Times from Church Action for Tax Justice. It stated:
“The social contract is now being renegotiated.”
In a press conference on 30 April, the Prime Minister said that he has never liked the term “austerity”. Can the Minister tell me that it is not just the term that the Government do not like, but that they have abandoned the whole approach? Will they use their financial position to rebuild a better world, rather than going back to where we were?
As many noble Lords have said, this debate has to be considered in the context of Brexit. I want to congratulate the Government on an issue that I was pushing on at the beginning of March and was rebuffed about. I said that I believed that we are now signing up to something akin to membership of the early warning and response system for health in Europe. On this, it would seem that the Government agree that co-operation and working together makes sense. However, we are fast approaching an enormous challenge as regards the environment, agriculture, aviation and fisheries. In the context of Brexit, we have to set up whole new systems. Coming back to where I started, how can we do that democratically when it is so difficult for full democratic debate to take place in your Lordships’ House and elsewhere?
Baroness McIntosh of Pickering (Con)
My Lords, I welcome this debate. I found my noble friend Lord True’s introduction extremely interesting. I hope that the Government will commit to comment annually on their convergence programme in the form of a similar report. I will focus on where we are as measured by government deficit and debt, the long-term interest rate and exchange rate fluctuations. I will also look at—not just in the way that the noble Baroness, Lady Bennett, has done—the extreme challenges coming up, for Defra in particular, of food supply, environmental protection, global warming and climate change.
This week, we are celebrating the third anniversary of delivering competition in the provision of water supplies to business customers. One of the unintended consequences of Covid-19 has been that many businesses are simply not operating and are therefore not in a position to pay for their water supply. It is a matter of great regret and sadness that there will, undoubtedly, be potential for the failure of a number of water companies. The legislation at the time did not tackle the problem of exiting the sector. Ofwat is committed to looking into this, but possibly not before 2021. In addition to the significant economic disruption which has already been identified in the reports to which my noble friend Lord True referred, there are other consequences, unintended and unforeseen, of which the Government might wish to take note.
I will also reference the Financial Times. In an article in early April, the Governor of the Bank of England pledged not to slip into permanent monetary financing of government policy. He went further, stating that the central bank—the Bank of England—would not engage in permanent monetary financing. In his opening remarks, my noble friend specifically outlined the Government’s Covid-19 expenditure, which has continued, and indeed grown, since the Budget earlier this year. What measures have the Government identified, and intend to take, to support businesses and individuals, if—as in relation to business failures in the water sector —they require such support beyond the period to which my noble friend referred?
Viscount Chandos (Lab)
My Lords, the Government’s assessment, the Minister and many other noble Lords who have spoken this afternoon acknowledge the certainty of a very high—possibly record—level of deficit this year, of over £200 billion. As the noble Baroness, Lady Northover, has argued, it is very uncertain that the recovery will be as swift as many people hope, and possibly not as swift as the OBR is assuming. Against this background, the Government must not fetishise the level of deficit, based on economic illiteracy, unlike the devastating period since 2010, as my noble friend Lord Hain has highlighted. There should be a gradual glide path of reducing deficits, but with a prioritisation of essential public expenditure.
We must of course look for increases in tax. Does the Minister agree that there is overwhelming evidence that those increases in taxation should come on capital and, in particular, that the natural time for that is when capital is transferred between generations, both in life and on death?
The single most important factor in economic recovery is the earliest possible introduction of a vaccine, as has been so cogently argued by Sir Jeremy Farrar, the director of the Wellcome Trust. I welcome the UK Government’s commitment, as part of the global effort, to the funding of accelerated research and the production and distribution of vaccines, as well as of therapeutics and diagnostics. The Wellcome Trust’s COVID-Zero initiative is encouraging global business and philanthropic contributions, and it is to be welcomed.
I have one question for the Minister in this respect. Although equality of access to vaccines is vital to our national interest, can he confirm that the funding that we are committing does not come from DfID’s ODA budget and will not be taken as part of our 0.7% commitment to international aid under the international development Act of 2015?
Baroness Kramer (LD)
My Lords, I shall begin by picking up a point made by my noble friend Lady Northover and reinforced by the noble Viscount, Lord Chandos: this is not going to be a V-shaped economic recovery. There will not be a rapid bounceback to the normality of pre Covid-19. The noble Lord, Lord Birt, was very clear in describing the global crisis that has occurred and the impact on developed and not-developed economies. The OBR took none of that into consideration when it put together its forecast. The challenge for the Government now is to prevent an L-shaped economic disaster. They can do that, but only if they take the right actions.
Much of this debate has underscored that there is overwhelming support for the Government’s willingness to pour money into minimising the damage to the UK economy, and I applaud that. But the money needs to get into the hands of businesses, and we have a pipeline that remains stuck. The banks were always going to be a problem. The CBILS original framework programme has £300 billion for support for companies, but something like only £4 billion, £5 billion or £6 billion has actually been released. The Government need to redouble efforts to bring in alternative lenders.
As the economy opens up again—my noble friend Lord Shipley made this point—support for businesses cannot be stopped at a sudden cliff edge. The furlough scheme in particular will need to be pulled back gradually, or even firms with a viable future will make many workers permanently redundant because they do not have the cash and they do not want to take on additional debt. Frankly, neither our economy nor our society can afford the long-term unemployment of so many people. I recommend to the Government the “safe to return to work” scheme proposed yesterday by a number of my colleagues.
Even under an optimistic scenario, many people will not have a job to go back to. Self-employment will be an important route for them. As we go into rebuilding the economy, innovation will be key, and independent contractors are vital in driving innovation. We need this Government to stop presuming that self-employment is primarily a tax evasion scheme. They need to understand the critical role of self-employment and to provide a fair framework for future self-employment that engages with paying tax, which should not be avoided, and provides self-employed people with proper employment rights, or recognises where they do not have those rights.
We have had too much change during this period of Covid for the economy to return to the shape of 2019. This is our opportunity, as well as our responsibility, to build a new economy. I believe the Government’s dilemma is how much to let market forces decide the shape of that new economy, and how much the Government themselves and the public at large shape that economic change. I argue that the public now have little tolerance for a capitalism that does not embed social responsibility. There is a new respect for low-paid workers, a new understanding of the privations of being on benefits and a deeper admiration for so many of our public services. The public will also not forgive any Government who ignore the need to avoid future disasters. That includes pandemics, of course, but I put climate change into that category as well. I believe the public now understand the need to prepare, plan and act. We need a green recovery.
I also join those who feel that the Government cannot play fast and loose with fiscal management. The noble Baroness, Lady McIntosh, touched on some of these points. She made it clear that the Bank of England will not endlessly print money. My noble friend Lord Purvis and others underscored that debt can be a burden that we have to deal with. I hope there is not an implication in the statements of the noble Baroness, Lady Bennett, that we can simply build public sector net debt constantly and continue to carry it, no matter its level.
So far, this Government have treated tax increases as anathema. Some people had suggestions of taxes that could potentially be increased, but the underlying principle that it should be the broadest shoulders that carry those increases is surely something we all ought to be able to agree on, even if we spend time discussing the exact shape of that.
This is a time of global crisis. It is a truism, but we all hang together or we all hang separately. If we need time to work out our relationship with the European Union, we need to take that time. If, within the timeframe of the year end, we cannot negotiate decent rollover free trade agreements or new free trade agreements with countries that are all preoccupied with Covid—they may have intended to negotiate rapidly with us, but that has to be down at the bottom of the list for most of those economies today—surely we ought to ask for the additional time to allow that to happen. The point my noble friend Lord Purvis made was so overlooked, certainly by the Minister, and by the noble Baronesses, Lady Noakes and Lady Deech. All the new free trade agreements, even if they were to come on tap—and remember that they are embedded in the OBR forecast; the assumption is that they will be negotiated successfully —make nothing more than a marginal contribution to our future GDP and growth.
I argue that if Covid teaches us anything, it is that we have to build co-operation, not nationalism. I heard that strongly from the noble Lord, Lord Liddle. The point was made by the noble Baroness, Lady Falkner, who underscored that our economic future is always tied into the economic success of the European Union as our major market.
I was troubled by the number of times the noble Lord, Lord True, used the word “own”—it was “own” and again “own”. The noble Baroness, Lady Noakes, picked up on this so much. If we all think “own”, and that is the framework in which we operate, tragedies such as Covid will have huge, long-term, undermining consequences—not only for our economy but for the global economy. We cannot exempt ourselves from that just by focusing on “own”.
Lord Tunnicliffe (Lab)
My Lords, a number of noble Lords have called this debate surreal, ludicrous and “Gilbert and Sullivan”. As Treasury spokesman for the Opposition, I must apologise for causing it to happen. We have found year on year that this debate comes at a useful time, and we can use it to discuss the whole economy. Noble Lords did not have to volunteer for this debate if they did not think it was useful.
The debate has, surprisingly, involved quite a lot of concern about Brexit, which has been the preponderant theme. There has been much talk about how wonderful and invigorating it might be, but overall very few feel that Brexit will be positive in economic terms. With Covid-19, the problems of negotiating it are really quite frightening. Conversely, the need to co-operate with our neighbours in this crisis is most important.
There has been discussion on this, and the Government have restated their commitment to leave the Common Market and end the transition period at the end of December this year. I, like many others, feel that this would be disastrous. The idea that we can negotiate a sensible deal in this time is unreal. The only real probability of leaving on 31 December is that we will leave without a deal at all.
There has been considerable debate about the economy, but it is unfortunate that there has not been more concentration on what I would loosely call the economic infrastructure of the country. We have to worry about saving companies, both the SMEs and the strategic sectors such as aviation and steel that, once lost, would be very difficult to rebuild. The whole task of the future has to be much more holistic than we have seen so far. I agree with the number of noble Lords who have said that we should not aim to go back to where we were; we have to pursue policies which are different and more holistic and which involve considerable innovation. We cannot assume that we will enter another devastating period of austerity, as we have had since 2010.
Turning to the technicalities of the Motion, we have to submit a statement to the EU that was circulated to us yesterday—the 2019-20 convergence programme for the United Kingdom. However, as I understand it, all we are formally approving is the input into the document. The document comes from Budget 2020—HC 121—and the two OBR documents.
I turn first to the Budget half of this. It is no longer credible. Great chunks of the Budget will not happen, in terms of both revenue, which will be damaged severely by the virus, and the expenditure that has been necessary to make sure the economy does not collapse. The virus and the Chancellor have changed things. We support what has been done so far, but it is becoming clear that problems with the design and performance of many of the existing programmes are reducing their take-up. The efficacy of these programmes will be essential in the dealing with the impact of the crisis on jobs and incomes.
The Labour Party has three tests for the economic response to the coronavirus: keeping people in work, getting cash to struggling businesses, and preventing additional poverty through changes to social security. We believe that international co-ordination needs to be rapidly increased, with the Treasury leading on extensive co-ordination with the IMF, the G20 and EU policymakers. It was good to see that a global conference was recently held on these issues, but unfortunate that the US and China did not take part. It will be interesting to know what further plans the Government have to pursue this sort of conference.
We call on the Government to act urgently to protect jobs and incomes by preventing even more people being made redundant, by acting on those employers who continue to refuse to furlough affected workers. We need to fix blockages in the business loans scheme so that businesses can access the support that they desperately need. The bounce-back loans are clearly a first step but there is a considerable gap in those schemes, with the larger loans being much more difficult and, it is feared, not arriving in time. We need to clarify urgently the situation for those currently excluded from the Government’s self-employment and furlough schemes.
We should turn universal credit advances into grants and consider additional changes to improve universal credit. We should make all workers, including the low-paid, eligible for statutory sick pay and increase its level. We should spearhead international co-ordination to prevent worldwide spillovers in financial systems caused by the crisis. We should make public the proposed exit strategy to ensure that economic measures remain appropriate in protecting the long-term future of business and workers. It is the long term we need to worry about, as well as the short term. Finally, we need to reflect on the fact that key workers’ hourly wages are 8% lower on average than those of other employees. As we recover from this pandemic, we must ensure that key workers are never again left overlooked and underpaid.
Turning back to the Budget, while I accept that the issues have inevitably changed, I would like to be assured by the Minister that the spending parts of the Budget designed to take us out of austerity will still take place. The Government announced a £27 billion programme with unprecedented investment in urban transport, including £4.2 billion for a five-year integrated transport settlement for eight city regions, on top of £1 billion allocated to shovel-ready transport. There were also commitments to funding a shared rural network, with £5 billion for a gigabit broadband rollout in the hardest-to-reach areas, record funding of £5.2 billion for flood defences between 2021 and 2027, and a £10.9 billion increase in housing investment to support a commitment to build at least 1 million new homes by the end of the Parliament. The Government are also investing £1.5 billion in new capital spending for further education colleges and £2.5 billion for a national skills fund. All these things are in the Budget. Can the Minister assure me that they remain commitments and will be delivered as part of the end of austerity, in our looking forward to a brighter future?
Lord True
My Lords, it is customary to say that a debate has been very wide-ranging; this certainly has been that. One thing that has come out of this outstanding debate—many who spoke put forward very fruitful and interesting ideas—is the question of accountability. It was first raised by my noble friend Lady Noakes, but the noble Baroness, Lady Bennett, and my noble friends Lady McIntosh and Lord Trenchard all referred to the difficulties in conducting parliamentary business and scrutiny in the present circumstances. As I said earlier in response to another Question, it is not for me to manage the detail of the arrangements that are put in place by the House authorities and which are agreed through the usual channels. There is certainly no lack of willingness on the part of the Government or Ministers to face Parliament and answer to Parliament on such questions. As has come out forcefully in the debate, these are unique and exceptional circumstances, in which we are forced to operate remotely in this way.
Of course, I share the hope of all those who spoke that, in time, it will be possible to relax the constraints on the management of our business so that accountability will not only continue but be strengthened. I note that it is certainly not easy to respond to a detailed and complex debate from one’s back room with no access to the Box or information. I assure all noble Lords who have spoken that where I am unable to answer detailed questions in detail, we will seek to ensure that such answers are given.
There was a dichotomy between noble Lords on both sides of the argument, if there are two sides to the argument. Some were impatient that we were still having this debate, and some felt that it was a signal that we needed to maintain and continue our institutional links to the European Union in some way. That divide in and difference of opinion ran through the debate. We are obliged to have this debate and provide this information to the Commission under our treaty obligations. It is certainly not the United Kingdom’s position not to carry out the obligations into which it has entered.
It is true that, by the end of the year, we will be a fully independent country; this will happen regardless of what occurs in the negotiations ahead. It is not true that this in any sense reflects, as the noble Lord, Lord Liddle, said, a hatred of what the Prime Minister always rightly calls our European friends. We are, and always will be, a European nation and those nations always will be our friends. I repudiate the view that there is hatred towards any other country or people in the European Union. We are looking for a relationship that is grounded in precedent and respects the autonomy of decision-making on both sides. We have not asked for a special or bespoke deal.
Indeed, our proposals build on the EU’s original offer of a Canada-style deal and reflect the type of free trade agreement that should be entirely achievable this year between sovereign states. The precedents are based on previous deals that the EU has done. In no way is that vision incompatible with having a close relationship with the EU. We will continue to co-operate with the nations of the European Union, as we are doing on coronavirus, and with a wider family and comity of nations. As was referred to in the debate, only this week my right honourable friend the Prime Minister initiated international action in the face of the virus.
The progress of the negotiations was referred to by a number of noble Lords. We have had two full and constructive negotiating rounds, with a full range of discussions covering all the issues. We have made it clear that we are determined to regain our independence but that does not in any way reduce our commitment to high standards in all areas. I assure those noble Lords who referred to wishing to see a better world after we come out of this crisis—I share that aspiration—that our commitment is to high standards. No matter what happens, the United Kingdom will continue to champion high standards for products and in human rights, as well as for many other important principles.
However, we will not accept a relationship that restricts domestic democratic debate or enforces the supremacy of EU law—here I agree with the noble Baroness, Lady Deech, and my noble friends Lord Howard of Rising and Lady Noakes, who were among those who spoke on this.
There is promising convergence, and there is no reason why progress should not continue in the core areas. There is progress on a free trade agreement, for example on goods, services and trade, and also on related issues such as energy, transport and civil nuclear co-operation. However, as some noble Lords acknowledged, there are differences of principle in other areas. For example, we will, frankly, not make progress on the so-called level playing field and the governance provisions until the EU drops its insistence on imposing conditions on the UK which are not found in other trade agreements and which do not take account of the fact that we are an independent coastal state. We now need to move forward in a constructive fashion, and we look forward to negotiating constructively in the next round, which begins on 11 May.
A number of speakers touched on the question of extending the transition period. As I said in my opening speech, the Government’s policy on this remains unchanged—as a number of noble Lords asked that it should. Others asked that it should not, but it does remain unchanged. Our view is that extending the transition period would simply delay the moment at which we achieve what the British people asked for, namely economic and political independence of decision-making. It would prolong the negotiations and thereby also prolong uncertainty for businesses and citizens alike. As was pointed out in the debate, it would also mean making further payments into the EU budget.
The coronavirus crisis has demonstrated that nation states will take and use the freedoms afforded to them to make the best response to the conditions that appertain in their own nations at the right time and in the right way. That does not mean that international co-operation and exchange of opinion does not remain important.
The underlying theme of this debate has been that the coronavirus pandemic is the greatest challenge that we have faced in decades. It is certainly true that the changes that have come upon the Government—specifically, on the economy and the country—since the emergence of coronavirus have obviously meant a dramatic reappraisal and response to the conditions that were in place at the time of the first Spring Budget. I welcome the general support that there has been for the action that my right honourable friend the Chancellor of the Exchequer took in the early stages of this crisis.
The noble Baroness, Lady Kramer, made some good and reasonable points on the need to encourage innovation and support, and the importance of self-employed people. She also referred to perceived difficulties with the Coronavirus Business Interruption Loan Scheme. The House will have seen that the Chancellor of the Exchequer responded to that by introducing it for the smallest businesses. I agree with the noble Baroness and the noble Lord, Lord Birt, that the unique range, variety and difference of small businesses is something which is sometimes hard for us all to grasp. They are absolutely fundamental. My right honourable friend has responded with the bounce-back loan scheme which is already proving to be swifter and is responding very well to the demands of many small businesses. It is no source of apology or shame that, once an unprecedented measure is introduced—with the best of good will and with the aspiration that we will do whatever it takes to bring British business and the British people through this crisis—it is found in the course of events that improvements and modifications can be made to the scheme. The introduction of the bounce-back scheme is such a thing, and I can assure the House that the Chancellor and the Government will keep all eventualities under review as the crisis unfolds.
Engagement with business was referred to by a number of those who spoke. Of course, the Government are involved in intense discussion with business and the trade unions about the ongoing response to the coronavirus crisis. That will also be true, of course, in relation to the ending of the transition period at the end of the year. We recognise the challenges that businesses are facing in light of the Covid-19 pandemic, and we remain determined to stand behind them at all times throughout this critical period. We know and recognise that responding to the pandemic is the principal focus for many businesses right now, as it is for the Government, but we stand ready to engage with and support businesses on the required changes for the end of the transition period in the coming weeks and months.
Noble Lords—including the noble Lords, Lord Livermore and Lord Hain, and the noble Baroness, Lady Quin—asked about economic analysis. They rightly referred to many challenges facing the economy, and the fact that new assessments will need to be made in the weeks and months ahead. Indeed, that is why, in relation to European developments, we will in time want to stimulate and capture the widest possible range of analysis from economists, academics, businesses and civil society. As has been announced, we will in time be throwing open the question to the wider analytical community to help inform the Government and the country with the widest possible range of models, data and perspectives.
The noble Lord, Lord Tunnicliffe, who was kind enough to speak to me earlier, asked some specific questions about infrastructure, as did the noble Baroness, Lady Quin, and the noble Lord, Lord Purvis of Tweed. Capital and infrastructure investment is and remains vital. I referred in my opening speech to some of programmes that the noble Lord, Lord Tunnicliffe, referred to in his speech. The Government intend to set out further detail of our plans, as well as our longer-term ambitions, in the national infrastructure strategy and in the comprehensive spending review in due course, taking our response to Covid-19 into account.
I do not know whether this is a Gilbert and Sullivan debate—I am not sure whether I am Gilbert or Sullivan in this matter—but it is certainly taking place in exceptional, unprecedented and fast-moving circumstances in which, as a number of those who have spoken pointed out, many of the forecasts made before Covid was heard of vitally need to be reassessed. That is why it is difficult to give precise answers to a number of the points that have been raised, but, clearly, the Chancellor of the Exchequer is watching the situation and will come forward with proposals.
There are some difficulties with this virtual system, but I will deal with one or two detailed questions that were raised. On the fiscal rules, referred to by the noble Baroness, Lady Falkner, the Chancellor of the Exchequer will address that point in due course in the manner that I have described.
The noble Lord, Lord Shipley, and the noble Baroness, Lady Quin, referred to the north-east. The Government’s levelling-up proposals remain a core objective of the Boris Johnson Government and they will continue to dictate and guide policy, whatever the circumstances in the future.
The noble Lord, Lord Shipley, raised a couple of detailed points—or at least he commended some tax ideas, as did the noble Viscount, Lord Chandos. I cannot make promises or commit the Government to follow any of the proposals, but they will lie on the record and no doubt can be considered by those who follow our affairs.
As one speaker said—I think it was the noble Baroness, Lady Deech—stuff happens, and this is peculiarly unpleasant stuff. It has made the timing of this debate doubly odd. I am sure that my Treasury colleagues will not thank me for saying this, but I had great sympathy with the aspiration expressed in the debate that this great House, while it has no power in the matter of finance, should have the opportunity to debate from time to time economic forecasts and the economic position of this country. If this particular prop is disappearing into history, I am sure that it is something that the usual channels will consider in the months and years to come.
In March, the Chancellor delivered what was recognised by many at the time as a historic Budget. It responded to the unprecedented health and financial emergency that we face, but it also set out to reduce our budget, preserve fiscal flexibility and invest in Britain’s future. As we emerge out of the coronavirus crisis and, as the Prime Minister has said, we start to fire up the engines of our economy once again, our view is that the economy will come back stronger than ever.
With the transition period coming to an end on 31 December this year—whether we have a Canada-type deal or an Australia-type deal—we will aim to write a new chapter for the United Kingdom and, echoing what was said in the debate, I hope that we will be a country that is not only stronger but fairer, and being independent and sovereign will not stand against either of those objectives. That is the basis of the convergence programme that we will present to the European Union.
I am very grateful to those who have spoken in the debate and for the spirit in which they have done so. On this basis, I am pleased to commend the Motion to the House.
Arrangement of Business
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
My Lords, the virtual proceedings on the Motion in the name of the noble Baroness, Lady Penn, will now commence. This is a time-limited debate and the time limit is one and a half hours.
I will first call the noble Baroness, Lady Penn, in the usual way. The Motion will then be moved. Then I will call each speaker on the list in the usual way. Each speaker’s microphone will be unmuted prior to speaking and returned to mute once their speech has finished.
Employment Allowance (Increase of Maximum Amount) Regulations 2020
Baroness Penn
That the Virtual Proceedings do consider the Employment Allowance (Increase of Maximum Amount) Regulations 2020.
Baroness Penn (Con)
My Lords, this legislation allows the Government to increase the employment allowance by one-third, giving over 1 million small and medium-sized businesses up to £4,000 off their employer NICs bills. Employers pay secondary class 1 national insurance contributions on their employees’ earnings above the secondary threshold, set at £8,788 this year. This is charged at 13.8% and constitutes the largest business tax by revenue in the UK. The employment allowance was introduced in 2014 to help businesses with the costs of employment and to encourage businesses to grow and hire more staff. It is claimed by over 1 million employers to reduce their employer NICs bill by up to £4,000 per year.
The Government recently restricted the employment allowance to smaller businesses with a national insurance contributions liability under £100,000. This ensures that valuable government support is targeted at those who need it most. The Government announced in the Budget that we would be delivering on our commitment to increase the employment allowance for smaller businesses from £3,000 to £4,000 from April 2020. Businesses have been able to access increased support since the start of the tax year.
Passing these regulations will legislate for this increase to the employment allowance. Over 500,000 eligible businesses will benefit from the increase by up to £1,000. We expect the average gain from this measure to be around £850.
The Government are committed to supporting our smallest businesses, and this measure achieves that; 95% of businesses benefiting from this increase are small and micro businesses. Increasing the employment allowance to £4,000 means that 65,000 more businesses will see their employer national insurance liabilities fall to zero. Since introducing the employment allowance in 2014, the Government have taken around 650,000 of our smallest businesses out of paying national insurance contributions entirely.
The Government are more determined than ever to support people and businesses. In the Budget we increased the national living wage by 6.2% to £8.72. Along with increases to the income tax personal allowance and the national insurance primary threshold, an employee working full-time on the national living wage is £5,200 better off compared to April 2010.
However, we are aware that by supporting hard-working people through national living wage increases, we also increase costs for businesses. Increasing the employment allowance helps businesses to meet this cost. Businesses will now be able to employ four, rather than three, full-time employees on the national living wage without paying any national insurance contributions.
This increase will cost over £2.3 billion over this Parliament. This is a significant tax cut, and it should be noted that in just four years the Government have doubled the value of the employment allowance.
These regulations legislate for a Budget measure already helping over 500,000 of our smallest businesses with the costs of employment. I beg to move.
Lord German (LD)
My Lords, I welcome the rise in the employment allowance from £3,000 to £4,000 because it will help many companies and charities, particularly at this difficult time. However, a number of issues stem from this change of policy that are worthy of examination in more detail, because they might have a negative consequence.
For the first time, as the Minister said, this allowance is being targeted. While there will be more for those within the scheme, there will obviously be less for the larger companies and charities that will no longer be eligible for the allowance for the first time and now fall outside the scheme. I would therefore be grateful if the Minister could confirm what the net financial effect of this change will be on the Exchequer. What is the impact, for example, of increasing the allowance this financial year by £445 million measured against the total of the allowances provided in the last financial year? The 2018 Red Book said that restricting the number of companies and charities eligible for the allowance would save the Exchequer £225 million in this financial year. Set against that, is the net effect of the change £220 million?
My second point relates to state aid. If I have understood it correctly, this allowance now falls within the ambit of state aid because the allowance is now a targeted rather than universal allowance. As a consequence, the restrictions on state aid come about because the allowance is largely targeted at certain groups of companies—those that make a national insurance contribution of less than £100,000 per year. This change has resulted in what might be described as some unforeseen circumstances. For example, companies within the scope of the allowance and in receipt of state funding for other reasons might find themselves affected. If a company exceeds the de minimis threshold of government funding, they breach European Union state aid rules—rules that we must stick to until at least the end of the transition period and probably well beyond. I will return to the future application of state aid in the UK shortly, but I will first explore the potential for companies and even charities to exceed the de minimis, although charities are of course excluded.
State aid rules determine that companies in the agriculture sector must not receive in excess of €20,000 of UK government aid. In the fisheries and aquaculture sector, that figure rises to €30,000, in the road transport sector to €100,000, and in the cover-all industrial sector, which covers virtually every other company, to €200,000. These ceilings are a cumulative total over a three-year period. Just for accuracy, I understand that the Government have now indicated an exchange rate figure of £1 equalling €1.1249 for the purpose of working out the ceiling figure. I hope that the Minister can confirm that exchange rate. That exchange rate would mean that companies could not receive the employment allowance if they had received government assistance amounting to £17,780 in the agriculture sector, or £177,794 in the industrial sector, over a three-year period.
Two matters arise from this. The first matter is the administrative burden on checking the amount of aid received and whether there is headroom for adding in the £12,000 employment allowance, which would be the maximum over a three-year period. The requirement to quantify amounts of state aid received could be difficult to achieve in practice, as where state aid arises in the form of a tax relief, it may not be as simple as identifying a gross figure which occurs in your accounting records or tax returns. Added to that is that those who are responsible for submitting the claims for the employment allowance may not be familiar with state aid rules and how they apply. In addition, the Government now require annual claims to be made for the employment allowance; relief will no longer be carried forward from one tax year to the next, as has been the case to date. Does the Minister recognise that this new burden poses some problems for companies? There is a danger, for example, that some companies might not bother to apply, given the level of paperwork that they will have to go into. I am sure that they would welcome some reassurance from the Minister on this.
The second matter I am very concerned about is state aid. Will the current support for businesses that are receiving it during this pandemic count towards the cumulative total for state aid? Apart from the grants to small businesses which we are seeing at the present moment, I am particularly interested in the payments that companies receive for furloughing staff. If these are to be counted, that could severely affect a small company’s ability to claim the employment allowance. For example, four workers on the minimum wage in an agricultural sector company who are now furloughed for two months could certainly tip the company over the ceiling level, or up to it, which would then rule that company out of seeking the employment allowance for three years. Similarly, a company in the severely affected hospitality sector that is furloughing most, or all, of its workers could also be affected. Add to this any other grant aid received because of the pandemic, and there is real potential for the ceiling to be approached or breached.
Since the employment allowance was created to stimulate employment, and given the Chancellor’s statement that he does not want to see a cliff edge or a surge in unemployment as furloughing comes to an end, I would be grateful for the Minister’s clarification on whether financial support during this pandemic counts towards the state aid ceiling, and, if so, what modelling the Government have done of the numbers of companies which would now reach that ceiling.
Finally, can the Minister confirm the Government’s intentions on the future of state aid? In August 2018, the Government said that, in the event of a no-deal Brexit, they would mirror EU state aid rules. Is that still the case? I have no doubt that this will feature in any deal to be done with the European Union, and indeed the matter of state aid within the United Kingdom is still to be resolved; as I understand it, that role is being passed to the Competition and Markets Authority. Whether we have a deal with the European Union or not, I think that state aid rules will still feature, and will probably mirror EU state aid rules. I would be grateful for the Minister’s comments on that matter.
Like many other noble Lords, I am anxious that the potential obstacles and hurdles I have outlined do not detract from the ambition of this policy, which is to promote jobs and job security. The employment allowance is very important at this very difficult time for companies. A fully functional employment allowance is one of the tools which can make the difference between an employee being let go at the end of this furloughing period or retained. This Government will have to do all they can to prevent that happening and to ensure that support is only gradually withdrawn as the financial health of companies improves. If it is withdrawn very suddenly, companies will certainly be looking at lay-offs rather than retention. I am sure the Minister will agree with me that the employment allowance and other support will be needed more than ever before, as this crisis comes to an end.
Lord Wei (Con)
My Lords, I add my support and welcome this measure, which, as has been said before, is incredibly important at this time, when many are worried about their job security and a global and national crisis is upon us. My questions are about whether it is enough. This measure was proposed as part of a manifesto by my party, the Conservative Party, not that long ago. But given the circumstances and what has transpired in these last few months, the world has changed tremendously and may never be the same again. I therefore have a number of questions about how this can be thought through, revised or built upon to meet the challenges that we face this year and in the coming years.
The living wage, which this is designed to complement, is certainly very welcome. Moving forward, however, the question is not, as it perhaps was last year, how we increase the wages of workers in an economy that is seemingly near full employment, but how we keep people in employment and support the process of work being carried on.
One of my questions, especially given the remarks just now about state aid, is whether this policy has been designed primarily for a different age—one in which state aid is driving what we are doing. Given that next year and moving forward we may have more flexibility about state aid, I wonder whether we should think about what we actually need this year and in the coming years, as we try to come out of these crises—both the health and financial ones—and design in a more integrated way not just this employment allowance policy but others relating to it.
Why are we focusing just on small business employment and not thinking about measures to support those in self-employment and freelance positions? Is there anything in this, or anything we can add to this, that would support the many freelancers out there—particularly in the light of the Government’s stance on IR35, which I am worried is slightly anti-entrepreneurship in its thinking?
While I welcome the measures to incentivise businesses to retain employees, I wonder whether we are limiting this, and whether our view of the world, which relies on millions of small businesses continuing to employ people, limits our ability to generate future employment through entrepreneurship and self-employment. Of course, we must not forget that much employment in this country is, for better or worse, with those larger businesses. My concern is that this measure, just at the time we need it, bypasses many of the larger employers out there, which literally right now are thinking about whether to keep on hundreds or thousands of employees.
Related to this question is the furlough. I am sure that there is, and will be, much debate and discussion about what we do with this quite expensive measure and how we avoid the cliff edge. I wonder whether the allowance—I would love to know what my noble friend the Minister and the Government are thinking on this—can be used to create financial incentives for employers to retain and even hire workers, at a time when we need people to carry on. Especially when restaurants and many businesses will be not full but empty, there will need to be some mechanism by which we enable people to continue to work and be supported, potentially financially, by the Government. I am not sure that the current furlough system—efficient as it has been built to be—necessarily solves this problem, because it will happen many months after the event. Could the employment allowance be redesigned and built into something that is more “business as usual”, using the systems that we have, to ensure that employers retain employees beyond the initial furlough?
I will make a final point about the general principle of charging NI. I know that, in previous years, there was discussion about merging our different taxes. NI seems a very obvious one. We ought to simplify the tax system and be honest with our citizens about what tax is being paid. There is a danger in using things such as this allowance on an ongoing basis in the long term: given all the allowances out there, it makes it even harder to unravel the system and make it simpler.
At the end of the day, if you level with people—whether they are freelancers, businesses or individuals—and tell them how much tax they owe, then try to simplify things to reduce the paperwork and the cost associated with collecting the tax, you may have a better system that will allow us to rebound as we move in to the next phase, with higher employment and fewer incentives to game the system. So, while this allowance is welcome to alleviate some of the pressures which employers are facing, do we now need to think bigger? This is not just about Covid and the immediate financial impact but how we can think longer-term about building a more resilient economy and a tax system that complements it. The crisis gives us a chance to think deeply, not just in a knee-jerk way, about what systems we need moving forward. What thinking—if any—has there been about simplifying the tax system and how does this work with it?
Finally, with Brexit coming, what are the plans to remove ourselves from the straitjacket of state aid? We are in emergency circumstances. Many countries around Europe are either not following the rules or have been given exemptions. Are we pursuing means by which our country can have greater flexibility to help our workforce and our businesses as we move forwards?
Baroness Anelay of St Johns (Con)
My Lords, I thank the Minister for her explanation of the regulations before the Virtual Proceeding today. Like the previous two speakers, I support the changes being made; they are a way of trying to incentivise business. However, I have a couple of questions for my noble friend about their potential impact on charities. Last Thursday, the House debated the impact of Covid-19 on the ability of charities to continue their valuable work. Noble Lords gave examples of how charities vary considerably —really widely—in their ability to gain funding, the number of their employees and volunteers, their turnover and in the specific area of activity that they focus on.
Large or small, they are all now facing huge financial losses incurred by the immediate loss of income during lockdown from charity shops and fundraising events. I do realise that the Government have already taken significant measures to reduce the impact of Covid-19 on the ability of charities to survive and function effectively, while also taking into consideration the wider financial consequences for the Treasury. My noble friend Lord Wei has just remarked on the fact that the proposals before us today were forecast in the Conservative Party manifesto, long before anybody thought that this appalling pandemic might be on its way.
As has been said already, these regulations increase the maximum amount of the employment allowance by £1,000 to £4,000. However, the regulations also change employment allowance rules in order to exclude employers whose national insurance contributions liability in the previous tax year was over £100,000. I note that the section “Impact on business including civil society organisations” does not refer to the possibility of losers among charities. Of course, regulations covering businesses cover charities. Do any of the larger charities in this country fall within the category of those organisations which will now be excluded from this new scheme by these regulations, having previously qualified? Did any charities take the opportunity to respond to the Government’s consultation, either directly or through a representative? If so, were those representations confidential or are they available for public view online?
I ask because the Government’s online section on this, headed “Detail of outcome”, is a very brief— I am being generous—three paragraphs, all of which are general in their comments. They do not mention charities, which is why I am pursuing this point. The change of course will be welcomed by those charities which qualify for this increase to £4,000. Have the Government calculated how many charities might benefit from that change?
I note that the consultation period on the regulations we are considering today was last summer, closing on 19 August, and the regulations themselves were made on 11 March and laid before Parliament on 12 March. That means they were in final form by the time the director-general of the World Health Organization announced on 11 March that Covid-19 was officially recognised as a pandemic. Have the Government received any further comments on these regulations since the start of the Covid-19 pandemic was recognised?
My noble friend will be aware that last month the OBR calculated that GDP would contract by up to 12.8% for this year as a whole, taking into account what we hope will be a bit of a bounce-back for the economy during the late summer and autumn. Accordingly, will the Government keep their position on the employment allowance regulations under review during the rest of this year, as the impact of Covid-19 on the economy becomes clearer and appropriate adjustments could be made?
I say that because I notice that in the explanation of the regulations it says, under “Monitoring and evaluation”:
“The measure will be monitored through information collected from receipts.”
It might also be valuable, therefore, to not only look at that but to receive further representations from charities which find themselves—unexpectedly now, perhaps—excluded from the opportunity to benefit from the regulations today. I look forward to my noble friend’s responses.
Baroness Neville-Rolfe (Con)
My Lords, as this is the first debate in which we have spoken together, I start by congratulating my noble friend Lady Penn on her appointment, and on starting her new career so well in the virtual Chamber. I must say that I cannot wait to be back on the red Benches, enjoying the repartee that makes Parliament famous everywhere—but every cloud has a silver lining.
I support these simple regulations. They increase the employment allowance paid without fuss through payroll software to businesses and charities which made employer national insurance contributions of less than £100,000 in the previous year. That, as we have heard, is up from £3,000 to £4,000. It is double what it was when the Conservatives introduced it in 2014, as my noble friend said. It is a targeted measure to help small business, the backbone of Britain, and small-scale civil society.
The Red Book for 2020 stated that it should help over 500,000 small operators, taking 65,000 out of employer contributions altogether—so less to pay and less red tape. HMRC research, which our wonderful Library unearthed in this lockdown, revealed that three out of four small employers who had claimed the allowance would recommend it to other employers. Even more importantly, as the economy recovers and small business eventually rebounds or new ones spring up, it would mean that a qualifying business could employ four full-time employees on the national living wage without paying employers’ national insurance. I note also, although it is not relevant to today’s debate, that there was a Budget commitment to introduce a national insurance holiday for employers of veterans in their first year.
On these occasions there is always some debate about those not covered by the allowance: bigger companies and charities, whose interests my noble friend Lady Anelay highlighted well; domestic and personal staff; and those operating under IR35 off-payroll-working rules. I am not going to carp about those, but I was pleased to see from yesterday’s committee report from the Deputy Speaker that the Economic Affairs Finance Bill Sub-Committee had concluded that IR35 had not worked properly throughout its 20-year history and that the Covid-19 deferral of plans to extend off-payroll changes to the private sector should be changed by legislation. I declare my interests in the register, in case businesses with which I am associated might benefit, but this seems to be a common-sense move—and, as my noble friend Lord Wei said, it must be entrepreneur-friendly.
The most important thing about the employment allowance is totemic: it backs small business and enterprise and keeps people working. Since 2010, that has been one of our greatest achievements. It has been particularly pleasing to see jobs created in the private sector bring dynamism and creativity, especially to sectors where we are strong, such as digital and tech, research-based start-ups, food and drink, entertainment and, of course, financial and business services.
To deal with Covid-19, the Chancellor has bravely introduced temporary support: furloughing, loans and his new bounce-back variant. However, I worry that millions of small businesses will be destroyed if we allow the lockdown to be extended for much longer. The Government’s messages, in creating fear, have been too successful. They urgently need to find the right language to explain to the British people that some risks must be taken with coronavirus if we are to head off a recession that will financially cripple the country for decades to come. It is no coincidence that there is no economist on the SAGE committee despite the impact of income and job loss on health and well-being.
May the employment allowance be a small flame of inspiration that we can build on as we work together to get out of the current crisis and as state rules become less bureaucratic and interfering when the Brexit transition period ends.
Baroness Burt of Solihull (LD)
My Lords, unlike my noble friend Lord German and the other speakers this afternoon, I do not know a lot about tax—I did not even when I was an entrepreneur. I hope that the House will forgive me if I say anything that is uninformed or naive to the initiated.
I am afraid that I was unable to get through to the recommended Treasury helpline. Apparently, it is not functioning; perhaps that could be checked out. So, for help, I phoned a friend—Rick, an accountant—who gave me a stark account of what life is like for small businesses under lockdown. I will return to this later, if I may. On the positive side, Rick told me that the employment allowance has been a lifeline for many small businesses, and that many a sole trader has taken on their first member of staff as a result, so the increase in the allowance of £1,000 to £4,000 in the current financial year is very welcome indeed.
Employment allowance was first introduced in 2013 and has been increased several times since. As I understand it, however, in the summer 2018 Budget the allowance was removed from businesses with an NICs bill of more than £100,000. This was scheduled to commence in April 2020. Can the Minister confirm that while this year, most small businesses will pay £1,000 less in tax, larger businesses will pay £4,000 more than they otherwise would have? Does she think that now is a good time to remove this help, albeit that it will come as less of a blow than it would have to smaller businesses? I look forward to the Minister’s response to the question put by the noble Baroness, Lady Anelay, about how charities are going to be affected. The Minister said that the cost of the employment allowance will be £2.3 billion, but how much will the Government save by not paying the employment allowance to larger companies and, indeed, to charities?
My next question, which is probably a naive one, concerns which categories of organisation will receive the increased allowance and which will not. The Explanatory Notes refer to some employers,
“charities and community amateur sports clubs”
being eligible. That strikes me as a bit odd. Community sports clubs are presumably constituted in a different way so that they do not fall into the same category as employers and charities. That is something I would really like to know the answer to, and prompts me to ask my next question. Are there other types of organisation paying NICs which will be excluded from the employment allowance? I appreciate that, knowledgeable as no doubt the Minister is, she is not a long way into what I am sure is going to be an excellent ministerial career and may not have the answers to all my questions at her fingertips. However, I would be grateful if she could write to me with her answers to anything that she cannot respond to today.
Finally, I want to return to my friend Rick and what he told me about the clients he had been ringing up to see how they have been faring during the pandemic. He said that owner-managers are faring the worst, principally because many of them have not qualified for the furlough scheme given that they are paid only through the profits they make. He said, “I feel like a doctor visiting an NHS ward full of terminally ill cancer patients and trying to assure them that they will be fine because help is on its way to save them, but knowing that it is not.” I believe that people should pay all their tax so I replied to him, “Well, they should have paid their NICs, shouldn’t they?” However, as a country we will be the poorer for it if we let these small businesses go to the wall. We will lose the VAT and corporation tax income they would have paid, not to mention the entrepreneurial jobs held by those who rely on them for their living, and of course who themselves pay tax. They will not be here to take risks and help drive the recovery. Will the Minister give some thought to this and speak to her friends and advisers in the Treasury to see whether anything can be done to help this category of entrepreneurs? We cannot afford to lose them simply because they chose the wrong category of employment status for themselves. Perhaps the Government can find some way of keeping them afloat.
Lord Tunnicliffe (Lab)
My Lords, I thank the Minister for presenting the regulations and I can assure her that we on this side will not oppose them. However, they raise a number of interesting points. The noble Lord, Lord Wei, said that they will have an impact, but perhaps we should think about their impact in a more holistic way over the longer term, because a much bigger issue is the long-term effect of the coronavirus outbreak.
I am particularly concerned, as were the noble Baroness, Lady Burt, and the noble Lord, Lord Wei, about the impact on the hospitality and leisure sector. It is clear that it will be one of the last sectors to recover, but it plays an incredibly important role in our society. It creates good jobs and is a great source of pleasure for many people. It is therefore important that the Government bear the sector in mind and take a rounded approach. They need to make sure that the businesses operating in it do not go bust so that they can recover and thus provide pleasure for people, as well as employment.
I also regret that these regulations, which cost about £450 million per annum, come with no analysis of the benefits. I checked with the appropriate contact named in the Explanatory Memorandum and was assured that the Government do not have an estimate of how many employers might take on more staff because of this measure.
Finally, it seems to me that the scheme must have problems with respect to fraud. It is important that the Government have thought this through and have appropriate mechanisms to ensure that fraud is deterred. With those few comments, I repeat that I have no objection to these regulations and wish them well.
Baroness Penn
My Lords, I am very grateful for the consideration of these regulations and for the points noble Lords have raised. The noble Lord, Lord German, and my noble friend Lord Wei asked several questions on state aid. I can confirm that the majority of support announced by the Government in response to the coronavirus pandemic is not state aid and, specifically, the Coronavirus Job Retention Scheme is not state aid.
On exceeding the de minimis tax limit for state aid, we undertook consultations with external stakeholders, representatives and the devolved Administrations, and they provided no evidence to suggest that large numbers of agricultural businesses will lose access to the employment allowance because of state aid rules.
The bureaucracy of administering this allowance was also raised. I reassure noble Lords that the allowance will be applied automatically to businesses. The Government will write to those businesses to inform them that they have been in receipt of state aid.
There were also questions about the future of state aid more generally. I shall not go into huge detail in this debate, but the Government have negotiated a deal to exit the EU that includes the transition period we are currently in until December 2020, during which we must adhere to EU state aid rules. After that transition period, we will develop our own separate, independent policy of subsidy. We will have a modern system, supporting British businesses in a way that fulfils British interests.
On the restriction of this allowance to focus on small businesses and smaller employers, my noble friend Lady Anelay stressed that this impacts on charities as well as businesses. I can confirm that the net effect of the restriction to small businesses and the increased allowance is a more generous system. Our estimate is that it will be more generous by around £220 million per year. I reassure my noble friend Lady Anelay that 93% of eligible businesses, including charities, remain eligible for the employment allowance following the reform to restrict it to smaller businesses, organisations and employers.
I shall also address my noble friend’s broader point about the pandemic’s impact on charities. The restriction to the employment allowance announced in 2018 and the more generous increase in the allowance to which these regulations refer were announced before the full impact of the pandemic had been felt. Indeed, we still do not know what that full impact will be. We will continue to keep under review all the measures needed to support businesses and charities at this time. As my noble friend will know, we have announced a £750 million package of support specifically for charities during this pandemic.
Several noble Lords raised the question of the self-employed. The employment allowance is claimed against employers’ NICs only and the self-employed have no equivalent charge unless they have employees, in which case they can benefit in the same way as other employers. The self-employed also benefit from the increase to the personal allowance announced in the Budget and the increase in the NICs threshold.
Several noble Lords encouraged the Government to consider the debate in the context of the pandemic and its impact on jobs and livelihoods. The Government are considering that all the time. I thank my noble friend Lady Neville-Rolfe for her comments and agree that this increase will stand as a vital support for businesses as we pull together to recover from this crisis. It was not announced in that context in the Conservative Party manifesto, but the reason for this focus on smaller businesses and for the allowance increase is precisely to encourage small businesses and organisations to employ an additional or extra person; this is rather than targeting larger businesses, where the difference made would be smaller.
On my noble friend’s points on lockdown, our action plan to beat the pandemic is the right thing to do but we know people are worrying about their jobs and incomes. The Government’s strategy is to reduce the infection rate, ease the pressure on the NHS and save lives. The First Secretary announced on 16 April that the measures would remain in place for at least the next three weeks. As such, the Government will be conducting a review of social distancing measures before 8 May. The Government share concerns that we should protect jobs and head off a recession. The Chancellor yesterday offered reassurance that there will be no cliff edge to the furlough scheme. We are working out the most effective way to wind down the scheme and ease people back into work in a measured way.
I hope my response has addressed most of the points raised by noble Lords. If there are any that I have not addressed, I will, as the noble Baroness, Lady Burt, suggested, be very happy to write to noble Lords.
These regulations make important changes. Small businesses play a vital role in driving the economy and creating jobs. By increasing the employment allowance by one-third, these regulations increase by £1,000 the support such businesses are able to receive. They take a further 65,000 small businesses out of paying employer NICs entirely and provide an immediate benefit to over 500,000 businesses. I beg to move.
Arrangement of Business
The Deputy Speaker (Lord Palmer of Childs Hill) (LD)
My Lords, the Virtual Proceedings on the Motion in the name of the noble Lord, Lord Greenhalgh, will now commence. This is a time-limited debate. As shown on the Order Paper, and unless any noble Lord objects, the time limit is one hour. I will call, first, the noble Lord, Lord Greenhalgh, in the usual way. The Question will then be put and I will then call each speaker on the list in the usual way. Each speaker’s microphone will be unmuted prior to speaking and will be returned to mute once their speech has finished.
Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020
(4 years, 6 months ago)
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Lord Greenhalgh
That the Virtual Proceedings do consider the draft Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020.
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con) (Maiden Speech)
My Lords, it is with a great sense of privilege that I have taken my seat in this House—the first Greenhalgh ever to do so. It is also with a great deal of trepidation that I appear before your Lordships by video to give my maiden speech at this extraordinary time for our nation. This is the first maiden speech by video in the history of the Lords, so my place in the Guinness book of records is assured, if nothing else.
My background and experience are, unashamedly, in local government, with 16 years as a councillor in Hammersmith and Fulham, of which I spent six years as leader of the council, and four years as deputy mayor for policing and crime—or DMPC for short—in London. Therefore, it is a privilege to be able to introduce this order on behalf of a fellow DMPC, for Greater Manchester, the noble Baroness, Lady Hughes.
I thank noble Lords and the staff of the House for making me feel so welcome. I thank in particular: the Leader of the House, my noble friend Lady Evans; my noble friend Lord Howe; my Whip, my noble friend Lady Bloomfield; and Garter King of Arms, who has traced my lineage back to James Greenhalgh, aged 47 in 1851—so more work to do. Finally, I thank my noble friend Lady Williams, my ministerial colleague in the Home Office.
The purpose of the Greater Manchester Combined Authority (Fire and Rescue Functions) (Amendment) Order 2020 is to improve the delivery of public services in Greater Manchester by driving greater collaboration and interoperability, and by bolstering accountability for the way in which those functions are exercised.
The Local Democracy, Economic Development and Construction Act 2009 allows, in certain areas of the UK, the devolution of a number of municipal functions. In 2017, the Greater Manchester Combined Authority (Fire and Rescue Functions) Order conferred responsibility for, and management of, the functions of the Greater Manchester Fire and Rescue Authority on the Greater Manchester Combined Authority. Therefore, those functions came under the authority of the directly elected Greater Manchester mayor, and arrangements were introduced to oversee the operational discharge of functions, with scrutiny of fire and rescue functions being added to the remit of the corporate issues & reform overview and scrutiny committee.
In 2017, police and crime commissioner functions were also transferred to the mayor and the role of the deputy mayor for policing and crime was established. The exercise of PCC functions is scrutinised by Greater Manchester’s police and crime panel. Devolution of the exercise of fire functions to the mayor, in parallel with devolution of the police and crime commissioner functions, has provided for greater direct accountability for both blue light functions under one individual in Manchester.
In July 2018, the Mayor of Greater Manchester wrote to the Home Secretary to request further changes to the governance arrangements for fire and rescue functions within the Greater Manchester Combined Authority. The mayor sought authority to delegate the exercise of the majority of those functions to the deputy mayor for policing and crime and to amend the scrutiny functions of the existing police and crime panel to include scrutiny of fire and rescue functions. The then Home Secretary approved the mayor’s request in September 2018.
The order before the House today gives effect to the mayor’s request by amending the Greater Manchester Combined Authority (Fire and Rescue Functions) Order 2017. It brings the exercise of police and fire functions closer together by allowing for the exercise of all delegable fire and rescue functions by the deputy mayor for policing and crime. There remain some non-delegable functions—namely those listed under Article 6 of the 2017 order—which remain the sole responsibility of the mayor. These include the hiring and firing of the chief fire officer, signing off the local risk plan and approving the annual declaration of compliance for the fire and rescue national framework.
To ensure that there are appropriate scrutiny arrangements of the exercise of delegated functions, the order also extends the remit of the Greater Manchester police and crime panel to include scrutiny of the exercise of fire and rescue functions, whether they are exercised by the mayor or the deputy mayor for policing and crime. To reflect this wider role, the panel will become known as the police, fire and crime panel.
This is a straightforward order that will improve the accountability and delivery of fire and rescue services in Greater Manchester. The order enhances transparency, augments scrutiny arrangements and should facilitate greater interoperability between blue light services, especially the Greater Manchester Fire and Rescue Service and Greater Manchester Police. It will provide a clearer line of sight for the exercise of fire and rescue functions, with delegable functions being exercised by the deputy mayor for policing and crime rather than a fire committee. This will make it easier for the public to know who is responsible for holding the Greater Manchester Fire and Rescue Service to account on a day-to-day basis.
It will also ensure that police and fire matters are scrutinised effectively and in the round by extending the role of the police and crime panel. This brings similar scrutiny arrangements to fire as already exist for policing. Crucially, by bringing together oversight of policing and fire under the deputy mayor for policing and crime, it will also help to maximise opportunities for innovative collaboration, foster the sharing of best practice and ensure that strategic risks are reviewed across both services.
The Kerslake report into the tragic Manchester Arena attack criticised the slow response of the Greater Manchester Fire and Rescue Service, which did not respond to the attack for nearly two hours and was therefore outside the loop. The report called for greater interoperability between the fire service and other blue light services and better multiagency working. This order takes important steps to do just that.
I am aware of recent collaboration in Manchester as part of the response to the Covid pandemic. I take this opportunity to thank the incredible fire and policing personnel for everything they are doing in Greater Manchester and the wider country. In Greater Manchester, nearly 250 have volunteered to support the NHS and front-line carers in response to the Covid-19 pandemic. They are a credit to themselves and the fire and rescue service.
I commend this instrument to the House and beg to move.
Lord Goddard of Stockport (LD)
My Lords, I first congratulate the Minister on an excellent virtual maiden speech. I did not realise that it was the first ever such maiden speech in the House of Lords—perhaps not the one he would have wished to make but one that people will recognise in these difficult times.
We may be from different parties, but I believe we have one or two similarities. He became leader of his local authority in 2016; I became leader of mine in 2017. He was deputy mayor for policing and crime in London; I was a vice-chair of the Greater Manchester Police Authority for a number of years. We have a saying up north: “Do they get it?” It is usually about people down south. I think that, with the noble Lord’s background in local government, he gets it. His history and knowledge tell me that. He might just be one of the good guys whom we can work with in government.
The first combined authority was set up in 2011 in Manchester. I was one of the 10 leaders who signed up for it. At the time, that local authority was made up of five Labour members, three Liberal Democrats and two Conservatives. Sir Howard Bernstein, chief executive of Manchester City Council, used to call me one of the “awkward squad”. Another member of the awkward squad was Susan Williams, now the noble Baroness, Lady Williams, and a Minister in the Government. It goes to show how far you can get if you probe, question, check, harry and stick to your principles. The noble Lord has an able ally in her for sure.
I broadly support the order, which I have examined in the Lords Scrutiny Committee, on which I also sit. There are questions around democracy but I believe my noble friend Lord Stunell will raise them, so my thoughts will be around the budget implications.
Noble Lords may be aware that, following the Grenfell fire and The Cube fire in Bolton, the Greater Manchester Fire and Rescue Service had to pause its programme for change and review the high-risk buildings programme and turntable ladders. No capital grants are now available for the fire authority, and the capital programme will now need to be funded from underspends and borrowings. Should further borrowing proposals come from the Mayor of Greater Manchester, Andy Burnham, can the Minister therefore give me an assurance that he and the Government will support that borrowing?
Perhaps I should declare an extinct interest, as I was a member of the Greater Manchester Fire Authority for about eight or nine years, and old habits die hard. We live in desperate times, and we will overcome them. The fire service has had desperate times: Grenfell, the 2017 Manchester bombing, and the IRA bombing in Manchester. The photograph that sticks in my mind is of that blast in Manchester, when everyone was running away from the fire and the explosion, while the firemen were running towards it. That is the essence of the fire authorities. They need our support, I hope the Minister will support them, and there will undoubtedly be budget pressures on them, so he can give support with that.
The combined authorities go from strength to strength. This is one of the final pieces of the jigsaw. I hope that when the jigsaw is complete and we get fully devolved government to Greater Manchester, we will see the benefits, so I support the order.
Baroness Wilcox of Newport (Lab)
I commend the Minister on his appointment and indeed on his historic virtual maiden speech, detailing his wide-ranging experience before arriving in the Lords. Alongside my noble friend Lord Kennedy, I look forward to working with him from these Benches in his latest role, and, as a former leader of a council myself, I welcome the first-hand experience in local government that he brings to the role, together with the knowledge and understanding of probably one of the most challenging and difficult jobs in government: being the leader of a council.
I also take this opportunity to pay tribute to council leaders across the United Kingdom, who have managed and continue to manage the practical delivery of so many vital services during this health crisis, and who are working tirelessly to ensure that their communities have the best possible public services available at this time. They are supported by the leadership at the LGA of Councillor James Jamieson, and at the WLGA by my successor Councillor Andrew Morgan, and the many officers in both organisations who have been exemplary in dealing with how local government responds to the pandemic.
I will mention local government funding at this juncture, and repeat my oft-quoted point that councils are not put in the same position during this decade as they have been during the previous one. The result of this pandemic will demonstrate that austerity was not a financial necessity but a political choice. The coronavirus has well and truly negated that model and has revealed the necessity of well-funded public services now and in the future in our society.
The statutory instrument before us today authorises the Mayor of the Greater Manchester Combined Authority to arrange for fire and rescue functions to be undertaken by the deputy mayor for policing and crime, which, in the best traditions of local government, allows decisions to be taken at the most appropriate level and closest to the people affected by those decisions. This move has precedent: it is in line with similar action taken in 2018 by the Mayor of London to create a deputy mayor for fire and resilience, after the mayor took on powers from the London Fire and Emergency Planning Authority.
This measure is supported, and Members on this side of the House pay tribute to the important work that both the mayor and deputy mayor of Greater Manchester have done on fire safety. However, I urge the Government to take much stronger, swifter action on fire safety across the UK and to end the continued cuts to our fire and rescue services.
Greater Manchester Fire and Rescue Service has seen its central government funding cut by £22.4 million in the last 10 years, amounting to a 35.9% fall over the period. Over the same period, Greater Manchester has increased its contributions to the GMFRS by an extra £3 million. This is at a time when the population of Greater Manchester is increasing and when the built environment is becoming increasingly complex, as development rapidly tries to cater to the increased need for homes and infrastructure.
This statutory instrument provides for the police and crime panel to have oversight functions in relation to the exercise of all those fire and rescue functions, and thus to have an extended remit. It is an opportunity for change, to make a more effective operational and governance model so that the services in Manchester can work more effectively and the level of scrutiny can be applied across both the police and the fire service by one membership. The city of Manchester has seen many triumphs and tragedies in its history; as it is one of the UK’s leading cities, it is of utmost importance that the most appropriate systems are in place to support the vital services that operate within the city region.
In Wales, we have the future generations Act, which leads our operational thinking on such matters. As the former leader of Newport City Council, I chaired the Newport Public Services Board, where public bodies addressed cross-cutting issues requiring a multi-agency approach. This helped to ensure that the emergency services knew what each other’s organisations were doing in terms of joint working. I trust that this statutory instrument will have a similar effect for the GMCA.
Finally, in tandem with these changes, what action, if any, are the Government planning to take to reverse the recent rises in average response times across fire and rescue services in both Greater Manchester and England? I thank the Minister for his letter, which I received today.
Lord Stunell (LD)
My Lords, I welcome the noble Lord, Lord Greenhalgh, to the Front Bench and to the House. I congratulate him on making an effective maiden speech in very difficult circumstances. He set out clearly his background and the contribution that he will make. I echo my noble friend Lord Goddard of Stockport in saying that he is joining a strong local government team here, alongside the noble Baroness, Lady Williams. We very much look forward to them defending local government inside the Government—as well as defending the Government in the House, no doubt. I look forward to not a virtual meeting but, in due course, a real meeting.
I thank the Greater Manchester Combined Authority for the briefings that it sent to me—and to other Members, no doubt—which outline some of the circumstances. At first sight, there is no doubt that this is a common-sense, tidying-up operation. It aligns the police and the fire and rescue service across Greater Manchester, which is definitely a good thing. It aims to produce a joined-up senior leadership structure to replace the one that was examined and criticised by the noble Lord, Lord Kerslake, in his report; it also aims to get a joined-up scrutiny function to go with it. I have no quarrel with that alignment. It will make those forces—the fire and rescue service and the police service—better able to co-ordinate their actions and to respond effectively in the face of major incidents, as they failed to do in the aftermath of the suicide bombing at the Ariana Grande concert.
I want to question the Minister on what might, at first glance, appear to be a minor and trivial part of this not very significant statutory instrument: the silent reduction in the capacity that there will be to scrutinise the fire and rescue service properly as a direct consequence of this statutory instrument. The Explanatory Memorandum tells the truth about the proposed new scrutiny process—of course it does—but it does not tell the whole truth. It says that:
“Provision is also included to give the Police and Crime Panel the authority to scrutinise fire and rescue functions in the Greater Manchester Combined Area.”
It certainly does that. It says what the new scrutiny arrangements will be, but it is silent on what the old scrutiny arrangements have been up to now in the fire and rescue service, and in that silence is the mischief that I want to comment on.
Let me fill in the gap for noble Lords. At present, by law, the fire and rescue scrutiny panel must be chaired by a member in opposition to the mayor’s party. The panel must be balanced in accordance with the pattern of overall elected party representation across the 10 constituent boroughs. As the Minister will know, this is very much in line with local government practice that scrutiny should be led by poachers and not gamekeepers; it avoids state capture of the scrutiny process and the subsequent reduction of scrutiny to token box-ticking. The chair of any scrutiny panel sets the agenda and can choose what to focus on and what to put to one side. In Greater Manchester, there are no directly elected representatives to hold the mayor to account. The scrutiny panels do that job, and they give some assurance to minority parties and dissenting voices that the difficult questions will be raised, and the truth published.
The problem with this statutory instrument is not that, in future, it proposes to combine the two scrutiny bodies; that is sensible. The problem is that the provision sets aside that existing assurance of challenge and inquiry, and substitutes for it the police and crime panel.
In the municipal year 2018-19, that body was made up of 10 Labour members and two co-opted independent members. No opposition members of any party served on that scrutiny body. Of course, those 10 Labour members will always behave with integrity and absolute objectivity in carrying out their scrutiny functions—one would expect nothing less from Labour councillors in Greater Manchester—but I put it to the Minister that compared to the existing situation that this statutory instrument takes away, he is proposing something that is inherently less satisfactory. In place of a multi-party scrutiny panel with an opposition chair, we will have a body made up of members of one party—the mayor’s own party.
How does the Minister see the robust challenge that is needed for major budgets and vital services, such as the police service and the fire and rescue service, being delivered by a model of scrutiny that can—and in 2018-19 did—produce a single-party body in charge of operating it? I will be interested to hear the answer. That is a function that must be exercised on behalf of all residents and all electors across Greater Manchester, which is very diverse. With the best will in the world, a body with such a narrow membership cannot do that as effectively as a more diverse and representative one.
Does the Minister agree that it would have been better to continue to require the joint panel to work on the same procedures and statutory requirements for membership of the existing fire and rescue service panel, rather than the closed membership of the existing police panel? In other words, given the choice of which way to amalgamate the two bodies, the Minister has chosen the one which produces the least accountability.
Unfortunately, as keenly as everyone now shares the Liberal Democrat passion for the devolution of powers and responsibilities from Whitehall down to local communities, the bit about people with power being held accountable for the exercise of that power has a lot less traction. Whenever it has been a 50:50 call, it always comes down in favour of less accountability, not more. The Minister may say that this is not a big step away from better scrutiny, but rather just a very small baby, and that there is no threat to anything here; perhaps he will say that it is an incidental consequence of a necessary reform—a fishing bycatch, or collateral damage. It is not. Somebody made the choice and, intended or not, that choice has consequences that could easily have been avoided if anyone in the decision tree had thought of doing so.
There is something strangely appropriate in this widening of the accountability deficit in Greater Manchester coming into force through a statutory instrument in your Lordships’ House—itself hardly an ideal mechanism for accountability. A Virtual Proceeding on a statutory instrument, where there is at present no opportunity to intervene to seek clarity or explanation from the Minister when he winds up, adds insult to injury. However, I have a feeling that the noble Lord, Lord Greenhalgh, with his local government background and understanding of these matters, will be able to address my questions and give me direct answers. Perhaps he will get his officials to reflect that, the next time that a 50:50 call on accountability lands on his desk, they should advise him to go the other way and enhance accountability at every opportunity—and not, by accident or design, to slim it down.
The price of freedom is eternal vigilance. Sometimes, the price of it is listening to me complaining about something quite small which has big implications. On this occasion, I fear that that vigilance was not exercised at the ministerial desk. Somebody blinked and we have an answer which is not the best that was available.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I join other noble Lords in congratulating the noble Lord, Lord Greenhalgh, on his maiden speech. As he says, it is a first of its kind. I look forward to our encounters together and, in particular, to when we can meet in person and debate across the Dispatch Box. The Minister has a record of service in local government on which he should be congratulated, serving as a councillor in the London Borough of Hammersmith and Fulham and, in 2006, as he told us, becoming the leader of that council. I know that authority quite well and, as the Minister knows, it has changed political hands many times. The Minister also worked closely with the Prime Minister when he was Mayor of London, and served as deputy mayor for policing and crime.
I wish the noble Lord well with his new responsibilities. He has some very big shoes to fill. He will be aware that the noble Baroness, Lady Williams of Trafford, the noble Viscount, Lord Younger of Leckie, and the noble Lord, Lord Bourne of Aberystwyth, have all carried out his ministerial responsibilities and are respected by the House. They all engaged positively with people in the House, and still do, and always worked to bring people together. If the noble Lord carries out his duties in a similar vein, he will undoubtedly be a successful Minister in the House of Lords.
I was never leader of a council, unlike the noble Lord, Lord Greenhalgh, my noble friend Lady Wilcox of Newport or the noble Lord, Lord Goddard; I was merely the deputy leader of Southwark Council. But like all other noble Lords, I am a big supporter of local government and local councillors, and I know what a great job they do and how much we should support them. I am always pleased when a member of the local government family takes on new and important responsibilities, and I look forward to working with the Minister.
The order before us is not, in my opinion, controversial and it has my full support. But before I get on to the order, I am conscious that yesterday was Firefighters’ Memorial Day. I honour the commitment of all firefighters and remember those who made the ultimate sacrifice by doing their duty, protecting others and saving lives. I join the Minister in his tribute to the whole fire service for the work it is doing in these challenging times to help us all.
The order allows the Mayor of Greater Manchester to make arrangements for the fire and rescue service to be delegated to the deputy mayor for policing and crime, and extends the role of the police and crime panel to include scrutiny of the fire and rescue function. It is clear that the strategic decisions will remain with the mayor, who is accountable to the police, fire and crime panel, and to the general public, for the exercise of these functions.
I am aware that the Minister is leading a review into the cost of waking watches. It would be helpful if he could update the House on that work when he responds to this debate. If not, maybe he could agree to write to us about where he has got to with his review.
The noble Lord, Lord Goddard, asked a number of questions in respect of reductions in funding and budgets in general. I endorse his comments and look forward to the response he will receive.
I also endorse the comments from my noble friend Lady Wilcox of Newport in her tribute to council leaders, councillors and the staff of local authorities, along with all public servants who are dealing with these unprecedented challenges for our country. We have been separated from our families and friends, but our communities have been brought together and we have seen fantastic work in the public and voluntary sectors that must never be forgotten.
In conclusion, I look forward to the Minister’s response to the points raised today and congratulate him again on his excellent maiden speech. As he said, it is a first of its kind. I also wish him well in his new responsibilities in both the Home Office and the Ministry of Housing, Communities and Local Government.
Lord Greenhalgh
My Lords, this order will help to deliver key outcomes that will improve the delivery of public services in Greater Manchester. I am hugely grateful for the insightful and helpful contributions that noble Lords on all sides of the House have made during this debate.
I will comment on the contributions made by noble Lords, starting with those of the noble Lord, Lord Goddard, and the noble Baroness, Lady Wilcox—I feel we can call ourselves the “former leaders of local government club”. The noble Lord, Lord Goddard, asked whether I would give a cast-iron guarantee to support the borrowing requirements when they come forward from the Greater Manchester Fire and Rescue Service. I cannot do that, but I give my assurance that they will be considered, alongside the comments he made about the need for this.
There have been huge budget pressures on the fire and rescue services, but noble Lords should know that, in the latest round of funding, a considerable amount of money was allocated specifically to these services: about £33 million, as well as some top-slice grant in the latest £1.6 billion for local government. In addition, we recognise that there is a real need to increase funding for the protection pillar of the fire and rescue services. There is £20 million of surge funding support to enable that to happen.
The noble Baroness, Lady Wilcox, raised the issue of the rise in average response times. My understanding is that fire and rescue services are measuring response times in three segments: call handling, mobilisation and driving time. Generally, call handling and mobilisation are speeding up or staying constant, and it is the length of driving time incidents that is increasing. I will write to the noble Baroness on the causes of this, but the latest reported increase was around one or two seconds.
The noble Lord, Lord Stunell, raised not so much the approach to this statutory instrument as the tidying-up operation that has potentially seen a one-sided approach to scrutiny. He clearly agrees with the idea of bringing together the scrutiny functions, but I note his points about the political make-up, and that this may have been avoided with another approach. It was certainly not the intention to reduce scrutiny, but it is far more effective to have a scrutiny panel that mirrors the executive. I am sure that, in due course, elections and the changes of democracy will enable that panel to change over time, as they so often do.
Finally, I thank the noble Lord, Lord Kennedy of Southwark, for raising the cost of waking watches. It is fair to say that this cost goes up the longer the remediation work on tall buildings with flammable cladding carries on. I have asked my officials to look at the very great differences in waking watch costs between buildings, to shine the spotlight of transparency. I am also aware of what many early adopter developers and social landlords have done to reduce waking watch costs, including the installation of evacuation alarms. Above all, I am pleased to say that there is huge cross-party support from the Secretary of State, the metro mayors, a significant number of council leaders in our metropolitan cities and 20-odd boroughs in London for the building safety pledge, which will ensure the continuation of essential building work on tall buildings with flammable ACM cladding during the Covid pandemic. I thank all noble Lords for their contributions.
I want to provide some more examples of the positive things we are seeing in Greater Manchester, having raised the issue of the report of the noble Lord, Lord Kerslake. I was actually wrong about the level of volunteering: I would like to put on record that apparently there are nearer 500 volunteers in Greater Manchester and I thank them for all they are doing—driving people to hospital, supporting the ambulance service and other things in the course of this pandemic. There are some incredible examples of collaboration in Greater Manchester between the fire and rescue service and the police; for instance, fitting target-hardening measures at homes that are at risk of fire, which has successfully continued even during the current lockdown. Multiagency training has helped partners involved in emergency response and it is envisaged that regular multiagency training, developed through a closer relationship with the districts, facilitated by the deputy mayor, will help to improve all agencies’ responses to large-scale incidents such as pandemics, flooding and fires. The third example is a fire plan which has been developed jointly with the Greater Manchester police and community safety partnerships. Community safety is a key priority and this pre-existing framework will help the Greater Manchester Fire and Rescue Service integrate an approach that supports vulnerable residents at a local level.
Today’s order will provide a clearer line of sight for the exercise of fire and rescue functions. It will make clear to the public who is responsible for which decisions and help them understand the governance process. Importantly, it will also help to ensure that collaboration is implemented more efficiently and effectively by bringing those functions together into one place so that best practice is shared and strategic risks are reviewed across both services. Cognisant of the statutory duty introduced by the Policing and Crime Act 2017 for the emergency services to collaborate, the GMCA recognised that allowing the mayor to delegate the exercise of fire and rescue functions to the deputy mayor for policing and crime would enable the deputy mayor to accelerate the pace of change, ensuring that collaboration is implemented, as well as interoperability across the blue-light services, more effectively and efficiently.
The joining up of policing and fire functions under the deputy mayor for policing and crime will enable quicker decision-making at the appropriate level. It also mirrors the arrangements for police, fire and crime commissioners who can delegate police and fire functions to their deputies. As I mentioned earlier, the need for better interoperability between blue-light services was made all the more compelling in light of the findings of the report of the noble Lord, Lord Kerslake, into the tragic Manchester Arena attack. A single individual overseeing both the fire and rescue and policing services is best placed to drive greater collaboration and interoperability between blue-light services.
In closing, the Government firmly believe that democratically elected mayors matter. Today’s order confirms the request of the Mayor of Greater Manchester and serves to clarify and improve governance arrangements for fire and rescue in that great city. I firmly believe that the order serves the interests of the people of Greater Manchester, and I commend it to the House. I beg to move.
Arrangement of Business
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, the Virtual Proceeding on the Statement will now commence. I will call the Statement and the Minister will repeat it in the usual way. I will then call the Front-Benchers and the Minister to respond. After that, we begin the period of Back-Bench questions, which has been extended to 30 minutes. I will call each Back-Bench Member on the speakers’ list to ask a supplementary question and the Minister to answer. Each speaker’s microphone will be unmuted prior to their supplementary question and returned to mute once their supplementary question has finished.
Covid-19: Department for Work and Pensions Update
Baroness Scott of Bybrook (Con)
My Lords, with the leave of the House, I shall now repeat a Statement made yesterday by my right honourable friend Thérèse Coffey, the Secretary of State for Work and Pensions. The Statement is as follows:
“With permission, Mr Speaker, I will make a Statement updating the House on the work of my department. I want to pay tribute to the civil servants in my department as well as to contractors and partners who have been working tirelessly to provide help and support to those in need. They are the hidden heroes for many people in this country. They should take great pride in their hard work and dedication to supporting people through these difficult times.
Since 16 March to the end of April, we have received over 1.8 million claims for universal credit, over 250,000 claims for jobseeker’s allowance and over 20,000 claims for employment support allowance. Overall, this is six times the volume that we would typically experience, and in one week, we had a tenfold increase. The rate for UC claims appears to have been stabilised at about 20,000 to 25,000 per day, double that of a standard week pre Covid-19.
I am pleased that my department is standing up to the challenge. We have redeployed a significant number of DWP staff, about 8,000 so far, and staff from other government departments, about 500 so far, to process these claims. Our payment timeliness for universal credit is running at a record high. We have also issued almost 700,000 advances to claimants who felt that they could not wait for their first routine payment, and the vast majority of these claimants received their money within 72 hours.
Where possible, and mindful of risk, we have also streamlined our processes. We will consider carefully learnings from this time in the response phase on whether any of them can be made permanent. We have also sought to make it possible for people to work from home and have already deployed 10,000 computers. We are now at a level of deploying 750 new devices a day to enable working from home and have added to the IT capacity for remote users.
However, where staff need to continue to work at the office, we are applying social distancing. From 17 March, we suspended all face-to-face assessments for health and disability benefits. We automatically extended awards for existing claimants that were due to be reassessed by three months and will undertake reviews or reassessments only when claimants notify us of changes which could lead to a higher payment. Any claim made under the special rules for terminal illness continues to be fast-tracked, it taking an average of six days to process these claims. From 24 March, jobcentres have not been open for regular appointments, but we have continued to offer face-to-face appointments in exceptional circumstances, when claimants would otherwise not be able to receive support. Claimants can continue to receive support over the phone or through their online journals. All local jobcentres have been turned into virtual processing teams, prioritising advances and the registration and payment of new claims. We have also been pairing jobcentres across the country to support each other with processing, fully using the capacity of our network.
This focus on the processing of claims has also meant that we stopped checking the claimant commitment regarding looking for and being available for work for three months. However, we want claimants to continue to look for work wherever they are able to do so. Ministers are working hard to ensure that existing vacancies can be accessed by people who have been made unemployed, and we will continue to support those people while they are waiting for the opportunity for work. We have created a new website to guide people, jobhelp.dwp.gov.uk, and we have 58,200 vacancies advertised.
While our IT systems worked, thanks to extensive work by the universal credit team, including our contractors, I know that some claimants experienced significant delays in verifying their identity. Identity checks are crucial in reducing fraud risk, so we worked closely with the Cabinet Office substantially to increase the capacity of the online Verify system. Average wait times are now below five minutes. Call volumes have also been extremely high, with over 2.2 million calls in one day at our peak. Recognising again the delays people were experiencing—or indeed not being able to get through at all—we turned this around with our “Don’t Call Us, We’ll Call You” campaign. A bolstered front-line team now proactively calls claimants when we need to check any information provided as part of the claim. This has been very successful in freeing capacity and reducing the time customers need to spend on the phone.
Regarding other operations of the department, while we have redeployed staff we have kept critical work ongoing in child maintenance and bereavement. We are monitoring our performance and will return staff to these areas if the response rate becomes unacceptable. On pensions, we have cancelled the pension levy increase, supported defined contributions through the job retention scheme, and worked with regulators to assist DB pensions and combat scams.
I think it is worth reminding the House of our financial injection of over £6.5 billion into the welfare system so that it can act as a safety net for the poorest in our society. We focused on changes that could be made quickly and would have significant positive impact. We have increased the standard rates of universal credit and working tax credit for the next 12 months by about £1,000 per year. We have increased local housing allowance rates for universal credit and housing benefit claimants, so they can now cover the lowest 30% of local rents. We also increased the national maximum caps, so claimants in inner and central London should also see an increase in their housing support payments.
I have been made aware that some councils have not made the adjustment in housing benefit, and my department is communicating with them all this week. Furthermore, across England we had already increased the discretionary housing payments by an extra £40 million for this financial year.
The 1.7% benefit uplift was implemented in April, ending the benefits freeze, and the state pension rose by 3.9%, as per the triple lock, reflecting last year’s substantial rise in average earnings. We have also introduced regulations to ease access to benefits. We legislated to allow access to employment and support allowance from day one of a claim. We relaxed the minimum income floor so that the self-employed can access universal credit more easily. We have also made it easier to access ESA by launching our ESA portal for online applications. We legislated to ensure that employees had statutory sick pay available from day one of sickness or self-isolation due to Covid-19. I remind the House that statutory sick pay is the legal minimum.
We will continue to look at issues that arise—for example, we are ensuring that maternity pay is based on standard pay, not furloughed pay levels—and will see what we can do quickly and straightforwardly to fix either unintended consequences or unforeseen issues. But it is not my intention to change the fundamental principles or application of universal credit.
A significant project that we have undertaken is to support MHCLG and the national shielding service by establishing the outbound contact centre. Furthermore, we use this contact centre to proactively contact the most vulnerable customers, who receive their benefits or pensions solely through Post Office card accounts. I want to thank the Post Office for helping us to support this group of customers. We have been able to provide contact-free cash payments by Royal Mail special deliveries. We were also able to signpost people to extra support from their local council.
I can also inform the House today that the DWP will stop any new benefit and pension claimants from using the Post Office card account from 11 May, as we prepare for the end of this contract. The uptake of accounts in the past year has been exceptionally low but, in any event, given that the vast majority of people using POCA already have a bank account, the cost of the contract is poor value for taxpayers. Existing customers who currently receive payment through the Post Office card account will see no change and will continue to receive payment into their accounts for the remainder of the contract period. We can use the HMG payment exception service for people who cannot access any bank account.
I want also to thank the Health and Safety Executive for its work on Covid-19. It is an arm’s-length body for Great Britain that is sponsored by my department. It has been doing crucial work with the Department for Business, Energy and Industrial Strategy and Public Health England to provide guidelines for employers to adhere to once restrictions can be eased. The HSE is working hard, along with local authorities, to enable work to continue safely in the sectors for which it is responsible. It has developed practical guidance and is enforcing the law where workers are exposed to unnecessary risk.
My department is standing up to the challenge of unprecedented demand for our services and we are getting support to those who need it. We will continue to work across government to help the nation get through this health emergency. I commend the Statement to the House”.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for repeating that Statement. I want to record our thanks to each member of staff working on the DWP front line for all they are doing during this crisis to process the unprecedented volume of claims that have been made.
I want to say at the outset how much we welcome each of the steps that the Government have taken to improve the welfare state to deal with this crisis, but the social security system that we had going into the crisis was a safety net with holes in it. I am glad that the Government have recognised the need to start shoring some of those up.
Labour has five proposals to enable the social security system better to respond to the crisis. The first is to increase legacy benefits. The Government have increased universal credit by £20 a week for this year, but those on legacy benefits such as JSA or ESA do not get that increase. More than 100 charities point out that this discriminates against disabled people. Can the Minister explain that?
The second proposal is to suspend the benefit cap. The House of Commons Library estimates that at least 18,000 extra families in Great Britain could be hit by the cap as a result of the increase in UC and housing help. That would take the total number of families affected this year to over 100,000. The cap affects not just big families; half of those 18,000 families have only one or two dependent children. More often, it is the high cost of housing. Ministers normally say, “You can escape the benefit cap by getting a job, working more hours or moving to cheaper housing”, but all those are impossible during this crisis. No wonder so many bodies, from the IFS to CPAG, are calling for the cap to be suspended. Will the Government do that now?
Thirdly, suspend the savings limit in universal credit. Anyone with savings of over £16,000 is banned from claiming UC altogether. That does not happen in tax credits, where the means test simply takes account of any income from savings. Why should someone who has put money aside for a housing deposit or is saving for a substantial item be completely frozen out of universal credit? They paid into the system when they were able to work, so should it not be there for them now? Will Ministers review those savings limits?
I have a brief question. Can the Minister tell me whether this would affect someone who is self-employed and who had a viable business that has collapsed since the Covid crisis? The Government have put back the date for paying tax. If you have that money sitting in your bank account, would it be treated as savings income and thus stop you getting universal credit?
Fourthly, remove the two-child limit. Ministers argued for this policy on the grounds that those who receive social security benefits should have to make the same family choices as those who do not. That was always a deeply flawed argument, but this crisis shows the absurdity of it. Some 2 million people have applied for benefits over the past few weeks. Do we really think that when, three years ago, some of them decided to have another child, they could possibly have imagined that a global pandemic would virtually shut down our economy? The policy is pushing ever more children deeper into poverty, so will Ministers please think about it again?
Fifthly, end the five-week wait for universal credit. I know that I go on about this a lot, but it is simply wrong that people have to wait five weeks for their money, or else they take a loan that will be deducted from future payments that will leave them with less to live on each month than the basic universal credit amount. That five-week wait has been the single biggest driver of housing arrears, short-term debt and food bank usage, so will Ministers act now either to end it or give grants instead of loans?
I want now to ask some specific questions. First, given that the noble Baroness, Lady Scott, is standing in for the Minister, I recognise that she may need to write to me in response to some of them. However, I would really appreciate some specific answers. First, she mentioned that the Government have now allowed maternity and adoption pay and maternity allowance to be calculated on salary rather than on furlough pay, which may be lower. Will they now backdate payments to women who have already had their payments calculated on their furlough pay rather than their full salary?
Secondly, universal credit disregards statutory maternity pay when it applies to the work allowance, but it does not do that for maternity allowance, which is the benefit paid to many low-income women. This means that a low-paid pregnant woman could be as much as £4,000 a year worse off. Will the Minister correct this?
The Minister went on to mention how people are struggling to get through to the DWP on the phone. She talked about the “Don’t call us, we’ll call you” approach? Can she explain that? If I want to call the DWP and I cannot get through, can I leave a message and will someone call me back? If so, on average how long will it take—or is it simply that the department will call me only if it wants information? People need help in the first place, and they ought to be able to get through.
This crisis has revealed two things. It has shown how unjust and unequal our labour market is, and it has also shown how our basic welfare state has been quite significantly eroded in recent years.
The Secretary of State told the Commons yesterday that universal credit was only there to help the poorest in society. I do not think that it is giving enough help to them. Our welfare state is meant to provide a safety net to support any of us who are hit by a crisis. Like the NHS, it is a means of pooling our risk because we do not know who will be affected by disability, unemployment or bereavement, or indeed by a virus. How many of the millions of people who have claimed universal credit of late ever thought that they would need help from the welfare state? We all know of people who have been paying in all their lives expressing shock at how low SSP is and how low benefits are, probably because they have heard Ministers claim for so long that the benefits system is far too generous—even though we know how really ungenerous it is for many people.
As the Government plan for the recovery and not just the immediate response, is the department looking at all of the recent learning and thinking about how best to use the system to address the inequality, poverty and insecurity which have been revealed by this crisis? I look forward to the Minister’s reply.
Baroness Janke (LD)
I thank the Minister for repeating the Statement and I would also like to thank the staff of the DWP for their commitment to answering and addressing the huge additional workload which is the result of the current crisis. What is clear is that, despite their hard work, there are now many people in desperate straits who are struggling to survive. Many people whose income has dropped to zero have been trying desperately to access money through universal credit to meet their daily needs. They cannot wait the required five weeks when they have no money and a family to feed. Equally, people with no income cannot be expected to pay back any emergency advance.
The two-child limit hits families with children hard and is a major factor in causing child poverty, which is now at 4 million and thus one of the highest rates of childhood poverty in Europe. The benefit cap seriously hits families with children, in particular the poorest. As the noble Baroness, Lady Sherlock, has just said, it affects people on low pay with insecure jobs. It is a major problem in the current situation for people who are on such very low incomes.
I would ask the Government to consider taking the following crisis measures to help those who are most in need. First, the initial universal credit payment should be sent after five days rather than five weeks, and the clawing back of UC advance payments should be suspended. The Government should suspend the two-child limit and the benefit cap for at least three months, subject to a further review. They should suspend all benefit sanctions and introduce an additional dedicated hardship fund via local authorities for people in urgent need who cannot access funds through universal credit. I look forward to the Minister’s response.
Baroness Scott of Bybrook
I thank both noble Baronesses. I realise that I am quite new to this, but they have a large amount of knowledge and experience. I will start with the five questions put by the noble Baroness, Lady Sherlock. The first was about increasing legacy benefits. If we had those in place now, the whole system would have been far slower than universal credit. We have looked at the people who are in most need and who need their benefits much more quickly. Much of the change has been to put money into those things, but we will continue to look at all other benefits as we move forward.
Suspending the benefit cap will not happen; the Government are not looking to do that. The savings limit is there because universal credit is to support those people who cannot support themselves. For the self-employed, the savings limits can be used for pensions or tax purposes. That might help some self-employed people who have to go into universal credit. The two-child limit has been discussed continually. The Government have no plans to change it. The policy ensures fairness by asking families getting benefits to make the same financial choices as people who support themselves solely through work. However, exemptions and safeguards are in place and I urge the noble Baronesses to look at those.
The five-week wait has also come up many times in the Chamber. About half a million advances have gone through already on the basis of 13 payments in 12 months. I think people are beginning to understand how the advances can be paid back. They are now being paid quickly—within 72 hours—so there should be fewer problems with people requiring food banks and such things, as referred to by the noble Baronesses. Councils also have emergency funds for anybody who needs help in those 72 hours; this needs to be better communicated.
The noble Baroness, Lady Sherlock, asked about maternity allowances. This was brought up in the other place yesterday. I will certainly make sure that she gets a full answer on this, rather than me trying to answer it. Maternity allowances are now paid on full salaries, not on furloughed ones, which is a good move. I do not know about the DWP on the phone, but I have heard good case histories of people who have been phoned by the DWP who were not expecting it but who were pleased to have had the call. So we probably do ring them, but I will get the noble Baroness an answer to her question.
I know that, from her background, the noble Baroness, Lady Janke, knows a lot about what local authorities can do to help people through these difficult times. I have answered the questions about the two-child limit and the benefit cap. Advancing universal credit to five days is important; I cannot add anything further.
Lord Balfe (Con)
I thank the Minister and the staff of the DWP for this amazing effort. We should really be loving not only the NHS, but the DWP. I am reminded during this crisis of the old saying that politics is about giving other people’s money away. There has to be a limit to how much we can spend. I would like the Minister to tell us, first, what is being done to advertise these 58,000 vacancies, because everybody who takes one is someone who is not reliant on public funds. Secondly, at the risk of being unpopular, I remember the outpouring of sympathy after Grenfell Tower but none the less, a number of people were convicted of fraud. Is the DWP still vigorously pursuing people who are wrongly claiming? I am sure that there are some and we should not let the present situation blind us to the fact that some people might be trying to take advantage of it.
Baroness Scott of Bybrook
I thank my noble friend. Yes, there are still 58,000 jobs on the website. It is a new website and it is easy to access. For anybody who is still looking for a job—I know that there are jobs and schemes for fruit and vegetable picking this summer for those people who might be furloughed but still want to work—the website is there. We are still encouraging people to go for jobs that can be done safely. As far as fraud is concerned, the capacity in the system at the moment is creating difficulties, particularly for lawyers in the department, because of everything else that they are doing. I will get an answer to my noble friend on what we are doing about that.
Baroness Drake (Lab)
My Lords, it took 16 years to get consensus and fully implement pensions auto-enrolment, so I certainly welcome the decision to maintain employers’ auto-enrolment duties, thus avoiding undesirable consequences and the negative impact on younger generations, and the fact that the job retention scheme allows grants to cover employers’ statutory contributions for furloughed workers. However, with 6.3 million furloughed workers, that scheme cannot suddenly cease without triggering widespread redundancies and loss of earnings. Are the Government committed to maintaining adherence to employers’ auto-enrolment duties in the rebuilding of the economy? What discussions is the DWP having with the Treasury on the manner and timing of the phasing down of the job retention scheme, the consequential increase in the number of benefit claimants, and the number of furloughed workers becoming redundant? Finally, I too thank DWP staff.
Baroness Scott of Bybrook
I thank all noble Lords who have spoken so far who have thanked the staff in the DWP, who have been amazing and are still under huge pressures. The noble Baroness asked a lot of very detailed questions that I will not try to answer at the moment, but I promise her a written response as soon as I get back through to the office tomorrow.
Baroness Thomas of Winchester (LD)
My Lords, I am concerned about online tribunals for PIP appeals that do not allow tribunal members to question claimants directly by speaking to them, as they can in face-to-face tribunals. Could this not be done by phone, as well as online?
Baroness Scott of Bybrook
I thank the noble Baroness very much. I know that this issue is dear to her heart. However, in line with government guidance, face-to-face hearings obviously had to be stopped. First-tier Tribunals —ones for social security and child support issues—have been replaced with telephone hearings and the use of other remote hearing technologies. As many of those hearings as possible have to be held remotely. All parties in the hearings are being contacted directly to confirm how they can be part of that tribunal. We are also working very closely with our colleagues in HMCTS, who continue to undertake paper-based and telephone hearings. The DWP continues to join these when directed to do so. What is important is that we are working with HMCTS to test video hearings, because that would be a great way forward.
Baroness Meacher (CB)
My Lords, I am grateful to the Minister for the Statement and for the short-term loosening of the sanctions regime.
Covid-19 is not a three-month problem. As the UK comes out of the pandemic over the next year—if it does—we will find ourselves with many broken sectors in the economy and millions of unemployed workers. One of the most serious consequences of the pandemic—there will be many—will be the re-emergence of high levels of long-term unemployment, last seen in the 1980s. In view of this grim reality, will the Minister ask her colleagues for a full-scale review of the sanctions regime upon which universal credit is based? Minor adjustments here and there will not make a significant difference: we need active labour market policies. In the 1980s, unemployed young people who were out of work for six months or more were offered work in the public or charity sectors and paid the rate for the job, probably something like the minimum wage. Importantly, they did not lose their capacity to work, their confidence or their mental health. Idleness destroys us all. Yes, it would cost money, but the benefits would outweigh the costs by a very big margin. I ask the Minister for her response to this proposal.
Baroness Scott of Bybrook
The department is keeping all welfare changes under continual review. Not only that, it is already working on forward planning for when the economy first starts to increase again. As the noble Baroness says, there may be more unemployment. We are therefore working on how we can deal with that and support people back into work, although it may not be the same work. All that work is being done in the department at the moment.
The Lord Bishop of Durham
My Lords, I thank the Minister for repeating the Statement. I add my thanks to all those in DWP for the incredible amount of work that they are doing.
I want to return to the two-child limit. I am sorry but it simply will not do to keep parroting back the same answer every time we raise this issue. Today, the Church of England and the Child Poverty Action Group published our latest information and a report on the impact of the limit. It includes evidence from the early days of the Covid crisis. Sixty thousand more families will be impacted. The policy is utterly flawed. I have been assured by Minister after Minister that if we give them the evidence, they will re-examine the limit. It is time that it be re-examined. Please agree at least to look at our report and re-explore the arguments around this issue.
Baroness Scott of Bybrook
I thought that the right reverend Prelate would speak on this. There are no plans to change the two-child limit, as he knows, but if a new report is out, I will of course make sure that the DWP responds to it.
Baroness Lister of Burtersett (Lab)
My Lords, I too thank DWP staff for their amazing work. I welcome the increase in the UC standard rate but in the face of accumulating evidence of serious hardship, even hunger, among families with children—and the stated intention to help those in greatest need—why have the Government resisted growing civil society calls for an increase in child benefit or other benefits for children? Given that it takes only two months to implement the uprating of legacy benefits from when they were agreed by Parliament, will they reconsider their refusal to increase legacy benefits on technical grounds? At the very least, will they consider a one-off bonus to compensate for not doing so?
Baroness Scott of Bybrook
I thank the noble Baroness for her question. This is an unprecedented time. The department has looked at how it can invest more money, that is quick and simple to deliver, into the benefits system. That is what we have done, particularly with our increases in universal credit. That is the best way we can ensure that the money—£1,000 a year—is going to families with children. It has been done quickly and speedily; that has to be the way to do it.
Lord Addington (LD)
Will the Minister look into reports that some of the 3 million European citizens staying over here are having problems being eligible for the support of the system? If this is true, it means that people here who have contributed are not getting the support that they deserve. Can the Minister give an undertaking that this will be looked at and that we will get a cohesive answer back? This really is not on.
Baroness Scott of Bybrook
Yes, I will be happy to take that back to the department. It has come up before, and we should be doing some work on it with the Home Office. I will certainly take this back.
Lord Ramsbotham (CB)
What is the situation regarding those released from prison? Before Covid-19, they could not go to jobcentres to apply for universal credit until they had been released. The Statement said that jobcentres have not been open since 24 March, so what are released prisoners meant to do?
Baroness Scott of Bybrook
I do not know what they do in the prisons before they are released, but when they are released, they can go online, because universal credit is an online system. They can also use the telephony service to get advice. I will get a further briefing for the noble Lord and make sure we have information on everything that is happening and changing for prisoners, before and after they are released.
Baroness Bennett of Manor Castle (GP)
There is no mention in the Statement of the bedroom tax. I ask the Minister to reflect on its impact in the age of Covid-19—the impact on the education of two under-16s having to share a room; the impact on people’s mental health in these difficult circumstances; the impact if someone in the household is ill and has to self-isolate. The bedroom tax affects everybody. It is obviously difficult to reverse this quickly, but there are two things the Government could do. First, claims have 13 weeks’ grace; that could be extended, since it is impossible to move. Secondly, will the Government consider extending that period for people coming up to the first anniversary of a death, where the bedroom tax kicks in?
Baroness Scott of Bybrook
We have no plans to change the bedroom tax, but I will take those two issues to the department. I know that it can be an issue when people are in small houses with a large number of people self-isolating.
Baroness Kennedy of Cradley (Lab)
My Lords, I thank the Minister for agreeing to look into the issue raised by my noble friend Lady Sherlock as to why an anomaly exists in the way universal credit differentiates between maternity allowance and statutory maternity pay. Thousands of pregnant women are worse off. The anomaly needs to be changed. Does the Minister agree that, following the review of this policy, any subsequent changes should benefit those who have already applied for universal credit during this crisis?
Baroness Scott of Bybrook
I thank the noble Baroness, Lady Kennedy. I know that the Secretary of State is looking into this in detail, and I will certainly bring up the question of subsequent changes having such an effect. I will have a look at this, and we will come back with a substantive answer to those questions.
Baroness Ritchie of Downpatrick (Non-Afl)
My Lords, what further steps—by which I mean the introduction of new legislation—will the Minister and her colleagues take to transform welfare policies to ensure that they are applied with fairness, equality and compassion to bring about a reduction in poverty?
Baroness Scott of Bybrook
I thank the noble Baroness, Lady Ritchie. At the moment, I do not see any new legislation coming through. Currently, we are making sure that the welfare system works for the people who most need it during these difficult times. However, we will learn from what has happened and from the changes we have made. The Secretary of State said yesterday that we will take on board the effects of some of the changes. It is possible that we will continue with those changes, but, as we move forward, we will always make sure that the welfare state is fit for purpose and that it looks after the most vulnerable in our society.
The Earl of Clancarty (CB)
My Lords, there is a particular concern in the creative industries that many will not be able to return to work for a long time yet, as theatre, music and other venues will be among the last working environments out of the lockdown on account of the clearly huge difficulties around social distancing. Many of these workers are self-employed. Are there plans to extend the period covering claims for the SEISS, and indeed for the job retention scheme? Otherwise, come the summer, there will again be a significant increase in claims for universal credit.
Baroness Scott of Bybrook
I thank the noble Earl. I know how much concern he has for this sector. These arrangements will be kept under review the whole time. Obviously, if parts of that sector cannot come back into full production, one assumes that the Government will look favourably on them. However, we have to go step by step. As I said, we are dealing with a new phenomenon and will have to keep all these matters under continual review.
Lord Purvis of Tweed (LD)
The Scottish Government’s options paper, which they published today, shows very clearly that, going forward, there will be a different approach to social care, employability, and relaxing some of the social distancing measures and aspects of the lockdown. Other than the HSE reference in the Statement repeated by the Minister, which parts of the Statement cover the United Kingdom as a whole and which parts cover only England? There is now a UK-wide welfare system and a ministerial working group has been established to discuss the interaction between Scotland and England on welfare. However, it last met six months ago. Why has it not met more recently to discuss the interaction between the two? Given that the Minister has not been able to answer many questions on the Statement today, would it not be appropriate for the Government to bring this issue back to the House in government time for it to be debated fully, with substantive answers being given to all the points that have been raised?
Baroness Scott of Bybrook
I thank the noble Lord. Many of the points raised today have been raised before in a number of recent debates, but I am sure that there will be other debates on the welfare system as we move forward through this difficult period. As for the changes that will happen in England—they possibly differ from what is happening in Scotland at this time—we will know more this Sunday, I believe, when the Prime Minister will talk about the way forward.
Lord Berkeley (Lab)
My Lords, I am grateful to the Minister for her Statement. In particular I congratulate the Health and Safety Executive staff, who have produced a very wide range of important activities, all designed to keep the workforce safe. However, I suggest that the guidelines it produced on social distances are pretty feeble, because for employers who do not comply—that is practically every employer in the land—the remedy in the guidelines is that,
“we will consider taking a range of actions”,
including
“the provision of … advice … through to … enforcement”
actions. Will the employers notice any of this? Perhaps the Minister could write to say how many enforcement actions were taken against employers in the last year. Surely the answer is to have binding and enforced standards for this purpose.
Baroness Scott of Bybrook
I thank the noble Lord. I will get him the numbers of enforcement actions, which I do not have in my briefing pack, but if there have been any I will certainly let him know. However, much of what we are doing is in guidance and we are a country that works by consensus. It would be more difficult, and I think we would have to have more legislation, if we were to place a much stronger effect on any employer who does not comply with the guidance.
My Lords, I am going to go and turn my light on, but the noble Baroness, Lady Bull, should go on.
Baroness Bull (CB)
My Lords, perhaps we might have some light shed on whether any consideration has been given to a job retention scheme that operates on the basis of a part-time furlough. This would maximise the work that people can carry out during this period and support longer-term viability. It will be particularly important in the recovery period for those businesses which have to wait for other businesses to gear up. In the creative industries, for instance, post-production or special effects companies cannot fully get back to work until filming has started and content has been made. Might part-time furloughing be one way to address this?
Baroness Scott of Bybrook
Yes, I thank the noble Baroness. That is a really good idea and I know that it has been brought up in other places, because some jobs will not be as full-time as they were, yet people can still get out to do useful employment. I will take that idea back to the department and come back to her when it has considered it.
The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)
My Lords, we have reached the end of the speakers’ list for the Statement well within the allocated 30 minutes. I thank all noble Lords for their contributions. The day’s Virtual Proceedings are complete and are adjourned.